The next disruption: cold storage

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The next disruption: cold storage

By Gina Acosta - 03/16/2018
CBRE calculates that demand for as much as 35 million sq. ft. of cold-storage space will shift from retail properties to industrial.

The growth of online grocery could add millions of square feet of new cold-storage space to warehouses and distribution centers within the next seven years, according to a new report from CBRE.
 
“The U.S. market for warehouses and distribution centers has been on a multiyear run, but there still are segments in the relatively early stages of their growth, like cold storage,” said David Egan, CBRE Global Head of Industrial & Logistics Research. “As e-commerce expands further into the grocery business, the resulting growth of the food supply chain and demand for new, climate-controlled warehouse space could very well be the new opportunity that investors and developers have been seeking.”
 
CBRE estimates that the U.S. market for food-commodity cold storage space spans roughly 180 million sq. ft. of industrial space – namely refrigerated warehouses – and about 300 million sq. ft. of space in grocery stores and other retail venues.
 
That ratio between industrial and retail cold-storage space will shift in the coming years as, according to FMI/Nielsen, online grocery sales will grow from 3 percent of all grocery sales in 2017 to 13 percent by 2024. Based on that projection, CBRE calculates that demand for as much as 35 million sq. ft. of cold-storage space will shift from retail properties to industrial.
 
CBRE’s analysis found that larger concentrations of food-grade, cold-storage facilities occur in states with substantial agricultural production, large populations or both. CBRE estimates California to have the most industrial cold-storage space (nearly 400 million cubic feet), followed by Washington state (271 million), Florida (260 million), Texas (231 million) and Wisconsin (228 million).

To read the report, click here.

 

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