Little Guys Squeezed Out of Cold Storage

Ownership of cold storage space is consolidating to a degree that makes it difficult for small processors of refrigerated and frozen products to find space for their goods, according to a report by Bloomberg.

The Bloomberg article describes how Americold Realty Trust and Lineage Logistics, between them, have snapped up some 60% of the refrigerated and frozen warehouses in America. Private equity firms are aggressively pursuing deals for cold-storage facilities, which are in increasing demand in part because the push for home delivery of groceries requires more such facilities in wider distribution.

As a result, it’s becoming increasingly harder for small processors, especially startups that are not in a position to sign long-term leases, to find space for their refrigerated and frozen products. In a speech to the Global Cold Chain Alliance, the owner of Jeni’s Splendid Ice Creams, pioneer of salted-caramel ice cream, described how Americold twice kicked him out of its warehouses to make room for larger customers.

The situation is exacerbated by a pricing structure, supported by sophisticated digital systems, that charges according to how full customers keep their allotted space and how frequently warehouse workers have to pick goods for small shipments.