Overcoming the cold storage deficit

Cold storage construction is projected to reach $18.6 billion in value by 2027 — an increase of 13.8 percent per year, according to Emergen Research. Additionally, reports indicate that the total market for cold storage will reach $212 billion by 2025, yet capacity is only projected to grow by 1 percent per year through 2023.

Some reasons for this cold storage deficit are:

  • Capacity is strained by transportation backlogs, inflation, and labor shortages;
  • Additional capacity is needed as stores respond to market demand for fresh products;
  • Frozen food continues with strong demand, existing capacity will not become available to handle needs; and
  • 78% of existing facilities were constructed before 2000 and are outdated.

Lease, new build or renovate?

According to Ken Morris, senior vice president of Brokerage at Morris Southeast Group, the aging infrastructure means demand for newer facilities is great. Food distributors and processors are faced with the decision to lease, build a greenfield site, or renovate.

A refrigerated cold storage warehouse can be just as functional and operational for non-refrigerated use. If designed knowing that, in the future, it may be removed. There are specific design concepts that, if not known, will be applied incorrectly, causing maintenance and operational inefficiencies as well as potentially catastrophic failures. Due to the complex nature of these facilities, it is extremely important to work with an experience and qualified design-build contractor.

Be proactive

Because the cold chain crisis is expected to continue, and possibly worsen over the next few years – driven in part from spiking demand and a significant supply shortage – it is critical for a company to proactively assess its cold storage capacity needs now so that the capacity is available when needed. This is especially critical given the development timeline of 14 to 24-plus months. Stay informed about the cold storage capacity options in your market to make the right decision for your operations. 

We take for granted the importance of food from farm to fork.

  • The health of our community impacts the ability to bring food to consumers.
  • Proper safety measures in the workplace will enhance production capabilities.
  • Well designed and maintained food facilities will stand the test of time.

Quick facts: 

  • Worldwide total capacity for cold storage was 8.6 million sq. ft. in 2020.
  • U.S. has 3.7 billion cubic feet of gross refrigerated storage capacity
  • U.S. cold storage real estate footprint is approximately 225 million sq. ft.

Corporate Office: 950 Walnut Ridge Drive, Hartland, WI 53029

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

Twenty-five years of leadership and marketing experience with a background that includes generating new business, further fostering of current relationships, reviewing customer needs and market trends to achieve continued growth and reach sales goals. A former business leader and proud Veteran Air Force Commander with an extensive background in logistics and mission support.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin