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Research - JANUARY 11, 2021

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Cold storage to benefit from shift toward online grocery shopping

by Loretta Clodfelter

Cold storage is one subsector of industrial that looks to have a confluence of positive effects. The pandemic has encouraged a shift toward online grocery shopping. In addition, at least some of the vaccines for COVID-19 will require careful temperature controls.

“We believe that cold-storage real estate should perform well as a result of the rise in online grocery demand from consumers,” said Jim Koman, CEO of ElmTree Funds. “This shift in consumer grocery preferences is pushing grocers to retool their supply chains. Even prior to the pandemic, online grocery sales were experiencing strong growth, but the pandemic has caused even more consumers to buy food online.”

Koman noted food and beverage ecommerce sales in third quarter 2020 rose 162 percent from the year prior. “We believe this spike in demand for online groceries will lead retailers to pick up more of a last-mile approach to how they deliver food, driving demand for cold-storage space,” said Koman

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