Reports: Tight Market For Cold Storage Warehouses as Demand Increases
- by Kayla Webb
UNITED STATES - With the online grocery sector popping off, experts are expecting demand for cold-storage warehouses to skyrocket along with it. According to a report by investment firm CBRE Group, the cold storage market should buckle up for crazy growth, with upwards of 100 million square feet of cold-storage space expected to be needed in the next five years.
“Few sectors of commercial real estate will undergo as much transformation in the coming years as the cold-storage industry due to e-commerce’s impact on this previously underpenetrated market,” said Matthew Walaszek, Associate Director of Industrial & Logistics Research, Americas. “We will see robust demand, further innovation in delivery and automation, and possibly more consolidation among major players.”
CBRE’s report stems from a projection by the Food Marketing Institute and Nielsen, which, on top of projecting exponential growth for cold storage, also outlined that online grocery could account for 13 percent of total grocery sales by 2022—a percentage that could amount to an additional $100 billion in sales, according to a press release. This growth will then balloon the cold storage market, particularly in high food-production states like California, Washington state, Florida, Texas, and Wisconsin.
“Several factors have combined to fuel expansion of the cold-storage space, from consumers’ increasing use of online ordering for groceries to grocers’ investment in new delivery strategies and warehouse technologies,” added Adam Mullen, Industrial & Logistics Leader in the Americas. “Still, the sector’s growth will be somewhat measured because these are specialized facilities requiring significant capital, power, and government approvals.”
To read the report in its entirety, click here.
How will produce companies ride the crest of the growth happening in cold storage? AndNowuKnow will continue to report on the latest and waviest.