| INTEGRATIVE INSIGHTS ON EMERGING OPPORTUNITIES |
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dgearhart@firstanalysis.com
hsmith@firstanalysis.com
- Wireless cold chain solutions, which use IoT technology to monitor, track and manage the temperature of perishable goods across their supply chains, represent a large and relatively underpenetrated market opportunity. But adoption of wireless cold chain solutions has lagged relative to other IoT solutions such as fleet telematics, perhaps due to a less technology-oriented target user base and more entrenched manual monitoring and management practices.
- Frequent prominent food contamination events that have caused substantial damage to companies such as Chipotle (not to mention severe illness) are increasing the imperative to adopt wireless cold chain solutions. In addition to food, these solutions are also important for pharmaceuticals, and the enormous societal resources being invested in developing and delivering COVID-19 treatments and vaccines – which often involve temperature sensitivity – is likely to further drive wireless cold chain solution demand.
- With the advent of COVID-19 and the general increased probability of pandemics in a world of frequent global travel, we foresee the wireless cold chain solution opportunity expanding to encompass monitoring the temperature of people themselves.
- We highlight several public and privately held companies addressing these potentially high-growth opportunities.
TABLE OF CONTENTS
Includes discussion of DGII, EMR, ORBC and seven private companies
Temperature monitoring an attractive area, crisis boosts adoption
Solutions likely to incorporate human temperature monitoring capabilities
More connected world, more complex supply chains drive need
IoT universe hits a pandemic low but sees strong rebound
M&A volume slows but size larger
Private placement activity continues to trend down, but average size consistent
Temperature monitoring an attractive area, crisis boosts adoption
One of the more intriguing areas within IoT is temperature monitoring, also known as cold chain solutions. These solutions use networked sensors and software to remotely monitor, record and manage the temperature of sensitive goods such as food and pharmaceuticals. We believe the total addressable market for wireless cold chain solutions, including hardware, network connectivity and software, is more than $3 billion in North America and four to five times that size globally, encompassing 1 million to 1.5 million North American sites and mobile assets in food service, education, retail, pharmacy, healthcare facilities, warehouses and transportation. We estimate the market is about 10% penetrated based on metrics from industry leaders Digi International, Orbcomm and others; the balance still relies on manual monitoring, typically pencil and paper.