The global food and beverage warehousing market is projected to expand by USD508.7bn from 2024 to 2028, according to a recent report by Technavio.
The market is expected to grow at a compound annual growth rate (CAGR) of 21.22% over the forecast period, driven by increasing demand for warehouse automation and the adoption of new business strategies by industry vendors. However, rising power consumption in cold storage facilities remains a key challenge.
Growth in the sector is underpinned by a surge in partnerships and collaborations among vendors, end-users, and distributors. Companies are scaling up their warehouse capacities and investing in advanced technologies to enhance storage capabilities. For example, Americold Realty Trust has announced a $45 million expansion of its Dalgety site in New Zealand, boosting capacity by 4.6 million cubic feet and adding 27,000 pallet positions.
Similarly, Preferred Freezer Services, now part of Lineage Logistics, has invested USD60m in a new 200,000-square-foot cold storage facility in Virginia. These strategic moves allow companies to meet the rising demand for cold storage space, expand their product range, and drive revenue growth in the food and beverage warehousing sector.
Key segments within the market, such as Fish & Seafood and Dairy & Frozen Desserts, are seeing significant demand due to the need for temperature-sensitive storage solutions. While challenges such as monetary policy tightening and climate-related disruptions persist, disinflation offers some relief. Beverages, meat, fish, and seafood all require specialized refrigerated warehousing services to ensure product freshness and traceability. Additionally, retailers are placing greater emphasis on cold storage solutions to handle meal preparation kits, grains, and other temperature-sensitive goods.
The rise of e-commerce is also fueling demand for warehousing services for processed foods, with “rainbow pallets”—which allow for optimized storage of diverse product ranges—becoming increasingly popular.
Government initiatives, particularly in the Asia-Pacific region, are providing further support for the sector, including excise duty exemptions on refrigeration machinery installations. Nevertheless, energy consumption and labour requirements remain major challenges for cold storage providers. In response, the adoption of Variable Frequency Drives (VFDs), which can reduce energy consumption by up to 30%, is gaining traction.
Interstate Cold Storage, a leading player in the Americas, has already implemented VFD technology to cut power usage and enhance operational efficiency. However, only 4% of US cold storage facilities currently use this technology, highlighting the potential for broader adoption to mitigate energy concerns and drive future growth in the market.
Find out more at: https://www.technavio.com