Case Study: Introduction of Cool Innovation’s Fresh Produce Cold Chain in the Philippines

In the Philippines, agriculture contributes about 8.9% of the country’s GDP and employs 24 percent of the Filipino workforce in 2022.

In a tropical country like the Philippines, high-value crops such as fruits and vegetables are prone to conditions like early ripening due to the inherently high temperatures and relative humidity. In other words, the preservation time for these crops will be shorter.

Agricultural products are high volume, low value, and highly perishable. These produce are generally wasted during the process of food distribution in the supply chain. Major contributors to these huge losses include the inherent nature of these produce, the tropical setting of the country, the lack of post-harvest infrastructure and facilities, the methods of handling, and the multi-layered distribution system.

In the Philippines, substantial post-harvest losses of up to 50% have been recorded from the initial harvesting, grading, packaging, transportation from field to storage, and distribution to consumers according to Food Loss in the Food Value Chain: The Philippine Agriculture Scenario (Mopera, 2016).

Cool Innovation conducted a trial in the Philippines, transporting 1.5 tons of fruits and vegetables over 1,100 kilometers from Benguet to Manila, and then to Palawan, over a period of 19 days.

Typically, the produce is categorized as Grade A (hotel quality) and Grade B (discount quality). However, under normal conditions, at least 40% of the goods are rejected (food loss), and most degrade to Grade B by the time they reach the city.

Using Cool Innovation’s technology, the loss was reduced from 40% to 4.5%, and energy consumption was cut by 51%, saving approximately $2,100 based on the cost of purchasing from farmers.

Since the $2,100 represents the cost of goods saved, and most of the produce remained Grade A, the economic value for this single trip was much higher than $2,100. Furthermore, the food trader typically transports around 10 tons of produce 1-2 times per week.

This results in the following monthly economic benefits:

1. One-time shipping amount = 10 tons

2. Cost of Goods Saved per Shipping = (10 tons / 1.5 tons) * $2,100 = $13,986.00

3. Cost of Goods per Shipping Excluding Loss = $13,986.00 / (40% - 4.5%) = $39,726.03

4. Gross Profit Margin (estimated) = 20%

5. Added Value of Grade A Goods = 20%

6. Percentage of Grade A Goods = 60%

7. Added Value of Grade A = $39,726.03*20%*20%*60% = $5,720.54

8. Estimated Value per 10-ton Shipping Brought by Cool Innovation = $13,986.00 + $5,720.54 = $19,706.54

9. Monthly shipments (4 to 8 times)* = $19,706.54*4 ~ $19,706.54 *8 = $78,826.16 ~ $157,652.32

*Assuming complete sell-through

The ROI and benefit are clear but we need to emphasize that this trial was conducted in 2022 with our prototype. After years of development and iteration, we are confident to reduce the food loss and improve the freshness even further today.

The results of Cool Innovation's trial in the Philippines demonstrated significant potential to reduce post-harvest losses and enhance the economic value of agricultural produce. By drastically cutting food waste and maintaining the quality of high-value crops, it has become possible to deliver more fresh produce to urban areas. This is expected to help farmers in relatively poorer regions, especially those far from city centers, earn higher incomes than before.

Inquiries and Requests

Cool Innovation is seeking collaborative partners, academic institutions, government agencies, agricultural stakeholders, and food manufacturers to utilize, promote, and research our innovative solutions for maintaining the freshness of fruits and vegetables.

Our advanced technology not only addresses the global issue of food loss but also enables a shift from air transport to sea transport, significantly reducing costs and CO2 emissions.

With successful case studies in Japan, Thailand, and the Philippines, our technology, which guarantees reliable ROI through a subscription model, achieves 10 times* better freshness preservation compared to existing methods (*duration varies by product).

We would be delighted to work with you to reform the fresh produce supply chain and contribute to a more sustainable future.

For any questions or requests, please fill out all necessary details in the inquiry form and provide as much detail as possible about your needs. We will respond promptly and contact you regarding specific needs and solutions. Thank you.