COVID-19: Vaccine Distribution and its imperative on Food / FMCG Supply Chains

  • COVID-19: Vaccine Distribution and its imperative on Food / FMCG Supply Chains

    COVID-19: Vaccine Distribution and its imperative on Food / FMCG Supply Chains


    COVID-19 vaccine is a unique landmark in the history of vaccination campaigns in public health in terms of the immunization cohort covered and the scale of operations involved. While many countries have already started the vaccination program, India is just a few weeks away from the official announcement.  With over a dozen vaccine candidates in fray, distribution and vaccine administration is the next big step in the fight against COVID-19.

    While the final approvals on the vaccine is awaited; supply chain estimates can be modeled basis the common characteristics of the vaccines under advanced stages:

    • Mostly liquid products
    • Majority are Intra-Muscular injection
    • Majority are 2-dose courses
    • Most vaccine would be provided in a multi-dose vial
    • Most have a targeted temperature range of +2oC to +8oC

    Demand Allocation:

    • ~ 300 Million population will be vaccinated in the phase 1 (as per GoI reports)
      • Around 500-700 K healthcare professionals, 14 million frontline workers, 600 K police, municipal workers and armed forces and ~ 270 million old and comorbid people
      • Statistical modelling points at 50% concentration of the demand allocation around 5 states – Maharashtra, Uttar Pradesh, Tamil Nadu, Andhra, West Bengal
    • ~ 662 Million doses would be required to be administered in 6-12 months times
      • Given ~ 400 Million Doses are administered annually under the Universal Immunisation Programs; Phase 1 vaccination drive would entail sweating the current infrastructure at 4-6X turnaround

    Assuming the vaccine approvals are done in Jan 2021; Q1 2021 would be required for preparing the infrastructure, technology back-end, training and mobilization of resources; Q2 and Q3 of 2021 would see peak activities in terms of vaccination drive.


    Supply Chain Requirements:

    • Department of Food and Civil Supplies, Dept. of Animal Husbandry will be largely responsible for providing cold storage spaces and transport systems.
    • ~ 2.4 Mn Lt. of Vaccine Volume storage ( equivalent to 5,000 pallet positions) will be required in Phase 1 (2 doses of 3.6 ml each at a wastage factor of 10%)
    • ~1.35 Mn Lt. of Vaccine Storage space is already available in the public space and reports suggested further augmentation to ~2.05 Mn Ltr by respective state agencies in underway
      • 4 Government Medical Supply Depots, 150 State & regional Vaccine Stores and 640 District Vaccine stores
      • 225 Walk-In Coolers, 57 Walk-In Freezer, 44,000 Ice lined Refrigerators, 38,000 Deep Freezers, 79,000 Cold Boxes, 1.4 million vaccine carriers and 700 vans
    • While the current vaccine manufacturers are working full throttle on augmenting manufacturing capacities and advance production, still there would be a massive demand supply lag and hence the peak storage requirements would taper down negating the need of extensive participation by private cold chain warehouse.

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    • Transportation from the manufacturer to the State/Regional Vaccine Stores will require bigger capacity refrigerated trucks, ~ however the distribution from there to the district stores mile will largely happen through smaller vehicles/vans etc.
      • Our internal modelling suggests,the following capacity requirement for the envisaged scale
        • 682 trips for larger 12 MT vehicles
        • 2,322 trips for medium 4.5 MT vehicles
        • 11,118 trips for small 1.5 MT vehicles
    • Last mile distribution, from district stores to the vaccination points would require “milk runs” on dedicated smaller vehicles basis and would be managed at the city/area level.
    • There might be many private vaccination programs, however the scale of such requirements would be much smaller compared to the Govt. program and highly distributed and would be easily accommodated by the existing logistics partners.

    What this means for the Food/FMCG Brands operating Temperature Controlled Supply Chain Network?

    • So far, there appears no indications on any mandatory requirement for the transport companies to align the capacities on a mandatory basis; Reports suggest tenders may be floated by the respective state govt. for the vehicle requirements, and transport companies may align some capacities albeit with little expectations on the yield
      • Even in a rare scenario of Govt. mandating the transport companies to place the capacity for vaccine distribution, Food/FMCG brand will be least impacted as they will be treated as essential supplies (frozen food may be treated as non essential)
    • Being a distributed scale; we don’t foresee massive impact on the vehicle capacity availability for the Food/FMCG cold chain requirements, However Q2 and Q3 FY2021, may see a temporary surge in requirements for smaller temperature-controlled vehicles for local distributions
    • Sufficient cold warehouse capacities remain available, however it’s recommended to build inventory back-up closer to the consumption markets, so as to deal with any possible fulfillment delays arising out of non-availability of smaller vehicles for last mile distribution

    If you are interested to know more about this, please feel free to connect with us on [email protected]