Emerson Climate Technologies - China Cold Chain - Business

91% of Chinese consumers trust large supermarkets to refrigerate food properly; 47% of Chinese consumers are not willing to pay more to ensurebetter handling and storage

Shanghai, November 6, 2014 – Emerson Climate Technologies, a business of Emerson (NYSE: EMR), released today a study focused on Chinese consumers’ attitudes and perceptions of the food retail industry. The study showsChina’s supermarkets and convenience stores face a chilling dilemma: Chinese consumers want retailers to assure refrigerated food quality without any price increases.

Emerson’s study, “Enhance Food Safety with Less Cost” found that while 91% trusted large supermarkets to handle refrigeration well, 47% of consumers said they wouldn’t pay more to assure better food handling and refrigeration. To show the food retail industry how it cantackle this challenge, the Emerson study highlightshowDIA, one of the world’s leading discount food retailers,is using intelligent facility management technology to help its storesin China deliver food safety while reducing operating costs.

According to the Emerson study, more consumers are relying on large supermarkets for chilled foods (89%) and frozen foods (92%). Approximately 62% of consumers say they have increased their purchases of food products from supermarkets and convenience stores in the past 12 months.

“China’s food retailers are in a difficult position,” said Ram Krishnan, President of Emerson Climate Technologies, Asia, whospoke at the Emerson Climate Connect industry conference in Shanghai this week.“They are facing more pressure to ensure the quality of chilled and frozen food from source to store, yet as the refrigeration equipment ages and needs to be replaced there is little opportunity, in what is already a tight margin business, to recoup these costs from consumers. The potential impact of food quality concerns could be enormous.”

Specifically, the surveyfound that:

  • Milk, yogurt, fast-frozen food and ice cream are the most popular items consumers buy from supermarkets and convenience stores. Most people purchase milk (90%), yogurt (87%), fast-frozen food (85%) and ice cream (75%) from supermarkets and convenience stores.
  • Of those consumers who are buying morefoods at supermarkets in the past 12 months, they are doing so because the quality and freshness is superior in supermarkets (64%), the food source is more credible (60%) and supermarkets provide quality refrigeration equipment that ensures good hygiene (54%).
  • However, higher price (31%) is the most cited reason when consumers decide to reduce their purchases from supermarkets.

Maintaining a high level of trust and keeping prices competitive are essential for supermarkets to attract customers.

Improving cold chain quality while keeping costs down

At the Emerson Climate Connect industry conference, Emerson presented how itstechnology solutions can help retailers create a win/win situation by both recognizing the responsibility consumers have passed to them while keeping costs down.Emerson’sintegrated intelligent facility management systemfor supermarkets and convenience stores can help ensure food quality and, when fully implemented, reduce electricity use.

DIA deployed such a system supplied by Emerson across 22 stores in Shanghai. This new system enables DIA to monitor and optimize its energy consumption while ensuring its refrigeration systems are at the correct temperatures tohelp maintainfood quality. DIA’s facility personnel can respond to operationalissuesin real timeto help ensurefood’s freshness and safety while reducing food spoilage and maintenance costs. The Emerson system tracks and analyzes store equipment data andDIA’s personnel can program the equipment’s operations to minimize electricity costs,which helps reduce carbon emissions and keep its operations costs low.

The new system has delivered improved energy efficiency, and saved DIA money. In fact, after implementing the solution, on average, each DIA store saw energy savings of 24% and cost savings of RMB 22,000 a year, with an investment payback period under two years.

“The case study shows that food safety and cost reduction can go hand-in-hand,” Krishnansaid at the conference, “I’m confident that if supermarkets and convenience stores in China commit to food safety and invest in the latest refrigeration and monitoring technology, in the way DIA has, they will reap the benefits in the near future – approximately one to two years’ time.”

The customer survey involved face-to-face interviews with a total of 548 people in Beijing, Shanghai and Guangzhou, between 20 and 60 years of age. All participants are involved in the purchase of food for their households. The study was completed by CTR Market Research Co., Ltd (央视市场研究公司) in August 2014.

To download Emerson’s “Enhance Food Safety with Less Cost” cold chain study, please visit: www.EmersonClimateAsia.com/Coldchainwhitepaper

About Emerson Climate Technologies
Emerson Climate Technologies, a business segment of Emerson, is the world’s leading provider of heating, air conditioning and refrigeration solutions for residential, industrial and commercial applications. The group combines best-in-class technology with proven engineering, design, distribution, educational and monitoring services to provide customized, integrated climate-control solutions for customers worldwide. The innovative solutions of Emerson Climate Technologies, which include industry-leading brands such as Copeland Scroll™ and White-Rodgers™, improve human comfort, safeguard food and protect the environment. For more information, visit www.EmersonClimate.com.

About Emerson
Emerson (NYSE: EMR), based in St. Louis, Missouri (USA), is a global leader in bringing technology and engineering together to provide innovative solutions for customers in industrial, commercial, and consumer markets around the world. The company is comprised of five business segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial & Residential Solutions. Sales in fiscal 2013 were $24.7 billion. For more information, visit www.Emerson.com.