The grocery landscape is changing. What were once considered futuristic technologies like drones, robots and artificial intelligence are now merging with grocery retail to expand and re-shape the shopping experience.
The same can be said for the cold storage construction environment, where advancements in energy efficiency, food safety and green building materials present positive moves forward for the design-build industry.
Refrigerated & Frozen Foods interviewed several design-build firms to discover the trends impacting today’s—and tomorrow’s—cold food industry.
Prepping for labor shortage
The biggest trend affecting the cold storage construction industry is a labor shortage of workers specializing in mechanical, electrical, plumbing and other skilled trades.
“The current labor shortage is in part of a ripple effect from the recent economic recession, but it has also been amplified by other factors this year,” says Joseph Bove, vice president of business development for Stellar, Jacksonville, Fla. “A lot of cash earmarked for building projects was on hold for the past couple of years, as companies awaited the outcome of the 2016 election. Now, they’re spending that infrastructure money. Plus, the cold storage industry is only continuing to grow, and we’re starting to see the front end of that growth.”
The labor shortage is also credited to the cost of acquiring—and retaining—quality labor.
“The availability of quality labor along with its associated cost and the cost of that labor in the future is a major driving force in both the location of the project and the type of warehouse needed (traditional vs. automated),” says Steve Tippmann, executive vice president for Tippmann Group, Fort Wayne, Ind. “These trends can be attributed to the layout and design of the facilities, which are now more labor efficient than ever.”
Increase in robotics, automation
With a labor shortage comes an increased need for robotics and automation.
“As the available workforce declines, many plants have been replacing routine packaging and palletizing activities with robotic and automated systems, including an increase in the use of AS/RS warehousing,” says Jack Michler, regional manager for ESI Group USA, Hartland, Wis.
Automation also plays a favorable role in the accuracy of orders, thus reducing the need to manually handle returns, adds Charlie Stone, director of business development—food and beverage for McShane Construction Co., Rosemont, Ill.
“In recent times, the term ‘lights out’ has been used to describe facilities with minimal personnel. Perhaps a better term is ‘dimly lit,’ as operations continue to seek ways to operate more efficiently, effectively and environmentally friendly,” he says.
Heightened awareness of energy efficiency
Another trend impacting the future of the cold storage construction industry is the heightened awareness of energy and water consumption, according to Erik Gunderson, vice president of Primus Builders, Woodstock, Ga.
“Many of our clients have incorporated company-wide initiatives to be more environmentally friendly. This often means incorporating building features that may be more cost intensive at the beginning of the life of the facility, but that will withstand daily abuses and provide for longer life. This helps earn LEED points and achieve certification,” he adds. “Many of our clients have also expressed interest in alternative refrigeration options like NH3, including low charge and fluorocarbon-based systems. There is also constant awareness of building consumables like power, water and maintenance items.”
For legacy systems, a reduction in dependence on HCFC refrigerants, such as R22, continue to be a growing trend, says Andrew Scott, mechanical utility engineer for Dennis Group, Springfield, Mass.
“While reclamation and re-use are still options, most manufacturers are moving beyond incremental upgrades and converting systems to use natural refrigerants such as ammonia, carbon dioxide or glycol systems powered by ammonia, all of which provide a long-term energy efficient solution,” he adds.
Many facilities are also moving toward low-charge ammonia systems because of the decreased risk to people, product and plant.
“Low charge uses a smaller quantity of ammonia, putting facilities below regulatory standards that require risk management programs to be put in place,” says Jeremy Klysen, vice president, market sector leader of food/distribution/manufacturing for LEO A DALY, Omaha, Neb. “The lower risk also gives facilities more flexibility on site selection.”
Furthermore, the design-build industry is showing more of a demand for energy modeling, Klysen adds.
“While code does a good job of approximating an energy efficient facility design, performance-based standards can achieve an even better return,” he says. “When we use energy modeling as part of a project, we can design a building envelope that exceeds code at a lower first cost and a lower operating cost.”
After labor, utilities are said to be the most costly line item for businesses that require multi-temperature buildings.
“Refrigeration options such as cascade, ammonia and low-charge ammonia have a significant impact on energy consumption,” says Stone. “From the various cooling systems and technologies to reclaiming and recycling water, new lighting options and solar power, even the use of natural and low-water landscaping—all are at the forefront in design-build construction.”
Food safety still top priority
“Food safety is still a top issue, especially due to the significant increase in product recalls due to undeclared allergens, FSMA-required track-and-trace documentation of third-party product suppliers, misbranding, foodborne pathogens, lack of pasteurization documentation, foreign matter contamination, etc.,” says Michler. “These food safety issues are mandating a more dedicated focus on continuing employee safety training.”
Likewise, FSMA regulations require owners to review and modify existing building layouts in food processing facilities, adds Dan Crist, vice president of A M King Construction Co., LLC, Charlotte, N.C.
“Air quality testing and swab tests for listeria are recommended for food facilities prior to commencement of food processing,” he adds. “Owners are focused on better efficiency both from operational and energy perspectives.”
Build to suit vs. Greenfield construction
Build to suit is said to be the most common construction solution for cold food and beverage processors. That’s because no two food facilities or owners are alike.
“Product flow and material storage layout dictate the design of a facility,” says Crist. “The building is typically designed around these flow and storage requirements. The design-build method of delivery is ideal for food facilities.”
Build to suit works well when designing for a single owner as opposed to if the building will be occupied by multiple owners over time, adds Klysen.
“As operations change, design features that fit one operator’s specific needs might not fit with another’s. For example, a spec warehouse would be designed to a 32-foot height with 28 feet being the top of storage,” he adds. “However, if designing for a specific owner’s needs, we might push it to 40 feet, or (if automation is involved) to 100 feet.”
Built to suit is also recommended because repurposing an existing building to meet unique specifications can be costly.
“There are a number of factors that set a cold storage warehouse apart from a standard spec building, such as the height, insulation, floor system and the ability to make the space cold,” says Bove. “Repurposing a ‘dry’ building to meet these standards usually involves tearing out existing features in the building, which requires more time and greater cost upfront.”
Meanwhile, the build-to-suit model is considered to be advantageous for refrigerated foods processors in particular.
“Cold storage facility design and construction require specialized building specifications, with which many land developers are not particularly familiar,” says Tyler Cundiff, director, business development for Gray Construction, Lexington, Ky. “As a result, it is important that cold storage manufacturers have the building built to their specification.”
On the other hand though, the industry is also experiencing an uptick in expansions and renovations of existing buildings.
“Cold storage providers are continuing to grow their portfolios with new strategically located facilities and expansions of existing facilities,” says Ginny Bode, marketing director for Fisher Construction Group, Burlington, Wash.
Also, expanding an existing facility tends to be more economical for some cold food processors.
“We are currently designing and constructing more expansions at existing food facilities. Frozen food and processing space are the focus of most current expansions,” says Crist. “It is more economical for our clients to expand an existing facility than build on a new Greenfield site.”
Plus, a building’s prior use can often conflict with the rules and regulations of food safety, says Stone.
“We continue to see a mix of Greenfield projects and expansions across the spectrum of cold storage food and beverage users,” he adds. “The decision to expand is based on anticipated needs vs. available land. In some instances, clients will have available land, but their growth projections exceed the capability of the expansion. To this end, we are seeing many clients consider the option to build a second facility to supplement their existing operation.”
E-commerce, employees and the future
The growth of the industry is in e-commerce, and many of today’s design-build firms are embracing cold food processors’ demands of delivering more e-commerce-centric solutions.
Processors are situating distribution centers closer to consumers. They’re asking for safer work environments, social areas for collaborative work, eco-friendly building features and test kitchens and laboratories.
Today’s design-build firms are creating forward-thinking solutions.
“From a design-build perspective, this means decreasing the time between greenlighting a project and startup with fast-track project delivery where design and construction disciplines are highly coordinated,” says Scott. “Manufacturers need to be nimble and responsive to rapidly changing consumer demands; therefore, the facilities they operate need to be designed and built in a fashion to account for both product changeover and future expansion.”
Meanwhile, the rise in online shopping and just-in-time delivery has created growth at U.S. ports, as they aim to fulfill orders for temperature-sensitive products.
“Now more than ever, distributors require additional space to accommodate a spike in SKUs as well as sophisticated temperature-control technology to properly handle a wider selection of inventory,” says Stone. “As a result, U.S. ports are now hotbeds for large multi-temperature facilities that supply smaller yet higher-reaching infill distribution centers situated closer to customers for faster last-mile deliveries.”
Likewise, the influx of e-commerce has spawned a new industry entirely—meal kit services.
“Meal kit companies have introduced a new approach to building design and construction, as more of these businesses seek to renovate existing facilities (or build brand new ones) that are unique in layout and purpose—to portion, repackage and distribute food in a novel way,” adds Bove. “This has forced design-builders who work on these projects to rethink traditional methods to cater to the unique needs of this new model.”
And, thanks to acquisitions like Amazon of Whole Foods Market, e-commerce companies primarily in the ambient/dry arena are now being required to build cold-temperature distribution centers.
“It is important for the e-commerce companies to understand that cold storage distribution construction is much different than dry box warehouse construction,” says Cundiff. “This moving landscape is also causing our distribution customers to have more focus on flexibility and future expansion.”
Other e-commerce businesses are expanding and retrofitting distribution centers, according to Bode.
“[This] creates food distribution hubs located in close proximity to major metropolitan areas,” she adds. “These facilities are retrofitted to handle food perishables in a food-safe environment.”
Future trends also entail automated freezers that generate and blend nitrogen to reduce oxygen levels in a freezer, says Klysen.
“In some jurisdictions, this can eliminate the need for fire suppression systems in the freezer. This may benefit owners by reducing the cost of construction, operations and maintenance,” he says.
Whatever the project calls for, today’s design-build firms embrace automation, food safety protocols, labor management and e-commerce to keep the cold food industry retrofitting, expanding and building for the future.