Changing dynamics in North American cold storage

Volatile macroeconomic conditions will impact cold storage operators in North America and lead to increased costs, specifically in key categories. There are short-term and long-term trends at play, such as structural labor tightness being slow to recover, sticky inflation leading to fewer-than-expected rate cuts, and high and volatile energy prices expected until the end of 2030, while scope 3 emission reduction targets will add more costs down the road.

Macro conditions not only impact cold storage costs directly but also lead to food consumption and production changes, which can further impact cold storage volume and possibly revenue generation. From a consumption perspective, inflation is expected to lead to more cautious food spending and to trading down. Frozen categories are expected to be the short-term winner for cold storage, while private label and foodservice are long-term demand drivers. On the agricultural production side, overall domestic production volume may be stable, but a volume shift to poultry, cheese, and regional and global trade is expected.