Little Guys Squeezed Out of Cold Storage

July 17, 2019
Consolidated ownership of cold storage space is making things hard for small processors of refrigerated and frozen products.

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.

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