New York, USA: The US cold storage market reached an all time high of 9.8 million square feet of new space delivered by the end of 2022 according to report by Newmark.
Its March Industrial Insight Report shows the the number of cold storage establishments grew by 8.6% from 2020-2021 and an additional 7.5% from 2021 to first half of 2022, eclipsing the annual average of 2.2% observed from 2013 to 2020.
The primary drivers of this growth are E-commerce, industry consolidation and aging inventory, Newmark said. Major players including Lineage Logistics (its Wentworth site is pictured above) and Americold have increased their share of the market through mergers, acquisitions and new construction, sparking competition as new and smaller users unable to attain space in the top cold storage firms’ facilities are presenting opportunities for new cold storage operator formation and construction of the next generation of cold storage space.
Aging inventory is also driving the need for modern functional space. The average age of cold storage facilities is 37 years, presenting challenges due to systems that generate higher operating costs and increased risk for product spoilage, according to the report.
Seven of the ten strongest cold storage markets are in Sunbelt states, six of which have experienced an average of 26.4% increase in inventory and 4.8% population growth since 2017.
Transportation costs, which surged during the pandemic, account for roughly half of overall supply chain costs, therefore, causing cold storage users who need more specialised distribution to maintain the cold chain to follow their end consumers.
The overarching national resolve to strengthen and solidify the food supply chain after the pandemic is inducing investment to instil resilience in the industry, which, according to Newmark, will spur growth and innovation in the cold storage sector for years to come.
Pictured above is Lineage Logistics‘ newest site in Port Wentworth, Georgia, near the Port of Savannah.
