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Home » Covid-19 to accelerate demand for cold storage
Forward Thinking

Covid-19 to accelerate demand for cold storage

April 15, 2020
Supply Chain Quarterly Staff
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Steady growth in online grocery shopping was already driving demand for cold storage nationwide, but the Covid-19 pandemic will accelerate that trend and contribute to even greater demand over the next five years, according to a report from commercial real estate giant CBRE.

CBRE estimates that an additional 75 million to 100 million square feet of industrial freezer/cooler space will be needed to meet demand generated by online grocery sales by 2025. Researchers add that the trend will have five long-term effects on the market: 

  1. E-commerce grocery will become more widely adopted as consumer comfort grows with the practice. This will trigger the heightened demand for cold storage capacity.
  2. Public refrigerated warehouse companies will likely consolidate to gain more control of the cold storage footprint.
  3. Since e-commerce is typically fulfilled by local grocery stores, retail footprints will include more storage and fulfillment space, including a greater need for infill temperature-controlled facilities in proximity to consumers.
  4. Restaurants may see a significant shift in dining formats with less dine-in options and more delivery or take-out that would require cold storage capacity. Foodservice companies that supply restaurants may look to second-generation cold storage space as a cost advantage in a limited dining environment.
  5. Automation will increase, prompting higher-density, greater-height, and smaller-footprint build outs that will be required for around-the-clock operations.

"Until recently, consumers were not ordering a lot of perishables online, but that will likely change in a post-Covid-19 environment," Matthew Walaszek, associate director of industrial and logistics research for CBRE, said in a statement announcing the new research. "Now, we are seeing consumers trend toward buying foods online such as frozen meats and poultry. To meet this new demand, we will need more temperature-controlled space."  

Logistics Strategy Covid-19 Coverage
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