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Is Cold Storage Heating Up?

Jordan LeBlanc • 10/21/2019
Cold storage, the storage of any temperature-controlled products, has increasingly become a hot topic in the real estate industry. This is due to the low supply, high demand and growing opportunities associated with these types of facilities.

Cold Storage Heating Up Article

Cold storage comprises a relatively small segment of the warehousing and storage industry but has experienced dramatic growth over the last few years. The major factors associated with this growth have been consumer habits, population development and the increased need for 3PL (third-party logistics) groups to service grocery and food retailers. Moving away from highly-processed and unhealthy foods with long shelf lives to temperature-sensitive, perishable food products, requires an adjustment in the supply chain. Consumers value convenience and fast delivery; however, with this comes added complications.

Growing companies are being pressured to design their own facilities to service the increasing demand from consumers. Versacold, one of Canada’s largest cold storage companies, recently completed construction of its 572,192-square-foot facility in Milton, Ontario. It is currently the country’s largest temperate-sensitive warehouse.

Facilities such as these often need to be retrofitted to the user’s specifications. Cold storage warehouses are measured using cubic footage because of the ability to stack pallets. Ceiling heights are therefore extremely important. The power expended in these types of facilities can be double, or triple, the amount used in a typical warehouse, which is why power consumption should also be carefully considered. Additionally, technology is continuing to play an important role in the construction of these facilities. Warehouse automation, conveyor management, robotics and truck loading will all affect the efficiency of a company’s operations.

There are many different types of cold storage, each of which serves a specific purpose. Some examples are:

  • Refrigerated containers
  • Blast freezers and chillers
  • Cold rooms
  • Pharmaceutical grade cold storage

Refrigerated warehouses, however, are not solely used for the storage of food-related products. They can be used to house many items such as medicine, candles, film, perishable nutrient products, and plants. Each product has a unique shelf life, required temperature, and duration of time it can spend between the cold storage facility and a transportation vehicle before its quality deteriorates.

The demand to deliver these products faster and more easily, along with the increasing growth in e-commerce’s online ordering, is driving the growth of the cold storage industry. The lack of available infrastructure required to sustain the cold chain is likely to pose a major challenge for companies aiming to expand their businesses into emerging markets.

For these reasons, cold-storage facilities will continue to be leased, purchased and sold at a premium rate.

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