NewCold – Connecting the Cold Chain
We learn how NewCold is bringing automation and innovation to the cold chain at a time when it is more essential than ever.
NewCold is a technology innovation and cold storage logistics provider established in 2012, and while it’s still relatively new, it has already proven itself to be a disruptive force in the cold storage markets of Europe, the US and Australia.
“Our model is a fairly simple one. We develop highly automated cold storage units which mean we can do it in a very efficient and environmentally-friendly manner with 50% less energy consumption than you would normally have in a traditional warehouse,” says Abhy Maharaj, Global Chief Commercial Officer & Chief Operating Officer for New Cold. “Our business has been built on the back of that and progressive multi-nationals who have partnered with us along the way. Our facilities provide a service to our customers in the most efficient and technologically advanced manner available.”
NewCold’s work isn’t just focused on technology, or even logistics, rather on offering excellent quality service and solutions to our customers. This business is not just about storage, it’s about people.
“As a business, our operations are 24/7. We have long-term partnerships and unique cold chain integrity. The cold chain is important for customers with perishable food products so we offer a high level of integrity and trust in our systems and operating model,” Maharaj says. “We’re service-focused, our performance is market-leading and we tend to bring large scale cold storage warehouses to new markets. We have the largest cold storage facility in a number of our markets and this has allowed customers to consolidate into a single warehouse and realise savings in transportation and storage costs while also lowering their environmental footprint.
That level of service is particularly essential when NewCold is entering new markets, particularly when some customers can have reticence around automation of their cold chain.
“Getting customers accustomed to high automation can be a challenge,” Maharaj admits. “We typically find a sense of ‘We’re not quite ready for this’ but as we take them through the journey, they get a lot more comfortable, it’s very much a partnership.”
In order to bring customers on board, NewCold has refined their processes so that there is as little disruption to customers’ ongoing processes as possible.
“Typically, the main barrier we face is customers are worried that they would have to make substantial changes to their business model. So a lot of our work is just education,” Maharaj says. “Most producers in our markets deliver the product to multiple supermarket retailers with a high degree of standardisation, so we work closely to ensure their journey to automation builds on existing processes and disciplines with some refinements. We have our own internal design and engineering team, we also run our own software systems, we do the interfaces and provide specialised automation expertise to our customers. It’s as much a supply chain project as it is an IT project, so we help new customers identify areas to focus on such as master-data and processes to standardise. In terms of pricing, automation benefits allow for significant savings that can be reinvested by customers in growing their brands or in product innovation. We always build bottom-up commercial models and look at what pricing best suits our customers. We don’t look at where the market is necessarily and what others are charging. It has to be sustainable for us and be a meaningful benefit for our customers – a win, win approach.”
Building these foundation relationships is essential for New Cold, as the company is keen to expand into new markets, but never does so hastily.
“Typically when we enter and establish a new market it takes time. We’re always developing a new facility from scratch so we partner closely with key players we’ve used before,” Maharaj explains. “In construction for example, if we have worked with someone in France, we’ll use them in Poland and Germany as well. When we enter a market it’s a new development and there’s risk around that. We look at a market where there is an opportunity, where there is a requirement for additional cold storage capacity or a number of small players in the market. If there’s an opportunity we find an anchor customer to base our operations around. Then we find other customers to help build on that. We don’t just build a facility and hope for the best – it’s built around long-term customer partnerships and leading-edge innovation. Once we’ve identified an anchor customer it’s about finding the right land, location and partners to build the automated facility.”
Indeed, NewCold treasures its relationships with partners around the world as among its most valuable resources.
“We have valuable partners across different areas in construction, development and automation,” Maharaj says. “We have internal capabilities as well but those relationships are important in terms of our success and we put a great amount of value in working together with them as a team. That extends to our customers as well. There are also the deep relationships we have with a select few customers, that is an important differentiator for us. We’ll never have thousands of customers. We have a small number who we work closely with to manage their cold chain.”
A Testing Time
The importance of a well-constructed cold chain is becoming clearer than ever due to the outbreak of the COVID-19 pandemic.
“Just like all organisations we have had to adapt to new ways of working but cold storage is an essential service. Our staff have had to work in that environment where there is panic buying and countries are seeing substantial increases in workload with our customers seeing dramatic changes in their dynamics,” Maharaj says. “So food service-related volumes have been temporarily impacted but that’s been offset by greater volumes through supermarkets. For example, French fries you’d probably buy as a takeout are now being bought from supermarkets as people stay at home. It’s about making sure we adapt quickly and are flexible while looking after our staff. Our warehouses are quite full because of a degree of stock build-up on production lines. Perishable product is still coming in and needs to be processed and put somewhere, so all businesses are being impacted in very different ways. We’re busy and we’re seeing changing dynamics of increased storage activity which has accelerated the need for a number of our big developments being worked on with our global customers.”
Beyond the current crisis, however, Maharaj is optimistic about the future.
“Growth has been in the order of 20 to 30% over the past five years. NewCold is already the fifth-largest company in the sector and keeps growing at a significant rate. The result of that is we’re building the business to cope with that growth level, to ensure we can support that,” he says. “We’re in a critical industry and there’s a heavy requirement for new development that you see in the pipeline. From a future development, we’re very busy looking at new opportunities across Europe, the US, and Australia but we’re also looking at markets in the Middle East, China and South-East Asia that we’ve not even touched yet.”