Cold Storage Warehouses Adapt to Consumers’ Hunger for Frozen FoodsCold storage warehouses consumer taste trends during pandemic
Not sure if you heard, but frozen foods are at the height of their popularity these days. At first, it seemed like a fluke. Grocery chains were reporting that most of their frozen food products were cleared out when the lockdown was initially announced. The trend has continued, however. From quick frozen produce to “meals for one” that used to be affectionately referred to as “tv dinners” to frozen pizza and ice cream, consumers were stampeding to their favorite grocery chains to stuff their freezers full of convenient food.
As a matter of fact, the frozen food category experienced all-time highs this past year. According to the American Frozen Food Institute (AFFI), frozen foods provide nutrition, variety, and certainty. The shelf life on frozen foods tends to be long and they are easy to prepare.
According to AFFI, there are 5 reasons why frozen foods will be very popular in 2021.
- Help meet the growing demand for plant-based foods and meat alternative products.
- Help meet the need for immunity-boosting food products. From frozen juice to vitamin rich berries and vegetables and fish, rich in Omega fatty acids, frozen food products are rich in nutrition and immunity-boosting properties.
- Are excellent for personalized nutrition. Dieters often turn to frozen foods for portion control and easy to prepare meal alternatives. Often a new year brings health and weight reduction resolutions. Meal plans often include smoothies, single serve items, etc., making a run to the freezer both healthy and wise.
- Aid in alleviating cooking fatigue. Making frozen foods part of your diet provides shortcuts, including pre-prepped or cooked ingredients for use in snacks, side dishes and entrees.
- Can be used as staples and help hedge during uncertain times. By leveraging frozen foods, consumers can stock up on an abundance of healthy, simple-to-prepare food items and this can help reduce the number of shopping trips and deliveries.
To compensate for stockpiling frozen food goods, consumers purchased freezers, sending sales up 195% over the same period the previous year. Consumers were getting ready to nest, to hibernate in the comfort of their own homes to ride out the pandemic.
During the initial phase of the coronavirus pandemic, consumers were stressed and craved a blend of comfort and familiarity. Recognizable brand names fared well with consumers and sales spiked. Powerhouse food company Nestle introduced its new line Life Cuisine with 15 recipes targeting four primary dietary categories: meatless, gluten-free, high protein and low carb.
Many consumers reported that they were stockpiling food, much like those in hurricane-prone zones do in preparation for a major storm. From frozen pizza to ice cream and dairy products, consumers needed convenience, food products that were easy to store, access and prepare on a moment’s notice.
Consumers who were already accustomed to purchasing frozen food products before the COVID-19 lockdown tended to expand their purchasing of frozen foods, often changing their product selections. This resulted in a purchase of 70% more than usual. 72% of consumers purchased alternative brands, largely because their first choice of brand was out-of-stock.
Did you know?
American consumers spent $15.5 billion on frozen food products during the 11 week period which ended May 16, 2020? This represents a 40.2% increase over that of the same time last year according to Nielsen data.
Sales increases during 10 week period ending May 16, 2020
PF Chang up 113%
Gardein up 62%
Bertolli up 34%
Banquet up 23%
Frozen Food and the Supply Chain
Supply chains for frozen food products are still in flux. Frozen food processors and product manufacturers often own their own cold storage warehouses. Others turn to 3PL, third party logistics companies that operate public refrigerated warehouses (PRWs). One of the primary services is delivering frozen food products to grocery retailers. Cold storage warehouses are challenging and costly to operate. Dealing with perishable goods, refrigerated warehouses need to maintain rigorous food safety, temperature, track and trace, and quality standards.
Working conditions are harsh as frozen food is stored in -10 to-20 degrees Fahrenheit conditions. Warehouse workers need to wear thick suits and gloves and can only work for specified periods of time in the coldest temperature for safety. Warehouse operators recognize that the labor market is challenging due to the very cold working conditions and this naturally leads to concerns regarding worker safety.
The cold storage warehousing industry has evolved from “mom and pop” facilities that relied on handshake deals to sophisticated consortiums that leverage automation and high end technologies such as automation and AGVs, automated guided vehicles, robotics and mobile racking. Cold storage warehouse operators were often forced into shorter term contracts that make it difficult to plan for the future, especially in terms of investing in warehouse improvements and technology.
As time marched on, more flexibility was required of temperature controlled PRWs. Products needed to be properly stored at different temperatures, track and trace enabled and the warehouses had to be able to handle an array of pallet sizes on demand. Most of the business was simple pallet in, pallet out. Today, cross docking is popular and value added services are in demand in cold storage facilities.
The Impact of the COVID-19 Pandemic
COVID-19 became a great test for PRWs. As restaurants shut down and consumers were locked in their homes, consumers began to order more frozen food products. Instead of PRWs supplying full pallets of a single pallet to a given warehouse, now they were required to deliver a pallet with multiple products directly to grocery retailers. For PRWs, handling smaller orders means that labor requirements and transportation options change, driving up costs.
Refrigerated distribution centers are often positioned near population centers to facilitate order fulfillment demands. Perishable foods require specialized handling and storage in specific temperature zones and special monitoring devices may be used to help safeguard food product quality and food safety.
Because consumers have tended to shelter in place these past months, they often rely on delivery services and curbside pick up options. Speed is a major issue in fulfilling orders. Transportation and logistics down to the front doors of consumers’ homes is the most challenging part of the process. Cold storage warehousing has never been more complex!
Cold Storage Warehouse Operations and Technology
Across the supply chain industry, facilities are often challenged in finding the quality and quantity of labor needed to run warehouses. This is especially true in cold storage warehouses. Harsh, cold conditions can be hard to tolerate. Warehouse operations are labor intensive. Because of these reasons, some cold storage warehouse operators are turning to technology for help.
Some small time cold storage warehouse operators are either not using warehouse management systems or are still using outdated warehouse management software. This software may have been developed to handle simple operations such as pallet in, pallet out. Newer more sophisticated systems have been designed to work with the infrastructure needed for serving e-commerce order. This is a higher level of complexity as it enables warehouse workers to pick individual items and build mixed pallets of goods.
Cold storage warehouses handle deep-freeze and refrigerated proteins, dairy and produce and must operate efficiently to keep costs under control. Operational processes can be complex, with many steps needed to manage temperatures as well as to be able to track and trace goods, ensure food safety and complete quality control.
Operating refrigerated and cold storage warehouses is very costly so it is necessary to use all the warehouse space efficiently. Incorporating automation into refrigerated warehouses helps to meet the need for faster, accurate operations including to the point of last mile delivery.
Today, cold storage warehouses are leveraging automation to meet the need of e-commerce order fulfillment. Here are some of the technologies in use in refrigerated warehouses:
- Autonomous forklifts
- Automated guided vehicles (AGVs)
- Automated shuttle systems
- Automated Storage and Retrieval Systems (ASRS)
Today automation is used to help efficiently fulfill orders, make up for a shortage of warehouse workers willing to endure the harsh temperature conditions of cold storage warehousing and increase the speed of operations.
Today cold storage warehouses are being pushed to the maximum to adapt and meet the challenges of hungry consumers confined to their homes. Cold chain logistics for grocery retailers has been pushed to the limit. Now, more than ever before, consumers depend upon grocery retailers to transport temperature sensitive food products directly to consumers’ homes without damage and product losses.
Freezers and chillers: the world of cold storage warehousing now depends heavily on technology including sophisticated warehouse management systems and automation.