By Ben Adams, Jr.
By and large, Americans are enjoying a robust U.S. economy, and its impact seems to have been highly positive for a wide swath of industries. From where I sit, it’s clear that the economy has been good for the cold chain industry and the public refrigerated warehouses (PRWs) that operate within it. Heading into the holidays and season of thanksgiving, that’s something for which all of us at Adams Cold Storage (ACS) in Auburndale are grateful.
Business is up at ACS, with increased volumes logged for refrigerated and frozen food shipments in and out. That’s our first-hand evidence of the good economy for PRWs. There’s more positive news in the research.
According to San Francisco-based Grand View Research, the North America cold storage market size was valued at $29.08 billion (in U.S. dollars) in 2016, with an expected expansion through 2025 at a compound annual growth rate (CAGR) of 9.9 percent. The global cold storage market is expected to reach $212.54 billion (U.S.) by 2025, growing by a CAGR of 12.4 percent.
What’s driving the business growth for the cold food chain industry and PRWs? There are several factors.
- Consumer preferences are changing, According to Datex, a software and services provider for supply chain businesses, today’s consumer values convenience, wholesome food, and just-in-time delivery. More consumers are wanting locally sourced, ethnically diverse, and healthier fresh food products in a wide variety of options. They’re moving away from highly processed foods with a long shelf life to temperature-sensitive perishable food products.
- Refrigerated items, like fruits and perishables, are being consumed in greater quantities due to the “fresh” and organic mindsets.
- When the economy is strong, the demand for refrigerated — and often more costly — “fresh” items increases.
- Frozen food, especially seafood, has prompted an increase in technology. On today’s fishing vessels, wild caught fish can be processed, cleaned, packaged, and frozen on board, making many more international seafood varieties available to consumers.
- More food processors are taking advantage of freezing products (extending shelf lives) — and then tempering (thawing) them — before forwarding to grocers with a remaining perishable (30- to 60-day) shelf life.
- Tariffs are resulting in fewer exports of beef and poultry, boosting U.S. inventories of these products.
- PRWs are an economic choice. Customers pay for only the space they need rather than building their own storage facilities, which tie up capital and might not be fully utilized.
Happy Thanksgiving to one and all. May your holiday foods be cold-food-chain fresh and your feasting be fine.
BIO: Ben Adams, Jr., is an owner and president of president of Adams Cold Storage, LLC, in Auburndale. He has been directly involved in citrus production, warehousing and distribution, as well as state and community support, since 1980. His facility incorporates some 250,000 square feet of multitemperature warehousing, and is AA rated by BRC-International.