U.S. Cold Storage Market (2024 - 2030)

U.S. Cold Storage Market Size & Trends

The U.S. cold storage market size was valued at USD 36.91 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 13.3% from 2023 to 2030. The growth can be attributed to several critical factors, such as technological advancements in packaging, processing, and storage of perishable food products and temperature-sensitive items. The market has also benefitted significantly from the stringent government regulation toward the production and supply of temperature-sensitive products. The industry is poised for unprecedented growth in the next seven years owing to growing organized retail sectors in the emerging economies which will create opportunities for the service providers over the forecast period.

Growing demand for connected trucks, high-cube refrigerated trailers, and vehicles that facilitate cross-product transportation is likely to drive demand for cold chain services. Ever-increasing health consciousness among consumers has inspired healthier eating habits and resulted in a rising demand for quality food packaging and storage solutions. Outsourcing services have been gaining popularity among businesses owing to factors such as increasing competition, a rapid rise in operational costs, and stringent quality standards. Numerous benefits of outsourcing these services, such as reduced operational costs, improved flexibility, higher efficiency, and expertise, have also encouraged its widespread adoption.

Service providers in the U.S. cold storage market have enhanced their efforts to protect temperature-controlled products from potential tampering or malicious actions. Securing the facility encompasses not only refrigerated warehouses but employees and visitors as well. This has resulted in increasing demand for the adoption of monitoring components such as telematics and telemetry devices, sensors, data loggers, and networking devices. Such components significantly improve the performance and efficiency of refrigerated storage and transportation.

Industry players are relying on RFID and Automatic Identification and Data Capture (AIDC) for enhancing the efficiency of the order fulfillment process. The growing penetration of Bluetooth technology and RFID sensors, across the logistics industry, is expected to spur the adoption of AIDC technology. Furthermore, cold storage operators focus on maximizing their throughput and order accuracy by using robotics applications, high-speed conveyor systems, and automated materials handling equipment. These technological advancements are in turn expected to boost the growth of the market over the forecast period.

Market Concentration & Characteristics

The U.S. cold storage market growth stage is high. Globalization of the food supply chain, changing customer preferences, and the growing need to preserve medications and other temperature-sensitive goods have altogether contributed to an increase in the demand for cold storage facilities.The increasing preference of consumers for fresh and perishable commodities has led to a surge in the need for cold storage facilities to maintain the integrity and quality of these products.

The target market is also characterized by a high level of mergers & acquisitions by the leading players. The high level of mergers and acquisitions (M&A) in the U.S. cold storage market is driven by the pursuit of market consolidation and strategic expansion. Cold storage operators are engaging into such growth strategies to constantly upgrade their technology and stay ahead of the competition. To expand their services and offer end-to-end solutions, players also collaborate with logistics suppliers, transportation corporations, or technology organizations.

The complex regulatory environment around cold storage is essential to guaranteeing security, excellence, and adherence to standards of temperature-controlled storage facilities. Policies differ from region to region and are intended to handle the particular difficulties that come with storing medications, perishable commodities, and other items that are sensitive to temperature. Aspects including equipment standards, facility design, and environmental considerations are all covered under the regulatory framework. Strict regulations are imposed on the distribution and storage of pharmaceutical items by regulatory bodies including the U.S. Food and Drug Administration (FDA). Good Distribution Practice (GDP) compliance is essential to preserving the safety and effectiveness of pharmaceuticals, and cold storage facilities need to follow these guidelines to guarantee the integrity of the pharmaceutical supply chain.

A few alternatives and substitutes have emerged in the constantly evolving cold storage industry, providing innovative solutions to concerns related to perishable goods preservation and storage. Hybrid cooling systems provide an innovative way to improve energy efficiency by fusing conventional refrigeration with alternative technologies like thermal energy storage or phase change materials. By optimizing cooling operations in response to variables like demand and energy prices, these systems help lessen the need for constant electrical refrigeration. Insulated containers and pallets equipped with advanced insulation materials and designs offer another option for cold storage consumers. When fitted with heating or cooling components, these containers can regulate temperature during transit and offer an alternate method of product preservation without requiring centralized cold storage facilities.

In many different markets and industries, end-user concentration plays a vital role in shaping pricing strategies, supply and demand dynamics, and overall business stability. This concentration describes the degree to which a company's revenue is largely derived from a small number of clients or customers. End-user concentration can have a significant influence and is frequently evaluated in terms of both opportunities and hazards. Businesses largely depend on a limited number of critical consumers for their revenue in marketplaces where end-user concentration is strong. Businesses frequently adopt tactics like customer diversification, market expansion, and product or service portfolio development to mitigate risks associated with end-user concentration.

Warehouse Type Insights

In terms of revenue, the public segment dominated the market with a share of 77.94% in 2022, owing to its significant adoption among consumers on leased or short terms purposes at affordable costs. Based on the warehouse type, the market has been categorized into two segments, namely private & semi-private and public. A public warehouse is operated as an independent business or third-party provider that offers various services, such as handling, warehousing, 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.

Given the massive costs associated with the construction and maintenance of warehouses, only big companies can afford to own and maintain their private warehouses. However, the companies are increasingly constructing private warehouses as they offer significant benefits, such as flexibility, greater control over cost, and the ability to make decisions regarding the overall activities and priorities of the facility. Moreover, due to increased international trade and consumer spending, cold storage operating profits have risen dramatically in the last five years. Low-interest rates have also enabled operators to finance new constructions. The private and semi-private segment is expected to portray a significant CAGR of 11.1% from 2023 to 2030.

Construction Type Insights

The production stores segment held the largest share in 2022 and is estimated to grow at the highest CAGR exceeding 15.6% from 2023 to 2030. This growth is attributed to the growing emphasis on the protection of goods, which include raw materials as well as finished food products throughout the production process in a plant. The bulk storage segment is also expected to proliferate over the forecast period. Bulk storage warehouses are suitable for storing fruits and vegetables in large volumes. They can also be used to extend the availability of other bulk materials such as flour, cooking ingredients, and canned goods while protecting them from spoilage and keeping them away from direct sunlight.

Constructing refrigerated warehouses near ports can help simplify the customs procedures associated with the import and export of temperature-sensitive products. Improvements in efficiency and automation have widened the gap in operating performance between older and newer cold storage facilities. In the past few years, operators in the industry have implemented new technologies, such as high-speed doors, energy-efficient walls, automated cranes, and cascade refrigeration systems, to increase efficiency and reduce operating costs. For instance, the adoption of automated cranes has enabled operators to pile goods at greater heights, leading to an increase in the average building height of newer facilities.

Temperature Type Insights

The frozen segment accounted for the largest share exceeding 81% in 2022. Increasing awareness about convenience food among individuals has led to a shift in their preference for ready-to-cook meals. Moreover, consumers are increasingly opting for frozen food owing to its support for microwave cooking and ease of use in terms of packing techniques. These trends have significantly contributed to the rise in the adoption of frozen foods, thereby leading to segment growth. However, the chilled segment is anticipated to witness a notable shift in growth over the forecast period.

Based on temperature type, the market is segmented into chilled and frozen cold storage. The warehouses falling under the chilled segment maintain their storage temperature in the ranges of above -5°C. They are used to store fresh fruits & vegetables, eggs, dry fruits, milk, and dehydrated foods, among others. Meanwhile, the warehouses falling under this segment maintain their temperature in the range from -10 to -20°F. They are used to store frozen vegetables, fish, meat, seafood, and other products.

Application Insight

In terms of revenue and market share, the fish, meat & seafood application segment captured the largest market share of 35% in 2022. Based on application, the market is categorized into fish, meat & seafood; fruits & vegetables; dairy; processed food; and pharmaceuticals. The processed food segment is projected to witness highest growth of 16.9% from 2023 to 2030 owing to high demand of processed food products due to its several advantages such as immediate consumption, easy cooking, easy handling, and storage. Moreover, continuously changing lifestyle, increased safety, and growing need for easy convenience majorly drives the adoption of processed food. The adoption of processed food is also increased owing to excellent marketing and innovative packaging offered by the providers which further fuels the growth of the market.

The increasing demand for perishable products and fast delivery requirements associated with the e-commerce-based food and beverage delivery market has led to a significant boost in cold chain operations. The processed food segment is expected to witness the highest CAGR over the forecast period owing to the continued improvements in food packaging materials. However, the growing incidence of food and pharmaceutical counterfeiting has resulted in the introduction of stringent government regulations regarding production and supply chains. These regulations are impelling industry incumbents to develop rigorous practices, and service providers are making investments in improving their infrastructure to obtain safety certifications.

States Insight

California held the largest share in terms of revenue in 2022 and is projected to maintain its dominance in the market from 2023 to 2030. The significant share is attributed to the state’s 400 million cubic feet of cold storage space, which serves a large user base. California represents the highest number of facilities, which can be attributed to its large population and the significant need for these facilities. All the facilities in this state are regulated by the California Department of Public Health, Food and Drug Branch.

Florida, Washington, and Texas are some of the leading states in the market, which held a significant market share in 2022. North Carolina and South Carolina are some of the highest-growing markets which are expected to witness a CAGR of over 15.2% and 14.7%, respectively, from 2023 to 2030. The cold storage companies are also finding lucrative opportunities in North Dakota and Virginia among other states. Developments in transportation facilities, technological advancements, and increased adoption of frozen foods have proliferated demand for refrigeration and storage, leading to market growth.

Key Companies & Market Share Insights

Some of the key players operating in the market include Americold Logistics, Inc. and Wabash National Corporation among others.

• Americold Logistics, Inc. is a temperature-controlled warehousing and transportation company. The company operates its business through three segments, namely warehouse, third-party managed, and transportation. Its offerings include producer solution and retailer solution. In December 2020, Americold Logistics, Inc. acquired Agro Merchants Group from an investor group for USD 1.59 billion.

Wabash National Corporation offers advanced, connected, engineered solutions for the incumbents of the logistics, transportation, and distribution industries. The company operates through Transportation Solutions and Parts & Services business segments. Its product range includes refrigerated vans, tank trailers, dry vans, platform trailers, refrigerated truck bodies, and dry truck bodies.

Tippmann Group and Penske are some of the emerging market participants in the target market.

• Tippmann Group has two subsidiaries, namely Interstate Warehousing and Tippmann Construction, which specialize in the construction of cold storage and management of frozen and refrigerated distribution centers. Interstate Warehousing manages refrigerated and frozen warehousing needs, offering temperature-controlled and customized distribution solutions for the food industry.

• Penske provides supply chain management and logistics solutions worldwide. The company operates dedicated cold storage and ambient temperature facilities, driving operations through its expertise and technology. It majorly caters to convenience and grocery stores. It offers solutions such as freight management, warehousing, distribution center management, and Transportation Management Solutions (TMS).

Recent Developments

• In December 2022, Interstate Warehousing, a Tippmann Group’s company, announced the expansion of its facilities by holding a groundbreaking ceremony in Kingman, Arizona. The facility was built on a 92 acre site to address the cold storage needs on the West Coast.

• In September 2022, LINEAGE LOGISTICS HOLDING, LLC finalized the acquisition of Grupo Fuentes, a significant transport and cold-storage facility operator based in Murcia, Spain. On August 2nd, 2022, the deal was initially announced. Grupo Fuentes manages a fleet of approximately 500 cars and trailers, a cold storage warehouse, six logistics centers, and value-added services to support those facilities.

• In August 2022, Wabash National Corporation announced a strategic partnership with Bergey Truck Center, a commercial truck solutions provider. The partnership was aimed at expanding the company’s geographic footprint in North America.

• In June 2022, Burris Logistics acquired R.W. Zant Co., a Los Angeles-based company that specializes in the distribution and storage of proteins and meats. As a result of this acquisition, Honor Foods, a subsidiary of Burris Logistics, expanded its food service distribution network in the western U.S.

• In April 2022, LINEAGE LOGISTICS HOLDING, LLC, a prominent global food firm, announced the development of a next-generation automatic facility for cold storage in Windsor, Colorado. It built a more than 200,000-square-foot automated facility that will offer JBS improved blast freezing and storage capacity and rail connectivity to assist export product transportation to West Coast ports.

• In January 2022, Seafrigo Group announced the opening of a new warehouse in New Jersey. This was the fifth warehouse of the company in the area; the new 85,000 square feet warehouse facility was aimed to address customer fulfillment needs.

U.S. Cold Storage Market