The future of cold storage has been reshaped the past two years by the COVID-19 pandemic and changing behaviors of consumers around the globe.
“One of the interesting trends brought about by the pandemic is the skyrocketing demand for cold storage warehouses,” writes Joanna R. Turpin in ACHR News.
Experts say that the demand for cold storage is heating up after years of underinvestment which has led some existing facilities to reach their capacity.
Brian Kelly, industrial refrigeration sales director for Danfoss Climate Solutions, told ACHR News: “We’ve seen the largest growth at facilities that deal in food distribution and direct-to-consumer at the national level. The demand is coming from cold storage operators at both new construction and retrofitted existing facilities.”
Urban areas in the southwest and west such as Dallas, Denver, Houston, and Phoenix are leading the way according to ACHR News.
Just last month, global real estate services giant, Cushman & Wakefield, arranged for $74 million sales and $55 million in acquisition financing of cold storage/warehouse distribution facilities in Miami.
“Lenders recognize the clear demand and lack of product in the market for cold storage space,” said Jason Hochman of Cushman & Wakefield.
Emergen Research estimated in 2021 that the global cold storage construction market could balloon to $18.59 billion by 2027 with a compound annual growth rate of 13.8 percent.
“Market revenue growth is primarily driven by increasing online grocery sales in developed and developing economies, and rising preferences for online shopping owing [to] the pandemic and expanding eCommerce channels,” said the Emergen Research market synopsis.
The global cold storage construction industry has been tasked with building larger and more industrial-type cold storage facilities to meet the accelerating online grocery sales demand.
“Shift to cold storage operations by groceries is driving the need for increasing deployment of larger cold storage operations in order to facilitate better delivery and supply to end-users,” wrote Emergen Research. “Rising demand for processed and fresh food products through online channels is projected to drive market growth.”
John Collins, industrial sales manager-east at Zero Zone Inc., agreed with Emergen Research’s market analysis, telling ACHR News that consumers are expecting fresh or perishable food that is ready to serve/cook all year-round, while also demanding a greater variety of foods.
“To provide these products, producers and retailers need a more extensive and robust cold chain to support the consumer demand. This shift in expectations and the demand for ever more options in the choices we have as consumers is driving changes and growth in the entire cold chain,” Collins told ACHR news.
Emergen Research foresees continued research into advancement to enhance cold storage facility efficiency, especially when it comes to reducing energy consumption.
Among the factors driving global cold storage construction in 2022 should include, according to Emergen Research:
In this period of rapid growth, Emergen Research sees two factors that could apply the construction brakes:
Kelly told ACHR News that the “impending phasedown of HFCs will likely have an impact on how cold storage facilities are designed, built, and operated in the near future — particularly for smaller cold storage facilities that are less than 50,000 square feet, as these were primarily built with split systems using HFC refrigerants.”
When it comes to applications for the global cold storage construction market, it is all about food with perishable foods leading the way, closely followed by processed foods.
Emergen Research says that the perishable food segment, which includes fruits and vegetables, meat and seafood, and dairy products, accounted for 36 percent of the global cold storage construction market in 2019 at nearly $3 billion. By 2027 that figure will more than double to nearly $7 billion.
Other segments in order of current market share:
“In terms of revenue, the refrigerated containers segment dominated other segments in the market, and was valued at USD $2.98 billion in 2019,” writes Emergen Research. “Refrigerated containers are increasingly being adopted by grocers as they are more cost-effective than other types, and better suited for cold storage warehouses and for storage of temperature-sensitive products.”
Other cold storage warehouse types include blast freezers and chillers, cold rooms, and pharmaceutical cold storage warehouses.
Green Span Profiles manufactures innovative insulated metal wall and ceiling panels ideally suited for the low temperature/cold storage market.
Contact Green Span Profiles today to find out how our rigorously tested insulated metal panels can protect your valuable assets.