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Cold chain: key trends in 2024 for food storage

December 21, 2023


As we navigate an ever-evolving landscape in logistics and refrigerated food storage in Latin America, 2024 brings a series of trends and transformations. Follow some of the critical changes that are shaping our industry, from the integration of sophisticated solutions in key markets such as Brazil and Mexico, to the adoption of automation and sustainability.

We’re on the brink of a revolution, not only adapting to change, but also actively shaping the future of logistics and refrigerated food storage in Latin America, with innovation, efficiency and a deep commitment to environmental responsibility.

Normalization of stocks and the return to pre-pandemic levels

Companies in the food sector are close to finding their balance when it comes to stock levels. The uncertainty we saw during the pandemic is disappearing. Businesses are moving towards stability, which is returning stocks to a state of consistency.

This change is crucial. We’re not just talking about having enough stock on hand. It’s about predictability and reliability in the supply chain. Companies can plan better, forecast more accurately, and avoid the panic of stock surplus or shortage.

We’re entering an era in which ups and downs in stock levels are becoming a thing of the past. It’s about maintaining stable and manageable stock levels that are in line with the market’s real needs. On the one hand, we can see a lower occupancy in some facilities, higher turnover and a return of stock levels to a more normal level. For us, in cold chain logistics, this translates into smarter allocation of resources, better use of space and happier customers.

Sustainability: an integral approach

Discussions about sustainability in the cold chain are changing significantly, going beyond energy efficiency to embrace broader criteria. In the context of COP28, what is shaping our industry is the adjustment of refrigerated storage temperatures, from -18°C to -15°C. This change, although it may seem small, can lead to significant energy savings and still ensure that products remain perfectly frozen.

The urgency of reducing gases that destroy the ozone layer is also growing. Increasingly, companies are being driven, sometimes by customer demand, to replace older refrigeration systems based on more environmentally friendly options, such as CO2 and ammonia.

In addition, we’re focused on reducing water consumption. All efforts to conserve this vital resource reflect our commitment to sustainability. In certain of Emergent Cold LatAm buildings, we are investing in an advanced refrigeration system that doesn’t use water in the condensers and, at the same time, is energy efficient.

Circularity is being transformed from a concept into concrete practice. The cold chain logistics sector involves improving the reuse of materials, such as pallets, and increasing efforts to recycle cardboard boxes. At Emergent Cold LatAm, we’re going beyond by offering services that are in line with our clients’ sustainability goals, such as the collection of used cooking oil from restaurants.

As the challenges of social inequality grow around the world, the importance of reducing food waste becomes even more evident. By improving resource management and reducing waste, we are addressing environmental concerns and contributing to the fight against social inequality. This comprehensive approach to sustainability is the future of our industry, combining practical actions with a commitment to social responsibility.

Using Artificial Intelligence (AI)

Embracing AI in supply chain management is a game changer, not merely a passing trend. It is revolutionizing how we handle operations, bringing levels of quality and consistency that were previously unattainable. AI provides essential predictive insights to optimize warehouse operations, especially in cold storage.

In cold storage, the role of AI in warehouse management is vital. It’s not just about keeping things organized; it’s about smarter forecasting and better stock control. AI helps us understand and adapt to changing product profiles, ensuring that we make the most of our warehouse space. This isn’t only about stacking boxes; it’s about dynamic space optimization.

The impact of AI on productivity and precision is profound. We all know that inaccuracies can lead to downtime, creating backlogs that nobody wants. AI helps us stay on course by reducing these costly errors.

There’s also the issue of safety, a top priority in any warehousing operation. AI helps optimize facility layouts, creating more storage space and safer handling areas. This isn’t just about efficiency; it’s about ensuring the well-being of our employees and the safe handling of products.

AI also plays a crucial role in reducing direct and indirect labor costs. Intelligent warehouse systems monitor performance indicators, providing data that can lead to process improvements. This means adjusting our operations to achieve maximum efficiency.

Other benefits of AI in our sector include predictive maintenance, which helps us predict and avoid equipment failures, and improved safety measures. All these factors come together to create a smarter, more efficient and safer cold storage operation. AI isn’t merely a tool; it’s the future of how we manage our supply chain, and we’re fully committed to making the most of its potential.

Integration: a demand for comprehensive solutions

Looking to the future, there’s a clear need for better connected cold storage solutions. This goes beyond a trend – it’s a major game-changer, especially in our region. Customers aren’t just looking for storage; they want the full package, including transportation services and the many value-added services that a 3PL partner can potentially offer.

What’s more, customers want data, and lots of it. They need to make smart decisions about their stocks. That’s why integrating Electronic Data Interchange (EDI) with their Enterprise Resource Planning (ERP) systems and our Warehouse Management System (WMS) and Transportation Management System (TMS) is crucial. It’s about giving them the power to control their stocks with confidence.

At Emergent Cold, we’re on top of this. We’re making our IT system uniform across the board. This means that our customers have total visibility via a dedicated portal. We’re talking about a system that connects everything – a complete view that makes operations smoother and reduces costs. This is what our era of efficiency is all about.

Facilities close to the food industry

The search for facilities close to the food industry is really shaking up the sector in Latin America. We’re watching it become reality, especially in Mexico and a few Central American countries. What does this mean for us? There’s a growing demand for comprehensive cold storage solutions. This is critical not only for the expanding local markets, but also as a key component in export strategies.

As food production plants move to these regions, the dynamics are changing. It’s not only about storing products; it’s about providing a complete set of services to meet the complexities of these new markets. The impact is especially significant in border areas such as the USA/Mexico. There, the demand for integrated solutions is growing rapidly.

We’re talking about the need for perfect coordination between warehousing, transportation and logistics services. This means creating an efficient flow of goods across borders, meeting the growing demands of domestic and international markets. This change is a great opportunity for us to show what we can do in terms of offering high-quality integrated cold chain solutions.

Automation to meet urban demands

As we move towards 2024, urbanization is pushing us towards a more strategic approach to automation. In densely populated areas, sophisticated order selection and storage systems become essential. They’re not just a fancy addition; they’re crucial for optimizing space and functionality in these urban centers.

In certain locations, where the cost of land is considerably higher, the smart move is to invest in automated warehouses. Take our recent investment in Chile, for example. We set up a warehouse with 10,000 pallet positions using forklifts, and now, we’re adding another 25,000 pallet positions. This isn’t merely growth; it is strategic expansion as well.

E-commerce also plays an important role here. Customers are switching to direct-to-consumer sales. Having warehouses close to urban centers isn’t just convenient; it’s essential for efficient distribution.

In short, the urban landscape of 2024 is dictating a new direction for cold storage facilities. We’re responding with automated solutions and strategically building warehouses in locations where we can meet the demands of a rapidly evolving market, driven in part by a more complex supply chain. This is the future of urban cold storage – automated, efficient and closer to the consumer than ever before.

Search for reliable partners

Companies are becoming more discerning in their partnerships, especially when it comes to cold storage. They’re looking for suppliers who offer more than just space, prioritizing those who adhere to high standards such as HACCP. This trend aims to ensure cost control, regulatory compliance, and environmental responsibility. In response, we’re investing in new facilities and modernizing existing ones to meet these high expectations.

In addition, there’s a growing trend, especially in Latin America, to outsource warehousing needs. This shift, already prevalent in the US for around 30 years, is now gaining ground in Latin America. Companies are realizing the benefits of comprehensive cold chain solutions that come with high service standards. By outsourcing, they’re taking advantage of specialized knowledge, advanced facilities and a full range of services that go beyond simple storage.

This shift towards outsourcing reflects a maturing market in Latin America. Customers are increasingly aware of the value of partnering with specialists who offer a complete package – covering everything from storage and handling to transportation and logistics. It’s not just about transferring responsibilities; it’s about engaging with partners who can improve overall efficiency, ensure compliance and support environmental commitments.

In addition, the changing dynamics of the market, including the increase in product variety, a consumer shift to fresh rather than canned goods, accessibility to advanced IT solutions, and the decreasing cost of automation, are reshaping the cold storage landscape. We are adapting to these changes, not just by storing products, but by offering dynamic and responsive cold chain solutions.

This is the new era of cold storage in Latin America – one in which companies are looking for partnerships that offer responsive, responsible and comprehensive cold chain management, going beyond traditional storage to cover a wide range of high-quality services.

Speculative investments in urban centers

There has been a notable increase in speculative investments in the cold storage sector, which is crucial for food logistics and is predominantly located in large urban centers. However, it is important to note that this sector is generally not ideal for speculative investment due to the high costs and specific market demands for temperature-controlled perishable food logistics.

Building a cold storage facility can cost approximately three times as much as building a dry warehouse. This significant cost difference stems from the need for advanced insulation, especially in the floor, specialized refrigeration systems, and complex layouts to maintain different temperature zones, all essential to preserving the quality and safety of perishable products.

Although these urban centers are attractive due to their high demand and dense population, potential investors should proceed with caution. The high initial investment and the need for specialized knowledge in handling perishable products under controlled temperatures make this market challenging for those seeking safer and more predictable returns. Given the substantial upfront costs, the cold storage market requires a thorough understanding of its unique operational challenges and a long-term commitment.

What do you think of the trends for 2024? They make it clear that we are witnessing a period of significant transformation and growth. The main trends we have pointed out not only highlight this landscape, which is constantly evolving in our industry, but also emphasize our commitment to innovation, efficiency and environmental responsibility.

The transformations we can expect for cold storage in 2024 reflect a dynamic and evolving industry. At Emergent Cold LatAm, we remain at the forefront of these changes, adapting our strategies and operations to meet these new challenges and opportunities. Our commitment to providing high-quality cold storage solutions is unwavering as we continue to navigate and shape the future of cold storage and logistics in Latin America.

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