The UK frozen food market has grown significantly. If the trend is sustained cold store operators will come under pressure to adopt the same efficient order picking techniques in their cold stores as they do in ambient and chilled foods warehouses. This will be a daunting prospect for many cold store operators, says John Maguire, sales and marketing director of Narrow Aisle Flexi.
While the grocery retail sector has remained relatively buoyant throughout the recession, the nation's eating habits and food buying patterns have changed as consumers have sought to cope with the economic downturn.
One discernible trend has been the increase in sales of frozen foods. The UK frozen food market has been growing significantly since around December 2006 - a full year before the phrase 'credit crunch' had entered the global lexicon and is now worth an estimated 7.5 billion.
Various reasons are cited as driving the sector's turnaround. They include the return to business form of key brands in the market such as Birds Eye and Iceland as well as a change in consumer attitudes. For example, according to the BFFF the trade association that represents the frozen food industry there's mounting acceptance that frozen food represents a fresher, healthier and more nutritious option than some 'fresh' or 'chilled' produce. After all, the argument runs, freezing is in itself a preservative and (compared to chilled food) fewer chemicals and other preservatives are required to move frozen foodstuffs through the supply chain.
The frozen food industry also stresses that it generates less waste than other choices. At present a significant proportion of all chilled food fails to sell by its 'best before' or 'sell by' date. Unsold produce often goes to landfill and its disposal costs the food industry and the retail sector millions of pounds every year. By contrast, frozen foods have a much longer 'shelf life' and retailers and their suppliers can significantly reduce this high level of wastage by encouraging and sustaining a consumer swing away from chilled towards frozen products.
The growth in sales of frozen food is having repercussions for the cold chain the logistics sector.
Historically, frozen food's relative lack of customer appeal, has meant that the majority of frozen produce stored within cold storage facilities has been primary foodstuffs such as meat, vegetables, bread etc. A reasonably high percentage of these products have usually been stored and distributed as full pallet loads and there had been less demand for case quantity order picking and order assembly processes within Britain's cold stores.
The absence of a need for detailed case quantity order picking and the higher proportion of full pallet movements in and out of public cold stores has meant that the storage systems within these cold stores have tended to be designed for long term storage. As a result, drive-in pallet racking, powered mobile racking, double deep racking and even block stacking all feature prominently in traditional cold stores.
Now, however, as consumer demand for premium frozen food products from confectionery to pizza gathers pace, cold stores need to able to adopt the storage and picking methods of the chilled and dry grocery products sector. They are facing growing demand for greater and faster pallet selectivity, additional pick face replenishment activity and customer case quantity order assembly - much of which is often inefficient (or impossible) to achieve at a reasonable cost in traditional deep cold storage facilities.
My own company, Narrow Aisle, has a number of customers who specialise in cold storage and this need to deliver greater pallet selectivity and order assembly is changing the way many of them run their operations.
For instance, one of our clients a third party warehousing company stores frozen ready meals on behalf of one of the growing band of small businesses to have entered the sector recently. The firm is enjoying considerable success producing premium quality 'home-made' food in small batches, blast freezing it and selling it though delicatessens, farm shops and on-line outlets.
Traditionally the third party storage company had employed drive-in and powered mobile racking within its cold store: because in the past the average storage period was longer and the majority of movements in and out of the store had been full pallet loads, this type of storage method had always been perfectly adequate. However, the success of its frozen ready meal-producing client forced the storage company to reconfigure its cold store to allow individual case quantity customer orders to be assembled.
At first the company considered installing very narrow aisle trucks guided by either steel rails or inductive wires cut into the floor. However, the client decided against going down this route because, it was felt, that steel guide rails would limit access to key ground level picking locations. Furthermore, the proposed aisle dimensions were really too narrow for efficient low level order picking.
Eventually the company settled upon a combination of Flexi articulated trucks and low level order pickers. The Flexi does not require wire guidance or steel rails and therefore the aisle width could be set to suit the customer's order assembly profile. The lack of steel guide rails meant that the first rack beam could be set at two metres to allow fast case picking at ground level.
The public's perception of frozen food appears to be changing dramatically. It seems likely that if the trend is sustained and many industry watchers believe that it will be the grocery retail giants will be looking for their logistics partners adopt the same efficient order picking techniques in their cold stores as they do in dry and chilled foods warehouses. Faced with rising labour, electricity and maintenance costs, this will be a daunting prospect for many cold store operators, but for those who can adapt to the challenge and who can introduce added value services there are significant opportunities ahead.