Originally published in the Spring 2020 Issue by Trey Barrineau
Surging demand for e-commerce grocery deliveries could spark more construction of refrigerated facilities.
In October 2019, Amazon announced that it will begin offering free two-hour grocery delivery to Amazon Prime members. The move could have a dramatic impact on demand for cold storage facilities, which were already poised for strong growth amid changing consumer preferences.
CBRE’s “2019 U.S. Food on Demand Series,” which focuses on research about cold storage, notes that owners and operators of U.S. cold-storage warehouses should see annual growth of 4% from now to 2022. Evolving consumer behavior is driving this change. The Food Marketing Institute and Nielsen predict that groceries ordered online will account for 13% of total grocery sales by 2022, up from 3% in 2018. Additionally, the Food Marketing Institute predicts that within the next 10 years, 70% of American households will regularly do some grocery shopping online.