Cold storage industry leaders know that energy consumption is one of the top operating costs for any facility.
The constant, 24/7 round-the-clock need for electricity is the core issue here. As energy costs continue to rise, businesses have to increase prices, making it difficult to stay a top competitor in this field.
If facility owners are to thrive in this industry, they must pay attention to the trends that are happening right in front of them.
There are several businesses meeting the demand for sustainable supply chain solutions, investing in sustainable technologies, and embracing ESG initiatives to stand out.
Meeting the Demand for Sustainable Supply Chain Solutions
When COVID-19 pandemic hit, there was a surge in online grocery sales, medicines, and vaccines that needed to be properly stored. This caused a shift in how many industries like cold storage do business.
Cold storage demand skyrocketed in 2020 and it continues to rise to this day. In 2022, frozen food sales had a 34% increase since 2019, at $72.2 billion, and has also grown at a CAGR of 2.3% over the past five years.
The cold storage industry plays a big role in the supply chain, mainly in ensuing perishable goods maintain a consistent, controlled temperature and quality throughout their journey from production to delivery.
Frozen good freshness requires planning, investments in specialized infrastructure, and a commitment to maintaining these strict temperature controls.
The increasing demand for cold storage necessitates the development of a strong cold supply chain that is capable of adapting to any changes, while also meeting the consumer's needs.
Aged and traditional supply chain models need a makeover that integrates new technologies and strategies.
One company's scope 2 emissions can significantly contribute to another company's scope 1 and 3 emissions along the supply chain. Companies with high scope 2 emissions are taking steps to reduce their environmental impact to stay competitive in the market as more companies demand cutting scope 2 or 3 emissions.
The top three players in the industry are taking steps to meet their ESG Goals
The top cold chain logistics companies in the United States are Americold Logistics, Lineage Logistics, and United States Cold Storage (USCS).
These companies have a commitment to practicing ESG and are strategically making investments toward their future, which is evident as to why they are considered to be industry giants.
Americold Logistics
“Our comprehensive environmental, social, and governance (ESG) strategy focuses on three areas: promoting energy excellence through innovation and new technology adoption, investing in our associates, and giving back to our communities.” - George Chappelle, Chief Executive Officer of Americold.
According to their 2022 ESG Report, they have spent more than $3.6 million in sustainability investments across their portfolio of temperature-controlled facilities.
Focusing on the environmental section of their ESG objectives, here is what Americold Logistics is implementing in its strategy:
Greenhouse Gas (GHC) Emissions
- The company submitted a letter establishing its intent to set science-based targets.
- Americold plans on installing 100% energy-efficient lighting across its global portfolio by 2030.
- Enroll all eligible facilities in the GCCA Energy Excellence program and claim gold status by 2030.
- Evaluate all properties against the Energy Star Portfolio Manager, aiming to certify all eligible properties by 2025.
Renewable Energy
- Install 150,000 MWh (annually) of solar energy for their global portfolio by 2030.
Waste Reduction
- Minimize waste in the farm-to-table journey by preserving food quality and security.
Lineage Logistics
Lineage Logistics proudly wears its commitment to renewable energy as a part of it’s ESG strategy.
“Solar energy resources help power Lineage facilities in eight different countries, and expanding access to solar power resources throughout the network is a key element of our efforts to reach our goal of net-zero emissions by 2040. Its ability to provide power for large facilities and to handle substantial electric loads pair well with our business infrastructure and energy needs. At some of our sites, solar panels are capable of producing two to three times the entire building’s electricity load at peak afternoon power production times.”- Lineage Logistics 2022 Sustainability Report
- The company has approximately 108 MW of solar generating capacity on-site at their US facilities.
- According to the “2022 Solar Means Business Report” from the Solar Energy Industry Association, Lineage is the fifth largest corporate user of installed, onsite solar capacity.
- Lineage Logistics has been recognized by the US Department of Energy for its energy efficiency efforts on multiple occasions.
United States Cold Storage
United States Cold Storage may be ranked #3, but not by far! They take their sustainability and ESG efforts very seriously, and it shows in their ranking.
“United States Cold Storage is committed to the environment and its well-being. Sustainable development is achieved through state-of-the-art warehouse design and construction, the use of eco-friendly refrigeration technology, and through utilization of energy efficient materials and technologies. We’ll continue to responsibly manage resources to meet the evolving requirements of the communities we serve – our customers, our employees, and our industry.” - Mike Lynch, VP, Engineering
- USCS set a goal of reducing its greenhouse gas (GHG) emissions by 50% by 2030.
- USCS has already reduced its GHG emissions by 12% since 2015.
- The company has installed solar panels at over 100 of its facilities, and it is planning to install additional solar panels in the future.
- Renewable energy production currently provides 1.5% of USCS’ total electricity requirements.
Making your business appealing to investors
The three competitors mentioned above are setting the bar for other cold storage facilities. They’re enhancing their businesses by embracing their ESG initiatives and implementing sustainable solutions to improve their facilities.
The actions of these companies are catching the eyes of investors, who are seeking opportunities to invest in companies that prioritize ESG factors.
Attracting investors is crucial for businesses to secure funding for growth, gain expertise, enhance credibility, build networks, and validate a business model.
It strengthens the prospect of securing future funding, facilitates strategic collaborations, and provides access to a pool of qualified talent and resources that support business growth.
Conclusion
Americold Logistics, Lineage Logistics, and United States Cold Storage, are leading the way by investing in renewable energy, reducing greenhouse gas emissions, and implementing energy-efficient technologies.
Their commitment to sustainability is setting the bar for other cold storage facilities and demonstrating that it is possible to operate a profitable business while also being environmentally responsible.
Is your business ready to join this group of elite pioneers? Connect with us and discover your path to clean energy.
Sources
- https://onelineage.com/news-stories/lineage-logistics-recognize
- https://483539.fs1.hubspotusercontent-na1.net/hubfs/483539
- https://www.hopstack.io/blog/top-cold-chain-companies-us
- https://www.cnbc.com/2023/03/09/we-spend-billions-on-frozen
- https://www.hillphoenix.com/the-rise-in-demand-for-cold-storage
- https://www.gcca.org/wp-content/uploads/2023/04/FINAL-0791_GCC
- https://www.linkedin.com/pulse/esg-investor-appeal-what-startups-should
