Frozen foods · Food processing and FMCG
Frozen stock you can count, and the cost of keeping it cold
Frozen food is made in a few weeks and sold over a year, with much of it held in cold stores you do not own. We reconcile every cold-store holding to the books, cost the storage, power and handling each product carries, and plan the funding a seasonal harvest demands.
In one paragraph
Frozen food processors hold stock for long periods, rely on third-party cold storage and cold-chain transport, and lose product when temperature control fails. Our clients make frozen vegetables, fruit, snacks, ready-to-cook products and seafood. They usually turn over ₹10–500 crore and sell to retail, food service and export customers. Owners and finance heads are the usual contacts.
Managing director or promoter, often with the operations head
The economics
How the money moves in this trade
Many frozen products are packed during a short harvest or catch window and sold over the following months, so inventory and its funding peak just after the season. Every month in storage adds rent, power and handling cost, and the product's value depends on staying frozen. A product that is cheap to make can become expensive to sell if it waits nine months in a cold store.
Stock is often spread across own cold rooms, third-party cold stores and refrigerated trucks, each with its own records. Temperature excursions, packaging damage and quality rejections create losses that are found only at dispatch or after a customer complaint. Food service and export customers set specifications and claim against them.
The problem
Where the numbers usually break down
Third-party cold-store stock is not reconciled
Holdings at external cold stores are taken from the store's statement, without periodic physical checks or reconciliation by lot.
Storage cost is not charged to products
Cold-store rent, power and handling are booked as overhead, so slow-moving products look as cheap to hold as fast ones.
Stock is valued without regard to age
Frozen stock near the end of its shelf life is carried at full cost until it is written off.
Temperature and quality losses are not recorded as events
Product lost to temperature excursions or rejected by customers is adjusted in stock without recording the cause or claiming insurance or carrier recovery.
Seasonal funding is arranged late
Peak-season procurement is funded from whatever credit is available, rather than from a plan matched to the stock-holding period.
What we do
The work, and the result each part produces
Cold-store reconciliation by lot
Stock at own and third-party cold stores reconciled to the books by product and lot, with periodic physical checks.
Stock in cold storage agrees with the books.
Holding cost by product
Rent, power, handling and finance cost of storage charged to each product for the months it was held.
Margins reflect how long each product waits to be sold.
Shelf-life ageing and provisioning
Stock aged by production date against shelf life, with a stated provisioning basis.
Ageing losses are recognised as they build.
Loss and claims register
Temperature, damage and quality losses recorded by event and cause, with insurance and carrier claims tracked.
Losses are traced and recoverable amounts are claimed.
Seasonal procurement and funding plan
Season procurement, processing and sales projected monthly, with stock, funding need and interest cost.
Harvest-season funding is planned against the holding period.
Power cost analysis
Power consumption for freezing and storage analysed by plant and cold room, compared with throughput.
Energy cost per tonne is known and monitored.
Where we start
The first steps of an engagement
Cold-store statements and lot records
We ask for statements from each cold store, your own lot-wise stock records, cold-store rent and power bills, and the record of losses and customer rejections.
Lot-wise cold-store reconciliation
Stock in each cold store is reconciled to the books by product and lot, with a physical check at the largest holdings.
Storage cost and loss events
Rent, power and handling start being charged to products for the months they are held. Each temperature, damage or quality loss is recorded as an event with its cause.
First stock and holding-cost report
Cold-store stock reconciled by lot and location, stock aged against shelf life, and holding cost per tonne per month by product.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Cold-store stock reconciled by lot and location
- Holding cost per tonne per month, by product
- Stock aged against shelf life
- Losses by cause and claims recovered
- Peak stock and funding against plan
- Power cost per tonne frozen and stored
Who it suits
Written for, and not the right fit for
- You need export health certificates or food safety approvals — those are obtained by you from the relevant authority.
- You run a cold store as a service business rather than processing your own product.
- Frozen vegetable, snack, ready-to-cook and seafood processors.
- Firms holding significant stock in third-party cold stores.
- Processors whose procurement is concentrated in a harvest or fishing season.
Cities where this trade concentrates
Services
Services this work draws on
Internal controls and risk
Controls sized to your business, documented and actually tested.
Explore service ↗Costing and profitability
What each product, line and customer really contributes.
Explore service ↗MIS and financial planning
Reporting built around the questions you actually need answered.
Explore service ↗Banking, funding and due diligence
Information a lender or investor can verify without a reconstruction.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
The cold store sends us a statement every month. Is that not enough?
It tells you what the cold store's records say. A periodic physical check by lot confirms the stock is there, in the condition you expect. Differences found early are far easier to resolve.
Why charge storage cost to each product?
Because a product held for nine months costs more than one sold in two. Until storage is charged by product, pricing and promotion decisions can't see that difference.
Do you deal with export health certificates?
No. Those are obtained by you from the relevant authority. We maintain the lot and stock records that support them.
FSSAI licences, export health certificates and other food safety approvals are the client's own responsibility. 5th Quadrant supports the records and reconciliations behind them; statutory and tax-audit reports are signed by an independently engaged CA. Full detail is on our Professional Scope page.
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