Global cold storage market is projected to witness a CAGR of 6.21% during the forecast period 2024–2031, growing from USD 155.46 billion in 2023 to USD 251.73 billion in 2031. Rising demand for iced and chilled food products, increasing awareness about food safety and preservation, and the growing demand for temperature-controlled logistics are key factors driving the market’s growth. GCCA publishes a yearly list that ranks the total capacity of temperature-controlled space operated by GCCA Warehouse Members. Americold Logistics LLC. and Lineage, Inc. are the world’s largest refrigerated warehousing and logistics providers, according to the latest ranking from the Global Cold Chain Alliance (GCCA). Packaging of perishable goods is a significant factor in the cold storage market. Lineage, Inc. uses data to accelerate everything from receiving and retrieving raw material to passing safety checks and making it to the truck, which is a unique way of selling proposition.
Additionally, the surge in demand for frozen food is increasing the cold storage market grow. Millennials and Gen Z prefer frozen meals due to convenience and easy accessibility of choices in the market. Busy professionals relying on ready-to-eat meals and hassle-free options opt for frozen foods with a longer shelf life, driving the global cold storage market growth. Also, consumers with high purchasing power and shifts in lifestyles, coupled with rising expenses on packaged food, led to the rise in demand for packaged and frozen food. In addition, companies in the market plan to introduce new production lines across different divisions to address the demand for frozen food and expand their market presence.
For instance, in July 2023, Conagra Brands, Inc., a prominent branded food firm in North America, announced the launch of over 50 fresh items across the company’s snacks, grocery, and frozen divisions. Iconic brands from Conagra have developed new recipes to offer contemporary, flavorful, and dynamic food to meet the evolved needs of consumers.
Rise in the E-commerce Industry to Drive Market Growth
The rise in e-commerce has increased demand for cold storage solutions, especially in food and pharmaceutical applications, boosting market growth significantly. Consumers have become more concerned with food safety and quality; hence, demand has rapidly expanded due to the need for effective cold storage systems. The rising awareness concerning perishability during transportation and storage leads to an increase in demand for temperature-controlled storage to extend shelf life and maintain the effectiveness of product sensitivity, resulting in demand for cold storage. E-commerce operators also emphasize last-mile delivery, including temperature-controlled logistics, which further demands cold storage facilities to ensure quick delivery of perishable goods adhering to health and safety regulations. E-commerce has also expanded international trade, making cross-border shipping of temperature-sensitive food. Additionally, companies in the global market have announced the establishment of cold storage facilities to enhance last-mile delivery capabilities and delivery of perishable goods.
For instance, in July 2022, Target Brands, Inc. plans to build a new cold storage facility in Florida to improve its grocery delivery capabilities. This facility was part of a larger initiative to enhance its supply chain and respond to the increasing demand for online grocery orders resulting in fast delivery of perishable goods.
Automation and Warehouse Management Software to Drive Market Growth
Automotive and warehouse management software (WMS) is turning out to be very crucial in the optimization of cold storage operations. An increase in efficiency has been a huge benefit with its usage. Inventory management, being one of the key advantages of WMS, enables real-time tracking of stock levels, which is highly essential in cold storage where products are sensitive to temperature. It helps mitigate the risks of stockouts or overstocking, oversees the handling of perishable goods, and reduces waste. Most software solutions are linked with IoT devices, which sense temperatures to ensure products maintain the necessary range and follow health regulations. Automated alerts for deviations in temperatures help to act quickly and protect the quality of the product. Data analytics capabilities in the WMS provide valuable information about inventory movement, temperature shifts, and sales patterns to base purchasing and forecasting for demand. Because of the automation of a large percentage of operations, companies save significant amounts of money that go into labor costs, energy consumption, as well as waste spending, hence motivating investment in more cold storage infrastructure.
For instance, in August 2023, Kroger Co. launched an initiative to enhance its cold storage operations by implementing smart technology solutions. Their new temperature monitoring systems and automated inventory management software have improved product traceability and compliance with food safety regulations to deliver exceptional quality and freshness to its customers.
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Frozen Temperature to Dominate the Cold Storage Market
Surging demand for packaged and frozen food, including multiple fruits, vegetables, fish, meat, dairy products, and other goods in the market is a significant contributor to the frozen segment. This segment will dominate in the forecasting years owing to the high demand for perishable products, growing per capita income of the middle class, and increasing awareness of frozen food. Additionally, the hectic lifestyle of people has led to an increase in the demand for ready-to-eat and ready-to-cook food products, driving the growth of cold storage so evident. Advancements in technology ensure the preservation of the quality and nutritional value of frozen products. Key participants in the market are efficiently investing in procuring transport refrigeration and other machines to ensure that the product end-user buys from cold storage manufacturers is cost-effective. Also, companies in the market are planning to establish joint ventures for storing frozen food and expanding their market presence, coupled with addressing the demand for packaged and frozen food.
For instance, in April 2023, Nestlé S.A and private equity firm PAI SAS Partners agreed to set up a joint venture for Nestlé’s frozen pizza business in Europe.
North America to Dominate the Cold Storage Market Share
North America is dominating the cold storage market due to an increase in the organized retail sector, awareness of frozen food, and the busy lifestyle of people. Moreover, the increase in the disposable income of consumers and the adoption of new technologies have been the drivers in North America cold storage market growth. Moreover, government initiatives to modernize cold chain infrastructure and stringent food safety standards further propel market growth in emerging countries of North America. In July 2024, the United States government, through the U.S. Agency for International Development (USAID) and Nookat Almasy Cooperative, opened the largest cold storage facility in the Nookat district in Osh Oblast. It will generate 200 full-time jobs and help farmers to expand their sales and market opportunities. With a total storage capacity of 1,000 tons, the facility will enhance food security and improve the livelihoods of farmers across the district. Furthermore, the increasing population leads to a rise in the cold storage market, which is expected to grow more with a rise in urbanization, a boom in the behavior of consumers, and e-commerce. Also, companies in the North American cold storage market are planning to collaborate to expand their market presence and offer better storage solutions.
For instance, in October 2023, Lineage, Inc. announced a collaboration with JBS USA Holdings, Inc. to inaugurate its next-generation automated cold storage facility in Windsor, Colorado. This move will strengthen Lineage’s presence in North America.
Understanding the Global Cold Storage Market: Trends, Drivers, and Future Outlook
The global cold storage market is experiencing rapid growth, driven by the increasing demand for perishable goods, advancements in technology, and rising awareness about reducing food waste. As consumers worldwide continue to favor fresh and frozen products, cold storage facilities have become essential to maintaining the integrity of food, pharmaceuticals, and other temperature-sensitive goods. This blog post dives into the current state of the cold storage market, key growth drivers, and what to expect in the future.
Market Drivers and Challenges
Drivers
- Population Growth and Urbanization: Increasing populations in urban areas lead to greater demand for food and pharmaceuticals, boosting the need for cold storage.
- Government Initiatives to Reduce Food Waste: Governments worldwide are promoting cold storage to reduce food waste, which helps alleviate hunger and reduce environmental impact.
- Global Trade in Perishable Goods: The global trade of perishable foods, such as fruits, vegetables, meat, and seafood, necessitates robust cold storage systems for transit and storage.
Challenges
- High Operational Costs: The cold storage market is capital-intensive, with high energy costs and infrastructure requirements.
- Limited Access in Emerging Markets: Developing countries often lack the infrastructure needed to support cold storage, impacting food quality and supply chains.
- Skilled Workforce Shortage: Operating cold storage facilities requires a skilled workforce familiar with temperature-sensitive logistics, but finding skilled personnel can be challenging in some regions.
Future Outlook of the Cold Storage Market
Looking forward, the global cold storage market is poised for continued growth. Driven by advancements in technology and increasing demand for perishable products, it is likely to expand further across various regions. According to industry forecasts, the market could grow at a compound annual growth rate (CAGR) of around 12–15% over the next five years, with Asia-Pacific and North America leading in demand due to population growth and advancements in infrastructure.
Emerging markets in Latin America, Africa, and Southeast Asia are expected to see significant growth as investments in infrastructure improve and awareness about food preservation increases. Additionally, partnerships between governments and private enterprises are anticipated to boost cold storage capacities in these regions, facilitating smoother supply chains and minimizing food spoilage.
Conclusion
The global cold storage market is evolving rapidly to meet the needs of a changing world. With advancements in technology and a focus on sustainability, cold storage solutions are becoming more efficient, cost-effective, and accessible. As demand for fresh, perishable products and temperature-sensitive pharmaceuticals grows, cold storage facilities will remain an essential part of the global supply chain, ensuring that products are preserved, delivered fresh, and meet quality standards. For businesses, staying updated on cold storage trends and embracing innovation will be key to meeting future demands and achieving long-term success.
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