The term “disruptive strategic innovation” describes the behavior that thrust businesses like Southwest Airlines and Amazon towards massive success; it’s a strategic move to go against the tide and create a new way to operate within an industry. Sometimes other types of disruption speed up these industry revolutions, however. Necessity recently combined with innovation and pushed us out of grocery stores, onto our phones, and into the world of electronic grocery commerce.
Now, a particular opportunity awaits those with a little industry insight: cold storage facilities are exponentially increasing in demand, and now is the time to start construction.
But what exactly is going on? Why are people talking about cold storage facilities, and, most importantly, how can you get a headstart on construction?
What’s Happening In Cold Storage?
Imagine for a moment, the day when your refrigerator, which is becoming increasingly smart, orders your groceries. Later that afternoon, a service drone pops by and conveniently places the groceries inside your fridge — you never waste another moment shopping. This utopia of free time is closer than you think.
What was the last thing you bought online? When was the last time you ordered groceries on your phone (also known as “m-commerce”) and maybe even got them delivered? According to industry-leading publication Winsight Grocery Business, the E-commerce grocery business expects to see a 21% increase in sales in 2022. MarketWatch agrees and predicts a 23% increase into 2025.
Saying the pandemic is the only cause of this impending construction boom would be half the story, but it is a large part of the story. In an interview with Winsight, thermal energy management technology expert James Bell remarks that “everyone who wasn’t digital had to become digital so people could do online shopping.” Up-and-coming businesses creating well-planned apps suddenly got more attention, and more traffic than they could handle.
Services like Instacart were already growing as society was slowly beginning to adopt these innovative and time-saving options. Time is the greatest commodity, and ultimately
“buying time” is shown to create higher levels of reported happiness. The industry was enjoying steady growth, but then things changed. As noted in Real Assets Adviser, the catalyst of the pandemic grew the industry demand tenfold almost overnight. While demand skyrocketed, suppliers were left bumbling with too few cold storage facilities, or existing facilities in need of repair or renovation.
The Future of Grocery Stores?
Interestingly, the industry expert being interviewed also poses an idea of the grocery store of the future, reminiscent of our own earlier automated dream: a traditional shop where customers can hand-pick fresh vegetables and fruit, or their favorite deli counter selection, but that’s about it. Research into buying habits showed that we prefer to purchase “fresh” groceries ourselves, but prefer to shop for the center aisle groceries, like canned vegetables, flour, and paper towels, through an automated service or app. This is expected to create smaller automated distribution centers behind or near grocery stores to fill consumers’ entire grocery orders — with a beautiful store-front of curated meats and veggies for your browsing pleasure.
This quaint and idyllic future grocery store will require a massive supply chain of cold storage facilities — both large and small — and cold storage distributors have so many more concerns than those dealing with traditional dry goods. Any failure of a cold storage facility can result in not only losses of revenue, but a public health crisis. How can you avoid these business catastrophes?
How To Build A High-Quality Cold Storage Facility
The best and easiest way to assure your cold storage facility will efficiently and safely operate is to hire a team of experts to design and build the facility. These professionals understand how to create safe workflows in large-scale cold storage facilities and what type of regulations, permits, and codes you will need to adhere to. They can even assist with site selection.
For instance, did you know that minimizing movement for both workers and product is ideal in a facility? This decreases the chance of an accident by creating a controlled area for workers to operate. Learning all the “nuts and bolts” of cold storage facility design and construction takes decades to master, and choosing a design-build firm or experienced general contractor is critical. Successfully navigating the perilous seas of permits and codes can affect how quickly you can start and complete your construction project.
However, cold storage facility construction poses an amazing opportunity and challenge for an experienced design-build firm. We at GALBRAITH love a good challenge and use our own resourceful innovation, fueled by decades of industry knowledge, to craft building solutions.
For instance, we had to completely fabricate a way to open an existing facility without exposing it to the environment. We engineered two units out of insulated metal panels and hoisted them gently to the roof of the existing freezer facility. Inside these sealed units, we created the access ports needed without the client sacrificing a shut-down of the entire unit!
We enjoy creating innovative solutions and can solve any issue that arises during construction. If you’re looking for a partner on your next cold storage project, contact GALBRAITH today.