The cold storage market is heating up as food preferences evolve and we near a promising vaccine for the coronavirus.
Cold storage is essential to supply chains and only growing in demand. According to Market Data Forecast, it forecasts the global cold storage market to expand from an expected value of $203 billion in 2020 to $293 billion by end of 2025.
Whether it’s a brownfield or a greenfield site, operating a cold storage facility requires a delicate balance between energy efficiency and productivity. With various temperature zones from ambient to deep freeze, every cubic foot affects margins.
Despite the temperature complexities within cold storage warehouses, automation aids in efficient product flow and compliance. Automation is a critical piece of a cold storage strategy that leverages product movement on the ground and above.
An overall cold storage strategy must account for everything—from the foundation to the elevation to the automation.
The coronavirus pandemic brought cold storage into sharper focus. Consumers shifted to online grocery delivery and pick up, while stocking up on frozen foods and other staple items. Demand quickly outpaced supply.
This unexpected stress test on cold storage facilities revealed the potential impact of e-commerce on the industry moving forward. Food preferences are evolving, and e-commerce adoption is growing. Research from Mercatus and Incisiv shows an estimated $250 billion in U.S. online grocery sales by 2025, compared to $54 billion in 2019 reported by Digital Commerce 360.
Food and beverage is not the only industry shining light on cold storage. The pharmaceutical industry is in a race against time. With nearly 250,000 U.S. deaths and 1.32 million global casualties from the coronavirus, during the time of this publishing, an approved vaccine is critical.
How does this affect cold storage? Two-fold.
First, COVID-19 vaccines can require ultra-cold storage temperatures to remain viable. A coronavirus vaccine from Pfizer and BioNTech, a leading candidate for approval, requires a storage temperature of -94 degrees Fahrenheit. While automation doesn’t work as well with temperatures as low as -94 degrees Fahrenheit, it does shine light on how much automation is needed in extreme conditions. Today, automation plays a pivotal role in temperatures as low as -22 degrees Fahrenheit, which is well within most application ranges.
Second, several billion vaccine doses must be produced, stored, and distributed worldwide, while maintaining sensitive temperature levels. Many supply chain experts are raising concerns about cold storage availability and capacity—especially near rural areas.
However, the World Health Organization is partnering with several of the world’s most populous countries as part of the COVID-19 Vaccines Global Access (COVAX) Facility to distribute fairly COVID-19 vaccines globally.
As manufacturers in the food and beverage, pharmaceutical, and other industries embark on cold storage initiatives, success depends largely on the construction of these facilities and the level of automation deployed.
A cold storage facility is essentially a box within a box. The outer structure looks like any warehouse. However, the inner envelope maintains temperatures ranging from ambient to refrigerated to freezing.
Storage capacity varies at facilities, but Statista reports that gross refrigerated storage capacity in the U.S. reached 3.65 billion cubic feet in 2019.
Within all that space, the area most critical to the inner envelope is below your feet.
It begins with the foundation. Using the best automation in the world means little if the slab of your cold storage facility is improperly installed and insulated.
In his article, Ice Age: Designing for Cold Storage Facilities, David S. Miller, vice president for NuTec Design, explains that without the appropriate slab thickness and a floor warming system, the moisture in the soil beneath the slab could freeze and expand.
Ice forms, resulting in heaved floor slabs that can cause structural issues to the foundation and supports within the warehouse.
Miller says, “Floor warming is present to ensure that the soil under the slab and foundations remains about 32 degrees Fahrenheit. Techniques to prevent soil from freezing include vent tubes, electric warming, or heated glycol in tubing beneath the floor insulation.
“Floor insulation is placed between the floor warming system and the building floor slab. The insulation thickness is dependent upon the freezer temperature. For instance, at -10 degrees Fahrenheit, a minimum of six inches of insulation is recommended.”
What are other recommendations for installing and protecting a freezer slab?
Within her article, The Do’s and Don’ts of Cold Storage, Jennifer Carr, architect for Gresham Smith, cites several freezer slab best practices:
Provide a heavy-duty vapor barrier at a freezer slab
Provide proper insulation at freezer slabs. It should be installed in layers, with staggered joints at both the slab and the roof to prevent easy transmittance of temperature
Test your glycol system before you pour concrete to make sure there are no holes or punctures in the piping
Design redundant loops into the heating system—if one loops fails, there is still coverage beneath the slab
To achieve those best practices, Matt Rivenbark, director of sales for the food and beverage market at SSI SCHAEFER, advises working with a supplier who has extensive experience in designing and installing slabs for freezer applications.
“The slab for a cooler—and especially a freezer—is very different from the slab in a normal warehouse,” says Rivenbark. “Even within the same cold storage facility, slabs are treated with different insulation and heating systems depending on temperature zones.
“If condensation and freezing occurs between the ground and the slab, you’re likely to experience structural issues, especially under the loads of automated storage and retrieval systems (ASRS) and other automated systems.”
Height complements your slab investment. Many cold storage facilities install high bay warehouse (HBW) racking systems on their slabs. The ROI of this technology is extremely high for cold storage operators around the world.
“A rack-supported building allows you to go taller cost effectively compared to conventional construction,” says Rivenbark. “Once you reach 60 feet, that's usually the breakeven point for when to choose rack supported.”
By building to taller heights in the 100- to 120-foot-or-higher range, it decreases your footprint down to one half or even one third of the space needed in a manual environment.
“If we’re installing an automated system in a freezer, nine times out of 10, it’s going to be a rack-supported structure,” says Rivenbark.
The racking with the automation built in directly supports the wall and roof of the cold storage facility yielding the tightest box possible. Insulated metal wall panels must be correctly rated.
Consequences of poor insulation?
The lack of proper insulation leads to condensation and moisture vapor entering the warehouse. Ice can form between panels and joints and even “snow” can fall inside the facility if it’s not properly sealed.
A properly structured and insulated cold storage HBW provides several benefits:
Provides storage for diverse products, also in terms of the size and height
Automated handling in extremely demanding conditions, such as deep-freeze temperatures
Highest storage density through footprint optimization and utilization of vertical space
Expand and modify systems, even after several years
With a rack-supported HBW, it eliminates concerns over column obstructions or unusable storage space found in conventional warehouse construction. An ideal scenario for installing automation.
Automation connects everything together. Nearly any warehouse function can be automated for greater efficiency and ROI.
In the case of a cold storage HBW, Rivenbark says many of his customers routinely ask for analysis of a manual warehouse build versus an automated facility.
“Often, the automated option is nearly half the cost,” he says. “That figure doesn’t include labor and energy savings, only the automation and building construction for the warehouse itself.”
The growth of e-commerce is likely to increase the need for automated cold storage HBWs. Research and Markets projects the warehouse automation market to grow from $13 billion in 2018 to $27 billion by 2025.
When operating a cold storage facility, the two most expensive costs are labor and electricity. An HBW paired with an ASRS creates a dense footprint, resulting in less space to cool and freeze while lowering overall energy costs.
What about labor? Freezers are a harsh environment for workers. ASRS and other automated solutions remove the labor component from those challenging environments. Workers can then perform more productive and efficient warehouse tasks elsewhere.
Most cold storage operators pick in layers or cases in addition to full pallets, says Rivenbark. SSI Schaefer partnered with RO-BER, a provider of innovative robotic applications. The company’s gantry robotic systems are launching across the U.S. as a picking solution in freezers, where extended human exposure can be dangerous.
“We’re seeing that next layer of picking down to the case level with gantry or shuttle-based solutions connected to robotic palletizing machines,” says Rivenbark. “The automation builds the case or layerpick pallets before they’re restored in the warehouse and then later brought to the dock for shipping.”
With advancements in automated solutions, should your cold storage facility be semi-automated or fully automated? It depends, says Rivenbark.
What are your operational metrics and requirements? How are your efficiency levels?
In the case of high throughput, a fully automated solution makes sense. While the investment is more, the reduction in labor should yield a better ROI than semi-automated.
A semi-automated solution has a lower upfront cost, but the ROI takes longer. Once you go semi-automated, it’s sometimes very difficult to justify full automation.
“An inefficient warehouse that installs full automation will reach their ROI target quickly,” says Rivenbark.
“However, if I’m semi-automated, those ROI timelines could stretch from five to seven or 10 years. The ROI is about going from point A to point B. When you’re already halfway there, it’s difficult to justify further investment in full automation.”
It always helps to know the potential growth of your cold storage operation when making investments in automation.
The question of automation often rests on whether you’re operating in a brownfield facility or investing in a greenfield site.
Brownfield. A brownfield facility instantly limits the type or amount of automation you can implement. For example, any facility less than 40 feet would not be a suitable candidate for a substantial automated storage and retrieval solution.
This doesn’t mean automation is out of reach for brownfield cold storage operators.
Rivenbark says that a semi-automated solution, such as SSI Schaefer’s Orbiter Pallet Shuttle, allows for dense storage in a smaller footprint.
“The Orbiter system is ideal for food and beverage manufacturers because of low SKU, high-storage counts, allowing for channel storage options in ambient, refrigerated and freezer environments,” he says.
“Another automation solution that fits well with a brownfield cold storage facility is a mobile racking system, utilizing either forklifts or automated guided vehicles.”
Either an Orbiter or a mobile racking system are low-hanging fruit automated solutions that brownfield facilities can leverage for operational efficiencies.
Greenfield. When building a greenfield cold storage facility, automation should be the focus of the design. The cost is nearly half when integrating automation at the beginning. Operators can store the same amount of pallets in about one-third of the storage space required for a conventional warehouse.
“These savings are accounting for just the building cost, refrigeration cost and automation cost,” says Rivenbark. “This doesn’t include the cost of land and other ancillary parts of the build.
“Why start with a manual storage operation only to pay more to automate later?”