The cold storage industry has seen steady growth over time, and rapid increase in recent years. In this article we look at the causes and new demand it's generating.
From steaks to the full grocery cart
Over the last decade we’ve seen a lot of growth in the online sale of perishable goods like meats or frozen prepared food, driven by some major brand names including several key online-only players. This has gradually driven a change in mindset, allowing for broader adoption and expectation from consumers that food could be delivered directly to them, in just a few days. And naturally the steady population growth has increased demand for all sorts of storage and logistics, food delivery is no exception.
As the major bricks & mortar grocery chains caught onto this trend and offered online grocery shopping and home delivery, this has further increased the credibility and adoption of home delivery for an increasing range of perishable goods. It's become the norm, customers simply expect their store to offer delivery.
Pre-pandemic, less than 4% US grocery shopping was online, while 20% and 40% of footwear and consumer electronics respective spending was online – there's enormous scope for increase in grocery shopping online, and we’re seeing it start to happen. 49% consumers have bought groceries online – expected to rise to 70% by 2022.
Convenience for the consumers, challenges for the supplier
In addition to the online ordering and home delivery of general groceries, recent years saw the introduction of a new trend in home delivery - ready made recipe subscriptions. From Door Dash to Uber Eats, Hello Fresh to Green Chef - these provide easy ways to get exactly the takeout meal you desire, or convenient options for healthy home-cooked meals.
Combined, these trends simply represent a headache for many small or medium sized outlets. Their customers expect to be able to browse a full-featured shopping website, choose exactly what they want and have it delivered quickly and cheaply to their door. For perishable goods, of course it must be in perfectly healthy condition, with documented tracking from source to customer.
And now, Covid...
Obviously 2020 has posed enormous challenges for individuals around the world, and for businesses of all sorts. People are not getting out to stores as regularly and easily as in years gone by. This has further accelerated the existing trend for online perishables ordering and delivery.
So how can we meet these challenges?
The perishable goods industry needs massive additional capacity, as well as technological innovation, to meet all these new demands. Increases in online grocery shopping alone are forecast to drive demand for up to 100M sq ft of new cold storage over the next 5 years.
From a logistics point of view, this means many businesses now need a lot of off site storage at various temperatures, inventory management, order receipt and completion, then cold trucking delivery.
For small or local stores, it may not be practical to invest in full cold storage and delivery infrastructure. A partner like Frozen Logistics allows them to get into this space in a flexible way. Our clients can increase or decrease their storage volume or change storage type based on season or demand.
Whatever your cold storage, order fulfillment or logistics management needs in Texas or beyond, we're happy to help you meet the increasing needs of your customers. Please contact us to find out more, on 1-512-515-3753 or info@frozenlogistics.com
