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Home » Food & beverage companies claim growing share of warehouse space as consumers demand grocery home delivery
Forward Thinking

Food & beverage companies claim growing share of warehouse space as consumers demand grocery home delivery

January 23, 2020
Supply Chain Quarterly Staff
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E-commerce and logistics providers kept their crown as the biggest tenants overall for U.S. warehouse leasing, but red hot demand in 2019 for grocery home delivery made food & beverage companies the fastest growing sector, a new report from CBRE shows.

Grocers and distributors continued to build out their supply chains for home delivery in 2019, pushing them to claim 13 of the country's 100 largest industrial leases last year for a cumulative 13 million square feet, up from nine leases for 8.8 million square feet in 2018, CBRE said.

That increase was greater than any other sector, but the total warehouse space used for groceries is still far less than e-commerce and logistics companies (including third-party logistics providers (3PLs)), which accounted together for more leases (54) and square footage (45 million) last year within the top 100 than the next-closest category - wholesalers at 18 leases for 15.2 million square feet.

Still, the fast growth of grocery delivery took some wind out of the sails of the e-commerce and logistics giants, which accounted for 52% of the square footage in the largest 100 industrial leases last year, down from 61% in 2018

"This report, which our team completes each year, often provides us a rough outline of important trends within the industrial and distribution sector -- and the growth of grocery delivery is a clear factor this year," John Morris, executive managing director of CBRE's Americas Industrial & Logistics business, said in a release. "E-commerce and logistics companies are the needle movers, but food & beverage quickly has established itself as a major player in industrial real estate leasing. This projects continued growth for both dry and cold-storage warehousing this year."

In another change to the rankings, CBRE noted that several smaller geographic hubs in the industry jumped up the rankings, led by Memphis, Indianapolis, and Columbus. That change is rare to see, because large warehouse leases traditionally tend to cluster only in major distribution markets, most of which are near busy ports, large population centers, and robust transportation networks, the firm said.

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