There is no question that the pandemic made 2020 a very strange year. For the first time in recent history, wide swaths of the U.S. economy were shut down, as people hunkered down at home in an effort to keep from catching — or spreading — the COVID-19 virus. While most restaurants were closed for in-person dining, supermarkets and other food retailers were considered to be essential businesses and, as such, remained open during the lockdowns.
But they had to adapt quickly to this new scenario, as many shoppers did not want to shop in person for fear of picking up the virus from strangers. Instead, many chose to order their groceries online for curbside pickup, or else have them delivered to their homes. This led to food retailers adding refrigeration equipment and cold storage space in order to handle the influx of online orders and deliveries.
This was good news for HVACR contractors, who worked diligently to ensure their supermarket customers had all the refrigeration capacity they needed. Now that vaccines are being distributed, concerns about the transmission of COVID-19 will hopefully begin to recede, although lingering effects from the pandemic are likely to remain. These will likely lead to both challenges and opportunities for the commercial refrigeration industry this year.
A Year Of Change
It is difficult to speculate as to what the lingering effects of the pandemic may be; however, there are some areas where it may have permanently shifted the landscape, said Andre Patenaude, director, solutions integration, cold chain for Emerson Commercial & Residential Solutions.
OPPORTUNITIES AWAIT: The pandemic will change how the foodservice industry operates, which will bring opportunities for those who take advantage of them. Courtesy, Hoshizaki
“From a food retail perspective, the acceleration of e-commerce adoption has been a game-changer for our industry, as the pandemic drove many consumers to embrace both click-and-collect and home delivery options for the first time,” he said. “According to some estimates, the growth rate of online grocery retail is expected to comprise 21.5% of all grocery sales by 2025 — significantly higher than the pre-pandemic forecast of 13.5%. This is prompting many leading food retailers to rethink their refrigeration strategies and expand their fulfillment capabilities to meet both near- and long-term projections.”
Another change will be the increased focus on the cold chain that supports vaccine distribution, said Patenaude. Not only will vaccines need to be stored at proper temperatures, but their entire journey will need to be tracked, controlled, and monitored.
“The adoption of temperature tracking and monitoring technologies used for the vaccine cold chain will likely accelerate the integration of these tools within the food cold chain — from farm to fork,” he said. “It’s an opportunity to improve the working relationships, cooperation, and technologies among growers/producers, shippers, and retailers to create an unbroken chain of temperature certainty throughout the cold chain.” (See below.)
PRESSURE CHECK: A technician at Zero Zone checks pressures on a CO2 system in the company’s research and development lab. Courtesy, Zero Zone
Carl Petersen, marketing and advertising manager at Zero Zone Inc., believes that 2021 will be an interesting year — and one full of changes.
“With the end of the pandemic, we will see an increase in in-person grocery shopping, but online food shopping will continue, although not at the accelerated pace we have seen in 2020,” he said. “As an equipment and fixture vendor to the food industry, we will continue to see an upswing in display case and refrigeration system orders, as retailers are able to concentrate more on their main business and less on the constraints that the pandemic has necessitated. All that said, it will be well into the third or fourth quarters before a tangible change is evident.”
From Zero Zone’s perspective as a refrigeration equipment manufacturer, the post-pandemic recovery will provide relief for their production workers who will no longer have the additional stress and health uncertainty of continuing to work in-person to meet retailers’ needs, said Petersen.
“They are the unsung heroes of the essential work force who did not have the option of working from home,” he said. “We thank them for their very real service to the country.”
As for restaurants, Rod Johnson, director of consultant services at Hoshizaki America Inc., believes the pandemic will change how the foodservice industry operates, which will bring opportunities for those who take advantage of them.
“An opportunity will be in the drive through and delivery/takeout side of the business, which will need refrigerated and freezer storage,” he said. “Ghost kitchens — which are facilities where meals are prepared and cooked and then picked up by a delivery service — will be another opportunity for our industry, and they will become very popular.”
But there will be challenges, too, said Johnson, noting that equipment manufacturers may see a huge drop in demand for products overall, as a surge of used equipment makes its way back into the market. Demand for used equipment may be high, due to the decreased profits experienced by many restaurants, and there will likely be ample supply from restaurants that closed down during the pandemic and never reopened.
“I am optimistic about 2021 in the sense that it will be better than 2020,” he said. “But I believe it will take us to 2024 to get back to the numbers of 2019.”
The sheer volume of e-commerce sales definitely took many food retailers by surprise this year, said Patenaude. As a result, many have been forced to shore up their fulfillment capabilities, which may include in-house click-and-collect, micro-fulfillment centers (MFCs), or even dark stores.
“Because refrigeration is a key aspect of this effort, it has forced retailers to evaluate their existing systems to determine if there’s available capacity to potentially tap into,” he said. “In instances where there is not, distributed strategies such as stand-alone condensing units or self-contained cold storage are ideal solutions. Any new system designs or major retrofits will require more thorough consideration with respect to how these systems would align with their long-term sustainability goals.”
Patenaude noted that contractors will serve a key role in these decisions, and they must be prepared with the knowledge and expertise in order to advise on all the available short- and long-term refrigeration strategies. These can range from installing self-contained propane cases to full CO2 systems to more distributed equipment architectures.
Petersen agrees, noting that refrigeration contractors would be wise to take the time to increase their teams’ training on CO2 refrigeration systems. That’s because the new presidential administration will bring about regulatory changes that will most likely return to mandates that favor both natural and low-GWP synthetic refrigerants.
“CO2 is increasingly becoming one of the major refrigerants of choice, especially in light of the increasing number of states that are instituting more stringent regulations limiting traditional synthetic refrigerants,” he said. “CO2 systems are a safe bet because they are unlikely to be banned in the future due to their non-destructive environmental properties and lack of detrimental effect to the ozone layer. Installing and maintaining CO2 systems is not rocket science, but they do require care and training to handle the higher pressures correctly.”
For more information about the refrigerant transition in the commercial refrigeration market, check out part two of this article.
Technology Helps Drive Efficiency
Supermarkets have become one-stop shops for essential consumer needs — from freshly prepared and perishable foods to dry goods, pharmaceuticals, and mini health care clinics, said Andre Patenaude, director, solutions integration, Cold Chain for Emerson.
“As a result, retailers have a variety of data streams strictly related to temperatures that they need to manage and monitor in order to preserve food quality and safety and ensure proper vaccine storage,” he said. “In addition, they need to continuously track and monitor the performance of essential equipment and systems such as refrigeration, HVAC, and lighting.”
Fortunately, technological improvements and increased adoption of the internet of things (IoT) — combined with the emergence of 5G networks — are giving supermarkets the ability to capture, access, interpret, and analyze data to deliver higher-value facility management solutions, said Patenaude.
“From the perspectives of cold chain management, power management, equipment performance, and preventative maintenance, supermarkets are able to bring all these aspects together within one cloud and one view — and with robust data analytics to provide insights into each of these areas,” he said. “Emerson is continuing its investments to help our customers aggregate data, simplify access to these various information streams, and extract maximum value from them.”
This essentially allows food retailers to leverage IoT technologies in order to drive efficiencies across all aspects of their operations.