While threats of recession loom around the world, the cold chain global market is not cooling off with double-digit growth projected over the next decade as more and more products require cold environments.
“The global cold chain market reached a value of nearly $274.9 billion in 2021, having grown at a compound annual growth rate (CAGR) of 14.5 percent since 2016,” said a report released Dec. 2, 2022. “The market is expected to grow from $274.9 billion in 2021 to $498.8 billion in 2026 at a rate of 12.7 percent. The market is then expected to grow at a CAGR of 12.8 percent from 2026 and reach $910.7 billion in 2031.”
Cold storage, which can slow physical and chemical changes in products, is essential for the global economy to move items to end-users while maintaining their integrity.
Cold Chain Global Market Experiencing Historic Growth
The report said the cold chain global market is experiencing historic growth for multiple reasons including:
- Strong economic growth in emerging markets
- Growth in world population
- Increase in food export
- Increasing demand from end-use industries
“Going forward, global population growth and urbanization, rapid growth in eCommerce, increasing consumption of packaged food, food security initiatives, and increased demand from end-use industries will drive the growth,” said the report. “Factors that could hinder the growth of the cold chain market in the future include increasing warehousing costs, increasing fuel costs, skill shortages, and the Russian-Ukrainian war.”
Rounding Up the Usual Cold Storage Suspects
The cold chain market is segmented by type into refrigerated warehousing and refrigerated transport.
While the refrigerated warehousing market accounts for 58 percent of the cold chain global market, the refrigerated transport market is growing fast, at a 13.1 percent projected clip between 2021 and 2026.
The degrees of cold storage are divided between frozen, which accounts for 55.9 percent of the market, and chilled, which, like refrigerated transport, is growing at 13.1 percent over the next five years.
What are the typical products being housed in cold storage warehouses and moved by refrigerated transportation? The usual cold storage suspects include:
- Food and beverages are the largest segment of the cold chain market with a 69.1 percent share
- Pharmaceuticals and healthcare are the fastest growing segment at 13 percent yearly growth projected through 2026
“Market-trend-based strategies for the cold chain market include focusing on sustainability initiatives, focusing on quality and product sensitivity, leveraging internet of things (IoT), focusing on smart warehousing, outsourcing processes to third-party logistics, and focusing on strategic investments,” said the report.
Conger Industries says that specific industries that most use cold storage warehouses and transportation include:
- Restaurants and food outlets
- Supermarkets and food service firms
- Importers and exporters
- Frozen food producers
- Agricultural producers
- Pharmaceuticals and healthcare institutions
The demand has been growing, especially during the Covid-19 pandemic which changed consumer habits.
“While the cold storage space availability is limited at a macro level, the pandemic also accelerated consumer growth spending substantially within the frozen sector. According to the American Frozen Food Initiative (AFFI), 30 percent of consumers increased their at-home freezer capacity in 2020,” reported the Progressive Grocer. “Retail grocery shoppers have increased their percentage of frozen groceries purchased per trip, as well as buying more frequently from the frozen food section.”
Cold Storage Warehouse: 7 Unexpected Products
Temperature-controlled warehouses are not just for slabs of beef and cartons of ice cream.
“When you think of a cold storage warehouse, you typically think about a facility used to store foods that require a temperature-controlled environment such as meats, dairy, and frozen items,” says CWI Logistics which provides cold storage solutions. “However, there are other products that can benefit from being placed in a cold storage warehouse for both short and long-term storage.”
Here are seven of the most unexpected items you might find in cold storage, according to CWI Logistics:
- Artwork: Older artwork especially needs to be stored in a temperature-controlled facility as fluctuating temperatures and room conditions can lead to paint flaking, fading, and other damage.
- Candles: Jack be nimble, Jack be quick, Jack might consider storing his candles in cold storage because storing or transporting candles in warm conditions can lead to melting, deformities, bleaching of conditions, and other conditions that can ruin the product.
- Cologne: You might know that perfume should be stored at room temperature, but cologne, on the other hand, can maintain its scent longer (and thus value!) if stored in a cold environment.
- Cosmetics: This is another product that can maintain its lifespan and integrity longer if stored in a cold environment. Lipstick, especially, can be ruined if stored at too high temperatures.
- Film: Thanks to the iPhone and digital cameras, there may not be a lot of old-fashioned film in circulation, but those trying to preserve family memories and other historical artifacts on film, storing in it a cold environment can help prevent it from becoming damaged.
- Plants: It’s a jungle out there but sometimes it helps to be on the cold side. Cut flowers, for example, will have a much longer lifespan when stored in a cold environment which is why you will see cold storage at your local florist.
- Seeds: Storing seeds in a cold environment will help preserve them for future planting but remember that they need to be in a moisture-free and airtight container to preserve their integrity.
Meeting Cold Storage Demand of All Types of Products
There are, of course, many other products that can benefit from cold storage environments such as books, organic textiles such as fur, wool, and hides, and specialized products like aircraft components.
From books to beef and candles to cheese, the push is on for cold storage space.
“While there are certainly short-term challenges within the cold-storage industry, consumer growth spending suggests that frozen products will play an increased role in both the supply chain and retail grocery shopping moving forward,” said the Progressive Grocer. “For now, it appears that the demand for cold storage space will only increase. If warehouse space can’t meet the demand, it’s critical for companies [plan] … The last thing any business needs is for products to get ruined or be deemed unusable at a time when demand has never been higher.”