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Saturday, April 13, 2024

Cold Chain Report 2022

The UK’s cold chain continues to grow to meet the changing demands of consumers despite the challenges of high energy costs and the growing need to be more energy efficient and sustainable, writes Tom Southall

Following the great shake up experienced by the UK’s food manufacture and supply chains over the past three years, the cold chain is in an extended period of significant change. Alongside the impacts of changing consumer demands for food during the pandemic and Brexit cliff edges which brought a cycle of stockpiling and shifting trade patterns, businesses in the cold chain are also navigating the challenges of labour shortages, sky high energy costs and the transition towards a net zero economy.

Pre-Covid and pre-Brexit, the temperature-controlled storage and distribution industry in the UK had already started a period of transformation fuelled by historic under investment and growing demand and the past three years have served to accelerate the evolutions that were already underway as well as introducing new challenges.

Up-to-date quantitative information on cold storage and temperature-controlled distribution is crucial to understanding exactly what is changing in our industry, and what that means for businesses in the cold chain and for our partners across the food supply chain. To this end, in July the Cold Chain Federation published The Cold Chain Report 2022, setting out data relating to a whole raft of areas including where in the UK cold chain facilities are located; the numbers of trailers and Transport Refrigeration Units (TRUs) our members are operating; progress against environmental targets; and the sizes, ages and capacity of UK cold stores.

Several of the datasets are particularly revealing when we consider how temperature-controlled storage and distribution is changing, and what that means for our industry’s direction for the future.

New analysis in the report shows that electricity spend for the UK’s cold storage facilities is forecast to at least double between 2021 and 2022, growing from £560.6 million in 2021 to an estimated £1.1 billion for 2022. With energy prices rocketing, the cost of refrigerating cold storage facilities has soared despite the strong progress made over the past decade on the road towards energy efficiency.

There’s no expectation of a quick resolution to energy prices: our industry’s efforts on energy efficiency have never been more urgent and we welcome discussion with our manufacturing and retailing partners in the food supply chain about how we can work together to increase efficiency to reduce emissions and costs.

There is a similar picture regarding fuel costs for temperature-controlled distribution operators. The rising cost of full duty diesel alone means major increases in fuel costs to run TRUs, and this is in addition to the ending of the red diesel exemption for TRUs in April 2022 which sees cold chain hauliers paying more than double to power the tens of thousands of fridges that our food supply chain relies on to keep food safe, ensure quality and prevent waste. We are calling on Government to provide proper support for the trial and uptake of alternatives to diesel powered TRUs, currently the UK risks falling behind other countries where infrastructure grants are bridging the affordability gap and driving uptake of emission free technology.

There is a more positive story within the report which shows the UK cold storage capacity of Cold Chain Federation members now tops 40 million cubic metres, the equivalent to the bowl volume of 35 Wembley Stadiums. This represents a 10 percent increase in capacity in a year (up from 36 million cubic metres last year), reflecting our industry’s investment in building new cold stores and expanding existing facilities as well as our growth as a Federation. Major new sites include the SeaFast Mega Distribution Centre in Felixstowe, the Lineage Superhub at Peterborough (below) and NewCold’s new fully automated cold store which is nearing completion at Corby.

Over the past decade significant foreign, private equity backed investment has been driving growth and consolidation in the cold storage market. The past three years has continued the trend of investment in pioneering new buildings and facilities designed for our industry’s future, making use of new technologies such as automation and renewable energy and new approaches to improving efficiency, increasing productivity and minimising environmental impact.

There has been very high demand for cold storage over the past few years and this level of expansion in cold chain storage is great news for our food supply chain partners looking to secure space. It is good news too for consumers who will benefit from increased resilience in the food supply chain, for the UK economy, and for the cold chain industry as we turn towards the future.

The data in the Cold Chain Report 2022 also demonstrates the aforementioned progress that cold storage facilities have made in terms of energy efficiency. The operators that are signed up to our cold storage Climate Change Agreement have collectively smashed the targets set by the Government over the last 10 years to improve the energy efficiency of their cold stores in the past decade. The improvement is particularly important whilst the Government decides whether the use of energy efficiency targets and related tax incentives will play a role in the next phase of industrial decarbonisation and the path to net zero. The Federation is leading the way to a sustainable future for cold chain through our Net Zero Project, publications on the future of cold storage and emission free transport refrigeration are available on our website.

As the industry’s voice we are committed to researching, gathering and analysing data that serves and informs our industry and our customers. We are committed to working with our members and other industry leaders to continue to add useful new datasets to future annual revisions of The Cold Chain Report 2022.

Find The Cold Chain Report 2022 at https://www.coldchainfederation.org.uk/insight/


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