When it comes to warehousing for cold food organics, gluten-free and/or plant-based foods, there are certain design features companies should keep in mind when either building new or expanding an existing manufacturing facility.
Food Logistics sits down with Travis Frank, senior associate and logistics practice lead for NorthFind Management, to discuss warehouse technologies, processing guidelines, innovation in cold storage and what this all means for the future of warehousing.
Food Logistics: When it comes to warehousing for cold food organics, gluten-free and/or plant-based foods, what are some design features companies should keep in mind when either building new or expanding an existing manufacturing facility?
Travis Frank: Efficiency and scalability in the layout is always my first consideration. The layout must support future growth, meaning each pick, case pick vs. pallet pick locations with proper temperature control in place. Travel time is an efficiency killer in warehousing and needs to be a top consideration during new builds and expansion projects.
Food Logistics: Name some guidelines cold food processors need to follow in order to produce safe and certified-organic/plant-based products?
Frank: I feel the basics are critical. A food safety plan needs to be established to show and identify the hazards and how the hazards are being controlled. A temperature monitoring system is also critical to ensure the product is not put at risk throughout the manufacturing and distribution process. Organics also require a third-party approval/certification, which varies by geography and jurisdiction.
Food Logistics: Detail some warehouse technologies on the market designed protect product, maintain temperature, reduce labor and more in warehousing of organic/plant-based foods?
Frank: We are seeing a lot of innovation in cold storage. Cold storage is rapidly growing in demand, and unique products are being introduced to support the growth. Automation is one key area I am seeing solutions, which have good ROI to support businesses of various sizes.
Food Logistics: The plant-based food market is expected to grow at a CAGR of 11.9% from 2020 to 2027 to reach $74.2 billion by 2027. To what do you attribute this growth to?
Frank: I believe society is continuously growing in health awareness and working to improve their diets. Sustainability is also a growing conversation across various demographics. I believe these attributes are driving the market growth.
Food Logistics: What is the future for organic/plant-based foods/beverages?
Frank: Plant-based foods is a rapidly growing market. While cost to produce and maintain are initially higher, I feel that as the growth is realized, the cost will come down, which in turn will drive more margin or reduce cost to the consumer, thus increasing the growth of this category.
Food Logistics: What does this mean for the future of warehousing?
Frank: Cold storage warehousing has always been in high demand. Many companies have traditionally chosen to outsource cold storage due to the high cost of construction and maintenance. I would expect to see companies bring some of this in-house, but I would also project that the third-party cold storage warehouses will continue to see high demand for the coming years.
Food Logistics: What are some things not addressed above that may be pertinent to our readers?
Frank: Though not specific to organics, strategic inventory segmentation can unlock cashflow and value and optimize service levels to customers. The idea that all products should be managed using the same methodology is outdated and suboptimal. An item’s velocity in the warehouse is different from a SKU’s contribution to gross sales. This a key concept sometimes overlooked when analyzing distribution layouts regarding space, growth, etc. Understanding the strategic value of SKUs and their unique demand characteristics allows companies to employ a Plan For Every Part strategy, which will increase inventory velocity and optimize value.