How cold storage construction industry puts people first
This editorial outlines trends and challenges impacting the cold storage construction industry.
A cold storage warehouse is a harsh environment to work in. Below freezing temperatures for an extended amount of time can wear on even the most seasoned employee. That’s why many of today’s cold storage providers and food and beverage manufacturers are putting their employees first by adding on and building in such features as state-of-the-art breakrooms, nursing mothers’ areas, fitness centers and more.
“To attract workers, [food and beverage processors] are asking us to design better breakrooms with recreational activities like ping pong tables and video games. They’re also investing in WiFi access and cable TV as well as offering hot meals to boost employee retention,” says Joseph Bove, vice president of business development for Stellar, Jacksonville, Fla. “The shortage of truck drivers is also driving a similar trend. Companies are investing in enhanced truck driver facilities and lounges.”
For instance, LEO A DALY, Omaha, Neb., is currently renovating the Kroger Cincinnati Fresh Center to appeal to a multi-generational workforce.
“It’s much more open than their previous environment, both in terms of allowing visual connectivity between areas and allowing employees of all ranks to have free access to different areas,” says Jeremy Klysen, vice president, market sector leader, food/distribution/manufacturing. “Young people find this freedom of movement important because it speaks of a level playing field and a transparent corporate culture. Studies of the Millennial generation show again and again that they want to belong to a mission-driven organization, and that attitude drove our design.”
Food safety drives design-build features
Promoting employee welfare isn’t the only trend driving the future of the design-build industry. Case in point: Many of today’s projects include state-of-the-art, energy efficient, food safety-focused features.
For example, Gray Construction, Lexington, Ky., completed a 650,000-square-foot pork processing facility for Clemens Food Group, Hatfield, Pa., which included 33,000 square feet of automated storage retrieval systems (AS/RS), variable retention time (VRT) blast cell technology and fully automated conveyance. The expansion to the Coldwater Township, Mich., plant also includes steam scalding, waterjet cutting, a patented equilibration cooler system, automated scaling and sorting systems and more.
“These developments greatly improved energy efficiency, reduced the building’s size and also shortened the production cycle in freezing frozen products,” says Tyler Cundiff, director, business development for Gray. “All the improvements impact the bottom line and are described by Clemens as ‘world-class’ for the food and beverage industry.”
ESI Group USA, Hartland, Wis., is replacing the dated central refrigeration system for a large Mideast-based food distributor with a new CO2/NH3 cascade system.
“This type of mechanical refrigeration is becoming very cost competitive, is extremely efficient and mitigates risk vs. conventional ammonia plant systems,” says Timothy Gibbons, vice president of design.
Likewise, A M King Construction Co., LLC, Charlotte, N.C., is working on a number of refrigerated food distribution and processing projects to meet new workflow and storage needs.
“Across these projects, we have utilized pre-packaged, low-charge refrigeration units to minimize refrigerant charge; automated conveying and racking systems to improve operational workflow; energy efficiency systems inclusive of LED lighting, PV solar, interactive building automation systems; and alternative fire suppression systems that maximize the cubic volume of high pile storage locations,” says Carl Morse, senior project manager.
Additionally, CMC Design-Build, Inc., Quincy, Mass., is finishing a 100,000-square-foot manufacturing facility in San Antonio, Texas, that will manufacture ready-to-eat meals for a retail grocer.
“This facility was designed to meet the highest levels of food safety, including complete segregation of all high care and low risk people, products and utilities,” says Nathan Larose, director of project development. “Additionally, critical process air systems were installed in all of the high care areas that are refrigerated.”
Earlier this year, Stellar designed and built a distribution facility for Caspers Distribution’s Tampa, Fla., headquarters facility. The project used locally sourced materials, and included ammonia compressors that operate with variable frequency drives, employee welfare areas, machine and maintenance rooms and more. Plus, Stellar utilizes AutoDesk Revit software, which gives clients a virtual “walk through” of how the finished product will look.
And, Primus Builders, Woodstock, Ga., is working on several cutting-edge projects, specifically a beef processing plant that includes cooler, freezer and palletizing areas with rack-supported AS/RS and multiple cranes, while its Tyson projects in Macon, Ga., and Pottsville, Pa., involve massive rack-supported AS/RS.
“Our clients face a number of challenges that impact their businesses every day—rising energy costs, employee retention, safety and speed to market come to mind,” says Matt Hirsch, president. “It’s harder and more competitive than ever. We wanted to offer design and construction solutions to alleviate these challenges and help them achieve their business goals. The answer was automation.”
Impact from tariffs and rising construction costs
The food and beverage industry affects and is affected by global dynamics, says Cundiff.
“The tariff initiative, for instance, could push the U.S. off track,” he adds. “Gray has implemented a mitigation plan that strategically accounts for potential steel price increases to prevent a total cost impact of a project.”
For its part, Hixson is seeing the cost of construction materials, such as steel, aluminum, copper and stainless steel rise as a result of the newly enacted tariffs, says Chris Jarc, vice president and project manager for Hixson Architecture Engineering Interiors, Cincinnati, Ohio.
“In addition, labor costs in the construction industry are rising as employment remains high and unemployment low,” he says.
The fluctuation in the market regarding material pricing also makes room for more competitive pricing.
“We have seen pricing remain valid for as little as 72 hours. This limitation is putting strain on design-builders to properly evaluate bid proposals and take on additional risk when pushing for owner approval to maintain a project schedule or proposed budget,” adds Morse “Also, many owners want to lock in pricing for potential projects. This has put an increased workload on third-party subcontractors and suppliers that are having difficulty keeping up with opportunities.”
Likewise, labor is the single biggest challenge, according to Tippmann Group, Fort Wayne, Ind.
“Employee retention is becoming more and more difficult because of the recent growth of the economy,” says Steve Tippmann, executive vice president. “Bringing in new talent is increasing in cost at such a fast pace. Depending on the market, our labor costs are increasing 10-15% annually. In the future, we see our employees being more skilled and highly trained in order to support our day-to-day business, which changes frequently with the increase in technology and improvements in the way we move product through the warehouse.”
Furthermore, tax law changes alter the return on investment for some projects.
“Construction costs have increased about 20% in just the past two years,” adds Tippmann. “In today’s world of increased construction costs, it is much more affordable for companies to expand and add on to an existing location that it is for them to build new.”