The Rise in Demand for Cold Storage and Its Impact on the Food Retail Industry

By Published On: December 21, 2022

For many years, cold storage has been the pillar of many industries, such as food retail and pharmaceutical, to maintain the integrity of temperature-sensitive products. It has been a key tool to keep the cold supply chain intact and help cool products in large volumes efficiently and effectively.

Today, cold storage facilities are indispensable in the food retail industry due to the growing demand for perishable food products, the need to meet the complexities of the supply chain, and changes in consumer behavior and demographics. According to Grand View Research (a U.S.-based market research and consulting firm), the demand for cold storage has significantly surged, with the U.S. cold storage market size projected to reach $33.08 billion in 2022.

What Drives Cold Storage Demand?

The call for more cold storage warehouse space grew markedly during the height of the global health crisis. The need for more capacity was primarily driven by pharmaceutical companies in need of refrigerated space to store healthcare products, such as vaccines. Also, grocery stores needed refrigerated facilities and back-room space to keep their inventory safe and immune from any potential food waste, while maintaining sufficient levels of product to meet the needs of panic-buying consumers.

Now with its predominant usage in the food retail industry, the need for more cold storage warehouse capacity is driven by traditional growth in the consumer population, especially with the boom of e-commerce adoption among consumers. With the increased use of online grocery platforms, there has been a corresponding increase in demand for perishable food items and fast delivery services, making cold storage a necessity for today’s food retail market.

At the same time, since many existing cold storage warehouses are outdated regarding their operational equipment and processes, the demand for newer cold storage developments with cutting-edge technologies is also on the rise.

What Does This Mean for Food Retailers?

With the upward trajectory of cold storage demand, investing in cold storage facilities stands to reap greater benefits for food retailers in the long run. It will allow retailers to take control of their supply chain, manage inventory more efficiently, and eventually result in the potential for increased market share.

However, investing in cold storage doesn’t come without challenges. Expensive construction and energy costs, complex operational requirements, and the need for state-of-the-art automation continue to be the hurdles facing retailers upon investing in cold storage facilities. That is why it is important to partner with a reliable solutions provider that offers custom services for cold storage projects and provides refrigeration equipment that is both sustainable and energy efficient.

According to the USDA, the U.S. currently has 3.7 billion cubic feet of cold storage capacity. Given the current state of our supply chain, we would still need more refrigerated space to meet growing demands. With the way things are going, the rise in demand for cold storage opens opportunities and benefits, not just for food retailers and consumers, but also for a lot of other key players in the industry.