Cold storage development is entering a modernization cycle, and the shift is about far more than square footage. At CREDA’s I.CON Cold Storage this week, Michael Cody, practice leader and director of industrial cold and food at Ware Malcomb, and Chris Hilgeman, senior vice president at Evans General Contractors, walked attendees through what’s driving investment in automated cold-chain facilities, and what developers need to plan for now rather than retrofit later.
A market still in its infancy
The global cold storage market, valued at $188.8 billion in 2025, is projected to reach $462.6 billion by 2035. But the real story is where the growth is concentrated. Spending on automation technology is compounding at roughly 15% annually, more than 1.5 times the pace of the broader cold storage market, Cody shared.
“I think we’re still in the infancy of what automation can do for these cold storage buildings,” he said. “It’s going to take a while for people to really understand the costs and the benefits and the implementation of a lot of the technology,” Hilgeman agreed. “Somebody out there is going to be a pioneer and hopefully they do well with it.”
Labor scarcity is the real driver
Both speakers pointed to labor as the underlying force behind automation adoption. Sub-zero environments have brutal turnover; as Cody put it, “You’re replacing somebody every six months,” and even a modest wage premium doesn’t change the reality: “$1.50 an hour extra to work in -10 degrees Fahrenheit, it doesn’t really move the needle once you’re there for a while. It’s tough.”
Hilgeman pointed out that data center construction has also started to compete for the same labor pool. “The labor costs, the labor demands in that world are driving subcontractors out of our traditional markets,” he said, noting that a forklift operator working in a freezer “can go work as a helper for a pipe fitter or an electrician to make two or three times the money” on data center projects.
Day-one design decisions
Both Cody and Hilgeman made it clear that automation infrastructure has to be planned into the building from the start. Adding an Automated Storage and Retrieval (ASRS) system alone adds four to six months of design time and roughly a year of implementation – meaning a building can reach the market and still be a year away from being automated.
“If you think you’re going to potentially be doing [Very Narrow Aisle (VNA)] and that AS/RS stuff, if we don’t address that in day one, you’re going to be stuck as far as what you can do going forward,” said Hilgeman. Clear heights, floor loading, slab tolerances and power infrastructure all need to be locked in before breaking ground.
Power has also become a growing constraint. High-density power demand in cold storage already exceeds dry storage, and automation will only add to it. Hilgeman estimated power needs could increase up to 50% – changing how facilities are designed and powered, including a growing interest in on-site generation and fuel cells where utility power can’t be delivered fast enough.
Digital infrastructure is no longer optional
IoT sensors, digital twins, AI-driven inventory, and integrated trailer, yard and warehouse management systems are converging into what the speakers described as “a single operating layer.” Cody pointed to a real-world example: a facility built for a regional restaurant chain where dock-door scanners track product from the freezer to the trailer to the point of sale – eliminating manual inventory counts entirely. “So nobody’s back in the freezer counting nuggets anymore,” he laughed.
“We’re not far off from driverless trucks,” Cody added, and said that trailer management, yard management and warehouse management systems will increasingly talk to one another directly.
The takeaway for cold storage developers? Build automation-ready envelopes now, treat refrigerant strategy as a proactive decision rather than a regulatory reaction, and underwrite the power and digital infrastructure that today’s tenants – and tomorrow’s – will expect.
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