Cold Storage Market Analysis By Warehouse Type (Private & Semi-Private, Public), By Temperature Type (Chilled, Frozen), By Construction Type, By Application, And Segment Forecasts, 2018 - 2025

Industry Insights

The global cold storage market size was valued at USD 73.96 billion in 2016. The market has benefitted significantly from the stringent government regulations governing the production and supply of temperature-sensitive products. The industry is poised for unprecedented growth over the forecast period owing to growing organized retail sectors in the emerging economies.

The market demand is expected to increase over the forecast period as refrigerated warehouse continue to get automated. The warehouse automation comprises cloud technology, robots, conveyor belts, truck loading automation, and energy management.

Refrigerated storage has become an integral part of the supply chain management when it comes to transporting and storing temperature-sensitive products. The demand for refrigerated storage is anticipated to increase over the forecast period in line with the increasing trade of perishable products.

Users and suppliers of temperature-controlled packaging system are striving to reduce the environmental impact of cold chain shipping. At the same time, the rising awareness toward formal corporate social responsibility policies, strengthening government regulations, and changing customer expectations also pose major challenges to the development of a suitable packaging system.

Warehouse Type Insights

Based on the warehouse type, the industry has been segmented into two segments, namely private & semi-private and public. The public segment dominated the market in terms of revenue in 2016 and is expected to remain dominant over the forecast period. According to Global Cold Chain Alliance, the public warehouse capacity accounts for around 75% of the gross refrigerated storage capacity in the U.S.

A public warehouse is operated as an independent business that offers various services, such as handling, storage, and transportation for a fixed or variable fee. Public warehouses are also known as duty paid warehouses that can be owned by an individual or some agency. They are generally located near main roads or railway lines to ensure quick transportation services.

Private warehouses can also be called as proprietary warehouses. They are constructed and owned by the same enterprise that owns the merchandise stored and handled at the facility. They can be operated as a separate division within an enterprise. They offer significant benefits, such as greater control over cost, flexibility, and ability to make decisions regarding the overall activities and priorities of the facility. However, given the massive costs associated with the construction and maintenance of warehouses, only big companies can afford owning and maintaining their own warehouses. This explains the smaller number of private warehouses.

Private warehousing can be done either on off-site basis or on-site basis. An on-site warehouse can be located either at a centralized location or at different manufacturing facilities. On the other hand, an off-site warehouse is located close to the marketing areas and is used to store on-site inventory.

Construction Type Insights

The way warehouses are constructed has been changing over the past years. Single-envelope technology construction, a recent development in composite panel construction, is expected to replace the existing methods of constructing warehouses. This new technology can help reduce building material costs, operating costs, maintenance costs, and build time while also ensuring enough flexibility for changing the use in future.

A warehouse built using the single-envelope technology boasts a smaller footprint and lesser height without compromising the internal volume. The technology also offers flexibility in placing the HVAC equipment. The technology is gaining traction in the UK refrigerated warehouse market. ISD Solutions, a based refrigerated storage design and construction company based in the UK, has adopted the single-envelope technology to improve its frozen food warehouses in the UK. The company has already reaped benefits in the form of a 20% reduction in construction costs and construction time while building a 36,000-sqm warehouse space.

Based on the construction type, the industry has been segmented into three segments, namely bulk storage, production stores, and ports. The production stores segment dominated the market in terms of revenue in 2016 and is expected to remain dominant over the forecast period. Product manufacturers are increasingly getting concerned about protecting their temperature-sensitive food products throughout the production process, right from procurement of raw materials to producing semi-finished and finished products, in cold stores.

The bulk storage segment is anticipated to grow at a CAGR of 11.4% over the forecast period. The bulk storage construction type warehouse is suitable for storing fruits and vegetables in bulk and can be used to extend the availability of the other bulk materials such as flour, cooking ingredients, and canned goods protecting them from spoilage and keeping them away from direct sunlight.

The ports segment is likely to witness considerable growth over the forecast period. Constructing refrigerated warehouses near ports can help simplify the customs procedures associated with the import and export of temperature sensitive products. Government initiatives to develop infrastructure for intermodal transportation in emerging economies, such as India and China, are likely to drive the port segment.

Temperature Type Insights

Based on the temperature type, the industry has been segmented into two types, namely chilled and frozen. The frozen segment dominated the market in terms of revenue in 2016 and was valued at USD 60.14 billion. Warehouses falling under the chilled segment maintain their storage temperature in the ranges of 32-23 °F. They are used to store fresh fruits & vegetables, eggs, dry fruits, milk, dehydrated foods among others. Warehouses falling under frozen segment maintain their storage temperature in the ranges from -10 to -20°F. They are used to store frozen vegetables, fruit, fish, meat, seafood, and other products.

Rising awareness about the convenience and hygiene is causing consumer preferences to shift toward ready-to-cook meals. Besides, consumers are favoring frozen food owing to the ease of use in terms of packing technique and support for microwave cooking. These trends are turning out to be key factors driving the frozen segment.

The rising consumption of frozen food in emerging markets such as India and China, is particularly driving the frozen food segment. The proliferation of organized retail chains, including hypermarket, supermarket, is also triggering the demand in the emerging economies. However, lack of refrigeration facilities in retail stores, presence of several unorganized industry incumbents, and inadequate distribution facilities to serve the rural areas pose major challenges to the frozen food market in developing economies.

Application Insights

Based on the application, the industry has been segmented into five segments, namely processed food; dairy; fruits & vegetables; fish, meat, & seafood; and pharmaceuticals. Continued advancements in the packaging of seafood are expected to influence the meat, fish, and seafood segment. At the same time, increasing fish production is expected to augment the market demand over the projected period

The processed food segment is expected to witness the highest growth rate over the forecast period owing to the continued improvements in food packaging materials that have helped expand the processed food trade over the past years.

The pharmaceutical segment is projected to witness significant growth over the forecast period. The biotechnology and pharmaceutical supply chains are particularly prone to the risks associated with product adulteration during transport as well as non-compliance with federal regulations, standards, and guidelines.

Refrigerated warehouses remain vital for safeguarding food items, such as milk and dairy products, against spoilage. Hence, principles governing the deterioration of food substances due to bacterial growth need to be adhered to while storing dairy products in refrigerated warehouses. Thus, refrigerated warehouses are designed to offer ideal conditions in terms of humidity, temperature, and purity of air necessary to store a particular type of dairy product.

Regional Insights

The North American region held the largest market share in 2016 and offers more significant growth opportunities for the companies that have planned long term investments. Proliferation of connected devices coupled with the prevailing large consumer base is further expected to fuel the market demand over the projected period.

In the North American region, Mexico is expected to witness exponential growth over the forecast period owing to the rising investments on development of the logistics infrastructure and the strengthening network of warehouses in the region. These would also serve as the key factors stimulating the demand for the cold chain. Furthermore, economic growth and changes in government regulations in Mexico aimed at streamlining the customs program is also expected to accelerate the market demand over the forecast period.

Meanwhile, countries such as China and Mexico are transitioning to a consumer-driven economy. Thus, they are expected to witness a considerable growth rate during the years to come. as they are undergoing to consumer-led economy transition. Advances in warehouse management and refrigerated transportation coupled with government subsidies to develop the cold chain industry are allowing service providers to tap these emerging markets leveraging innovative solutions that can overcome complexities associated with transportation.

Competitive Insights

Some of the major incumbents of the market include Cloverleaf Cold Storage (U.S.), Agro Merchants Group (U.S.), Burris Logistics (U.S.), Americold Logistics LLC (U.S.), and Wabash National Corporation (U.S.).

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels, and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global cold storage market based on warehouse type, temperature type, construction type, and application:

• Warehouse Type Outlook (Revenue, USD Billion; 2014 - 2025)

  • Private & semi-private

  • Public

• Construction Type Outlook (Revenue, USD Billion; 2014 - 2025)

  • Bulk storage

  • Production stores

  • Ports

• Temperature Type Outlook (Revenue, USD Billion; 2014 - 2025)

  • Chilled

  • Frozen

• Application Outlook (Revenue, USD Billion; 2014 - 2025)

  • Fruits & vegetables

  • Dairy

  • Fish, meat & seafood

  • Processed food

  • Pharmaceuticals

• Regional Outlook (Revenue, USD Billion; 2014 - 2025)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

    • Netherlands

  • Asia Pacific

    • China

    • India

    • Japan

    • Singapore

  • South America

    • Brazil

  • The Middle East and Africa (MEA)