Cold Storage is in

Hot Demand!

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.1 And 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 2023.2

Some reasons for this cold storage deficit are2:
  • Capacity has been strained by transportation backlogs, inflation, and labor shortages exacerbated by the pandemic;
  • Cold storage facilities are already near capacity, and more are needed because stores are responding to market demand by adding fresh products and services, in terms of both volume and variety;
  • Frozen food continues to demonstrate strong demand around the world, which means existing capacity will not become available to handle new cold storage needs; and
  • Many facilities are outdated; more than 78% of existing buildings were constructed before 2000 and don’t use advanced cooling technologies.
How ESI Group can help you:
  • Assist in assessing your cold storage capacity needs
  • Sequenced and expedited design, engineering, permitting and
    construction schedule
  • Creating flexibility into the design for refrigerated and non-refrigerated
    applications
  • Delivering an energy efficient and quality facility every time
Looking For A Temperature Controlled Solution? We Can Help!
“Investor and end user demand for temperature-controlled storage space is surging across the U.S.”

Bobby DeGregorio, Regional Manager, ESI Group USA

8.6

worldwide total capacity for cold storage was 8.6 million sq. ft. in 2020.

3.7

U.S. has 3.7 billion cubic feet of gross refrigerated storage capacity

225

U.S. cold storage real estate footprint is approximately 225 million sq. ft.

Lease, New Build or Renovate?

Sygma Warehouse Exterior

Be Proactive

Since 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 you.

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LEASE – The availability of existing dry and cold storage capacity is extremely limited, which makes leasing existing space a challenge. Resulting in consideration for a build-to-suit or spec cold storage development (usually pre-leased quickly) with a developer. Leasing may offer less upfront costs and minimize concern for long-term maintenance of the building.

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NEW BUILD – Designing and constructing a new facility is costly, as developers will require elevated rental rates to achieve a return on their investment.  The alternative for a food company requiring cold storage is to finance the acquisition or development themselves via a synthetic lease structure that provides accounting, tax, and economic benefits including below-market rates (cost of the synthetic lease).

INVESTING IN COLD STORAGE TECHNOLOGIES – A new site is an investment in advanced cold storage technologies. These may include computer-controlled refrigeration systems to reduce energy consumption, refrigerated docks that are longer (upwards of 75 feet) and colder, dock levelers that enable vertical storage and minimize air infiltration, and warehouse storage and retrieval automation to improve the efficiency, speed, reliability, and accuracy of moving products.

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RENOVATE – The Food Institute reports that retrofits are playing a crucial role in meeting the need for cold storage.1 Renovating an existing facility in certain situations can be a viable option with many benefits. Once a project scope has been determined, a layout can be generated to review if there are changes needed to the facility’s footprint. The sites infrastructure and operational systems will need to be evaluated to accurately estimate the cost of the project. 

The Risk of Improper Design

“There are specific design concepts that, if not known, will be applied incorrectly, causing maintenance and operational inefficiencies as well as potentially catastrophic failures,” Brad Barke President/Founder shares. For example, he says a lack of proper thermal vapor envelope will cause frost, condensation, and ice build-up. “These issues are difficult to fix and maintain while the rooms are at low operating temperatures, and they will put stress on the refrigeration system, which results in higher operating costs.”

Timothy Gibbons, VP of Design adds, “Additionally, improper building design can cause floor and roof failures that will damage the stored product and create safety hazards for working personnel. And, fire protection systems with appropriate alarms for low-temperature environments are very specific to cold storage sites and need to be designed and installed properly to ensure product remains shelf stable.”