While many parts of the economy experience a sluggish recovery to pre-recession levels, cold storage companies and third-party logistics providers are experiencing steady growth.
In part, this growth can be attributed to a shift in the overall nature of the fresh produce industry.
For example, Eden Prairie, Minn.-based C.H. Robinson has begun operations out of a new, high-tech facility in Corona, Calif.
The service center has more than 187,000 square feet of warehouse space, including over 135,000 square feet of temperature-controlled operations, eight cold rooms with varying temperature zones, and 28 dock doors.
Similarly, Newport-St. Paul Cold Storage, based in Newport, Minn., expanded its facilities by 20,000 square feet, shifting 25% or more space from freezer to refrigerated use.
These companies and others continue to grow as consumer demand for fresh produce is growing.
With increased production, demand for cold storage and transportation services is rising.
“I think that the cost to maintain a refrigerated warehouse is high, and the controls we need to maintain operations and meet food safety standards is high, so producers and distributors are more comfortable using third parties for cold storage,” said Drew Greenberg, president, Newport-St. Paul Cold Storage.
Greenberg points to a trend seen industrywide.
Storage and transportation costs continue to rise, while government regulatory standards also require costly compliance measures.
Faced with these expenses, many growers and distributors choose to outsource cold storage and transportation, and instead focus their efforts on production.
Technological advances in greenhouse operations have allowed some growers to produce profitable crops year-round.
Meanwhile, logistics providers can focus their efforts on increasing efficiency, meeting food safety standards and keeping transportation costs low.
“It’s a hard business,” said Greenberg, but the challenges also present room for potential growth.
When asked about his outlook for 2015, Greenberg simply said, “We’re going to be busy.”