Fresh Food & Reduced Emissions: The Global LEAP Awards Off-Grid Cold Chain Challenge Impact on Food Security & Market Growth

Summary: Competitions and innovation prizes play a critical role in developing markets for nascent technologies. The Global LEAP Awards Off-Grid Cold Chain Challenge (OGCCC) bridges the gaps in the cold chain market by facilitating product development, testing, local partnerships, and market insights. This enhances access to cooling technologies, bolstering food security, reducing environmental impact of agricultural production and improving livelihoods in India and African markets.

Context: Cold chain technologies have immense potential to transform the lives of smallholder farmers across Africa, Asia and South America, regions disproportionately burdened by significant food losses. An estimated 13% of all food production is lost worldwide due to a lack of access to cooling technology. In sub-Saharan Africa, 40%-50% of food perishes before it reaches the consumer.¹ The adoption of modern cooling solutions can improve economic outcomes for smallholders by curbing post-harvest losses and facilitating participation in high-value markets. Extensive, reliable cold chains can also improve food security, with the potential to increase the production of perishable food crops in emerging economies by up to 14%, or over 200 million tons annually.²

However, cooling technologies are unattainable for most farmers due to cost, limited availability, and lack of consistent electricity. In addition, the commercial market for distributed energy cooling solutions is nascent and few companies have been able to address the cost barrier. This creates uncertainty and risk for investors, making it harder for companies to access capital to scale, and discourages new market entrants.

CLASP, with support from UK aid, designed and launched the first Global LEAP Off-Grid Awards Cold Chain Challenge (OGCCC) in 2018 – the first-ever competition focused explicitly on identifying energy-efficient cooling solutions for smallholder farmers in energy-constrained settings.

Solution: The Global LEAP Awards Off-Grid Cold Chain Challenge (OGCCC) is structured in two phases: product nomination and field evaluation.

1. Product nomination: Participants nominate products, offering detailed information on technical specifications, business plan, deployment plans, distribution strategies, and sustainability considerations. Shortlisted participants receive grants to deploy their technologies in eligible areas.
2. Field evaluation: The second stage involves collecting, analyzing, and evaluating field performance and end-user impact data of the units through expert judging panels. The competition concludes with the recognition and awarding of cash prizes.

The first round of the competition evaluated technologies nominated for deployment in Burkina Faso, Ghana, Kenya, Nigeria, Rwanda, Senegal, Sierra Leone, Tanzania and Uganda. Based on the success of the inaugural competition, a second competition was held in 2022 expanding the geographic scope to Southeast Asia, with support from the DOEN Foundation, IKEA Foundation, Good Energies Foundation, and UK aid. This round included a detailed survey of participants to deepen insights into their business models and commercial operations, along with a Buyer’s Guide that published details on the performance of winning and finalists’ cold chain technologies.³

Impact

Encouraging product development and access

• OGCCC filled a major gap in the current smallholder cold chain market ecosystem, encouraging the development of cooling technologies for underserved markets.
• Participants leveraged the challenge to successfully launch products, test them in field conditions, and establish crucial local partnerships in new markets.

For example, India-based Ecozen Solutions leveraged its participation in the challenge to launch its product and expand operations in Kenya successfully. They utilized deployment grants for shipping and taxes, collaborated with CLASP to engage Kenya Customs on import regulations, capitalized on local presence for partnerships, refined product design for improved efficiency, and secured a $25M investment in 2023 Series C funding.⁴

Improving market understanding and intelligence

• The competition identified and promoted innovative suppliers and distributors of cold chain technologies tailored for energy-constrained communities.
• The competition enriched participants’ understanding of and insight into the broader market landscape.
• OGCCC served as a valuable market intelligence tool, providing donors and stakeholders with visibility of company operations and business complexities.

Demonstrating the market’s growth and development

• The first competition (2018) saw 10 out of 29 nominations proceed to field evaluation; the second round (2022) had 17 out of 24 nominations proceed.
• Both competitions demonstrated increased operational capacity among early movers, with 12 out of 17 approved participants deploying solutions to the market in 2022.

Lessons Learned

Key lessons learned from the implementation of the OGCCC include:

• Competition-based approaches are an effective way to collect valuable market intelligence and provide insights into effective business models. These can increase affordability and access to complex and energy-intensive technologies. To overcome the affordability barrier and increase affordability for their customers for different value chains and customer segments, companies participating in OGCCC implement a combination of business approaches (e.g., up-front cash sale, credit with installment payment options, Cooling as a Service, and lease-to-own options). OGCCC collected an expansive set of market intelligence about these various commercial strategies concluding that export markets, and other high-end retail markets, present the only financially viable supply chains for current first-mile cold storage providers, particularly those operating in Africa. Significant increases in investment and supply chain development are required to make cold storage viable as a driver of increased food security and local value chains. Increased dialogue and investment commitments by organizations such as the World Bank⁵ and initiatives such as ACES⁶ evidence progress toward achieving viability.
• Field testing initiatives are crucial in enabling companies to test and refine their product designs. Though the cold chain market remains highly nascent, there is a small yet growing range of walk-in cold room solutions with sophisticated designs that are appropriate for first-mile use cases but companies lack the resources to implement robust field performance assessments in-house. 72% of systems by 2022 OGCCC participants were adaptable across different energy supplies i.e., off-grid, weak-grid, and on-grid. However, overall technical performance was highly variable, with significant deviations from the rated specifications provided by suppliers.
• Reliable test partners and technical implementation support is critical to successfully evaluating system performance via remote performance monitoring. Monitoring equipment must be beta-tested across different product scenarios, using various parameters and standards to ensure accurate data collection. In an ideal scenario, beta-testing of the monitoring equipment should be undertaken on products that have already been deployed and in use in the field rather than on newly installed products to isolate variables.
• Adequate time for field evaluation is necessary, with an ideal minimum of one year. Deploying cold storage technologies in remote, energy-constrained areas presents significant technical and logistical challenges. A longer evaluation period makes it easier for companies to navigate the logistics of field deployment and provides some cushion for unexpected technical issues. To ensure the robustness of the data, similar initiatives should build capacity and allocate adequate resources for regular review and validation of data collected via remote monitoring devices during the evaluation period.