Cold Storage in Hot Demand

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JESSIE DAVIES 15 Jan 2016, 10:30 a.m.

As overseas demand for Aussie food increases, so too does the need for cold storage depots near major ports and in regional centres.

Colliers national director for transaction services Shane McIntyre said high demand for fresh food had placed increased pressure on existing storage space and specialised industrial assets.

He predicted the growing demand for these types of assets would be a key trend in the commercial property sector this year.

“In light of the many Free Trade Agreements coming online we’ll see demand for fresh Australian food increase exponentially and this will create demand for cold storage space,” Mr McIntyre said.

“More than ever, producers and retailers need to store more produce and have it ready to export.

“I expect the demand will be gradual and constant in the years to come.”

He said there were enough cold storage facilities to satisfy current levels of demand but expected multiple storage facilities would be built this year.

“Beef and fruit are two examples of products which have traditionally satisfied the domestic market but they will be more inclined to export this year. These goods will require more space than they needed before,” he said.

Specifically, storage space would be required in regional centres and near ports.

While many primary producers were now controlling their own exports, Mr McIntyre said it was more likely they would lease space rather than purchase it.

Refrigerated Warehouse and Transport Association of Australia chief executive Russell Sturzaker said the expansion of the cold storage industry was a trend that was playing out world-wide.

He had observed significant conglomeration of the industry in recent years.

“There’s no shortage of frozen storage at the moment but the major companies are all expanding because the need for space is most definitely increasing,” Mr Strurzaker said.

In his experience, the demand for exported frozen protein had been catapulted by “changing attitudes” toward live-export methods.

Demand for chilled proteins are expanding.

Last month, Inverell’s Bindaree Beef and its meat sales and marketing business, Sanger Australia, began exporting a line of chilled beef to China. The product has been well received, indicating an appetite for fresh not frozen premium meats.

While overseas demand would drive the need for more cold storage – including specialised freight services – the growth of online food shopping was also a contributing factor.

According to Rabobank senior analyst Marc Soccio only around three per cent of Australian’s buy their groceries online, but the uptake is growing strongly.

“To take advantage of this trend, retailers are increasing their investment in online shopping channels, and suppliers should also be thinking about how their products, marketing communications and supply chains could adapt to this online model,” Mr Soccio said.

Original article located here.

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