Growth in online grocery, which has included sales as high as $100 billion, has created a ripple effect that could benefit companies relying on cold storage. According to a report by investment firm CBRE Group, the cold storage market should expect massive growth, with upwards of 100 million square feet of cold-storage space expected to be needed in the next five years.
“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.”
CBRE’s report stems from a projection by the Food Marketing Institute and Nielsen—and can be read in its entirety here. The report outlines that online grocery could account for 13 percent of total grocery sales by 2022, 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.
“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.”
How can deli, dairy, bakery, and specialty foods companies ride this crest of cold storage growth? Deli Market News will continue to report on the latest and waviest.