Cold Storage Shortage Warms Up Automation Opportunities


It’s routine by now – you plan your weekly meals, fill up your virtual cart, and check out from the comfort of home. Even before the global pandemic changed our way of life, online grocery shopping was increasing. The Food Marketing Institute and Nielsen predict that online grocery ordering will account for 13% of total grocery sales by 2024, up from just 3% in 2018[1]. This rising demand for groceries and fresh pet food available online has compounded an existing problem: there is not enough cold storage warehouse space in the U.S. to meet demand. “The statistics are showing that there is going to be a shortage of 100 million square feet in the U.S. alone,” says Jim Higley, Director of Business Development at Interstates.

The cold storage shortage issue is multi-layered. More online shopping and e-commerce business is increasing demand for cooler and freezer storage, but the construction of new cold storage facilities isn’t necessarily straightforward. These types of facilities are more expensive to build than typical warehouses, and certain businesses using cold storage also require processing, packaging, and other detailed functions on top of storage and distribution. “A lot of these processes need to be automated to keep up with fulfillment, but older cold-storage facilities are lacking automation,” says Higley.

Automation Can Help

As technology speeds along, so does the potential for more automation solutions at storage and distribution facilities. “The capabilities of automated warehouses are very impressive,” says Jason Anson, Automation Manager at Interstates. “So many technological advances are making warehouse processes more efficient. Digital instrumentation like photo eyes and vision systems tying back into real-time databases and traceability of boxes are just a few examples,” says Anson. He also notes that having more cold storage facilities closer to where they are needed is essential. “Similar to how data centers are scattered across the U.S., more cold storage facilities need to be strategically placed throughout the country so product can get to the consumer faster,” he says.

Interstates started completely automating facilities twelve years ago. “We started automating dry facilities when qualified, trained help was hard to find, and warehousing went to automated storage and retrieval systems. From this, we grew into more freezer/cooler automation work. Over 50% of Interstates’ volume is in food and beverage, and in the last five years, we have done at least one automated cold storage facility a year,” says Higley.

Choosing the Right Vendor

Cold storage warehouse space might be more expensive to build and maintain, but the growth foreseen for the industry will make cold storage projects increasingly attractive to companies. Since most of these projects come with a hefty price tag, every choice must be considered carefully. Finding a full-service company, with experts ranging from automation to electrical engineering and back, is beneficial. “Our knowledge of databases and programming, coupled with our onsite install and commissioning services, makes us stand out,” says Anson, “the single source, electrical project ownership is something owner groups appreciate. Choosing a company with a large number of qualified employees that are able to travel nationally to meet their site needs technically, efficiently and safely is crucial to project success.”

As fresh food demand continues to evolve, it’s beneficial to choose a company like Interstates that is ready with turn-key solutions in automation, electrical engineering, electrical construction and control systems programming and integration. “These projects fall right into our core business solutions,” says Higley. The pandemic will only exacerbate the cold storage shortage, so look forward to even more growth and innovation in automation for these facilities in the near future.

1] https://www.fmi.org/forms/store/ProductFormPublic/the-digitally-engaged-food-shopper


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