What factors drive cold storage construction costs?

The COVID-19 crisis has caused many manufacturers, supply chain operatives and retailers to re-examine their cold storage needs. As a result, we have seen a growing trend to increase capacity to keep up with a surge in consumer demand and a rise in e-commerce shopping habits.

A cold storage project requires an initial feasibility study, which includes an estimated final cost. This is especially important to company owners right now, as the industry looks to tighten its purse strings.

However, the construction process is complex and the maintenance of a temperature-controlled environment involves many disparate systems working together in unison.

So – while the only way to know specific project costs for sure is by seeking advice from experts like Ambrey Baker – here are some of the key cost factors associated with cold storage construction:

1. Acquiring the right equipment

Depending on various elements, including the purpose of your space and its size according to square footage, acquiring the best equipment for the project is likely to command a large proportion of your budget.

Equipment can range from powerful HVAC systems, responsible for generating cold air; to walk-in freezer rooms that store stock; or loading bays with dock shelters.

When searching for the best equipment to use in a new build or fit-out, it can be useful to conduct a cost-benefit analysis. For example, a cheaper option may seem more appealing, but investing in a high-quality HVAC system that needs very little in the way of ongoing maintenance will eventually ‘pay for itself’ over time.

2. Investing in insulation

Once a chilled or refrigerated space becomes cold, it needs to stay this way. Cold storage units that have either been poorly-insulated, or have corroded over time, will bleed air.

This can lead to a number of issues including equipment needing to work a lot harder than it was designed to, and perishables – with a relatively short shelf life – ripening early, withering or spoiling. Either way, your finances will take a hit.

Robust and reliable insulation is imperative to the performance of equipment and the overall outcome to the business. There are many different types of insulative material to choose from, including types that may be flammable or harmful to the environment, so make sure you consult expert advice. 

3. Anticipating the energy usage

One of the biggest ongoing expenses for facility operators, both in the construction phase and beyond, is power consumption.

With lighting, refrigeration equipment and a number of HVAC systems constantly in operation, your business’s utility bill will quickly mount up. That’s before factoring in other components of cold rooms, including automatic doors, fire suppression tools and monitoring or security systems.

It is possible to reduce this cost through harnessing emerging technologies. Aside from insulation, consider next-generation compressors, plastic strip curtains otherwise known as sealings, LED lighting and real-time energy management systems. Initially, these will be added expenses; but, in the long-term, they could save your organisation vast expenditure.

These three overarching factors, along with other elements bespoke to specific projects, such as materials and methods of construction, play key roles in determining cost.

However, the most important spend of all is the contractor you choose to partner. Bringing construction experts on board who take the time to understand your cold storage vision and have the in-house know-how to implement it in line with budgets and time – you’ll see the best return on investment possible.

For more information on our cold storage expertise, visit our web page.