A research report from Skyquest released this year forecasts the U.S. cold storage market will grow from $43.2 billion in 2023 to $118.8 billion by 2031.
That is a compound annual growth rate of 13.5% during the forecast period, according to the report summary. Despite the challenges of huge capital investments needed to build the facilities, regulations and high operating costs, the report said there are several trends driving its growth.
One trend is the increasing adoption of automation and technology in the industry, the report said, noting the use of robotics and artificial intelligence to optimize warehouse operations and improve efficiency.
Another trend is the growing popularity of e-commerce and the resulting demand for faster delivery times. As a result, companies in the cold storage industry are investing in last-mile delivery solutions and expanding their reach to remote areas.
Additionally, the rise of food delivery services and online grocery platforms is creating new avenues for growth in the industry, the summary said.
“The growth of e-commerce and home delivery services has significantly increased the demand for cold storage facilities,” the summary said. “The COVID-19 pandemic has also accelerated this trend, with more consumers opting for online shopping and home delivery services. For instance, online grocery sales in the U.S. increased by 54% in 2021, leading to an increase in demand for cold storage facilities. This trend is expected to continue, driving the growth of the U.S. cold storage market in the coming years.”
In 2021, the frozen segment dominated the U.S. cold storage market, accounting for more than 81%.
“The growing awareness and demand for convenience foods have resulted in an increased preference for ready-to-cook meals,” the summary said.
The chilled segment is expected to witness a significant shift in growth in the coming years. The chilled segment maintains storage temperatures above 23 degrees F and is used to store fresh fruits and vegetables, eggs, milk, dry fruits, and dehydrated foods, among others. In contrast, the frozen segment maintains temperatures in the range of -10 to -20°F and is used to store frozen vegetables, fish, meat, seafood, and other products.
While California is the top revenue state for cold storage facilities, North Carolina and South Carolina are growing fast in cold storage activity, according to the summary.
“North Carolina and South Carolina are expected to witness a CAGR of over 15.2% and 14.7%, respectively, from 2022 to 2030,” the summary said. “These regions are experiencing rapid growth due to the development of transportation facilities, technological advancements, and increased adoption of frozen foods. The high growth rate can also be attributed to the favorable business environment in these regions, such as low taxes and relaxed regulations.”
Cold storages are seeing significant technological advancements, including the adoption of automation, robotics, and internet-connected devices, the summary said.
“These technologies have led to increased efficiency, reduced labor costs, and improved product quality,” the summary said. “For instance, automated storage and retrieval systems (ASRS) have become increasingly popular in the industry, providing high-density storage and faster retrieval times.”
In addition, the summary noted a growth of multi-temperature warehousing in the U.S. cold storage market.
“Some of the key players in the U.S. cold storage market are focusing on expanding their geographic presence, enhancing their service offerings, and investing in new technologies and automation to remain competitive in the market,” the summary said. “They are also adopting strategies such as mergers and acquisitions, partnerships, and collaborations to strengthen their market position and gain a competitive advantage. Moreover, sustainability and environmental concerns have become a major focus for players in the cold storage market, with many companies implementing green initiatives, such as using renewable energy sources, reducing greenhouse gas emissions, and implementing recycling programs.”
