A never-ending success story
NewCold’s aspirations are to set up a comprehensive network of cold stores across Europe and improve the connectivity between its customers and major retailers. Meanwhile, the company is trying to modernise the industry in America by introducing innovative concepts to its facilities there
Only six years were needed by NewCold for the cold storage and logistics specialist to establish a worldwide presence. Founded in 2012, the Dutch-based company has now designed and built facilities in Germany, France, the UK, and Poland in Europe, as well as in the USA and Australia, with plans for further sites in these and other locations already underway.
“Our business model involves us finding one or two customers first, which we call ‘anchor customers’, that justify the development of a new large-scale project in the given area,” explains NewCold’s Vice President Business Development, Piet Meijs. “In the first months of our existence, we managed to buy a facility in Argentan (France) and started constructing our first site in Rheine (Germany), which opened in May 2013. Keeping in line with our customers’ needs, we then developed the first phase of our UK storage and distribution centre in Wakefield. At about the same time, we also did a project in Kutno (Poland).”
NewCold’s maiden venture outside of Europe was initiated when the company’s key UK customer acquired a business in Australia and invited NewCold to look after its logistics and supply chain in the Melbourne region. “At first, the scale of the operation was not sufficient to suit our business model, but with the help of Peters Ice Cream, we found two other potential customers, which created the volume to justify the investment in a cold store,” Piet remembers.
Getting together with one of these two customers – Fonterra, opened a new door for the company, as it was asked to construct an extra chilled storage warehouse in the vicinity of the cold store it was already building. “In parallel, we signed our first contract in the US – a 15-year agreement with Trident Seafoods, which led to the development of our first cold store in America, in Tacoma.”
In April 2018, NewCold completed the expansion of its Wakefield warehouse, increasing the facility’s capacity from 55,000 to 143,000 pallets, and turning it into the largest in the UK. Piet details: “We began work on the first phase of this facility early in 2014, when Froneri approached us with their idea to consolidate their volumes in one central cold store that is well-positioned to serve their retail customers. The project was delivered in May 2015 and proved such a resounding success that we started receiving enquiries from other frozen food producers. This led us to conclude that extending the site was not just an excellent opportunity, but also a necessity of a kind. We added ten new stacker cranes to the six we were already operating and we have now come to the final version of this facility.
“We have already started thinking about building a second cold store in the UK. Our intention is to locate it closer to London and it seems very likely that next year we will enter serious conversations with our customers and get to work on our planning application,” he reveals. “Admittedly, there has been a bit of Brexit-related hesitation regarding this investment, but the present signs are that more production will move to the UK, which will probably create more requirements for increased storage capacity. In fact, suppliers that export into the country have got in touch recently, enquiring about the possibility of using our Wakefield store to ensure that they have some stock available, should shipping from Europe to the UK become more complicated.”
On the other side of the Atlantic, the company is in the process of building its second cold storage facility in Burley, Idaho, which is expected to open in April 2019. “It will be in close proximity to McCain’s largest production plant in the US. Due to its expansion, the company needs additional storage space, which we are going to provide,” Piet discusses. “The site is designed to host 90,000 pallets and will be fully mechanised, like all of our facilities. We will introduce a shuttle connection with McCain’s production facility and build automatic loading systems there, so we can load 26 pallets at a time, which a trailer will then take to our site and unload automatically.
“What might be quite interesting to the readers is that the US is rather less developed in this type of supply chain solutions, in comparison with Europe. For example, the pallet quality is not at the same level, which propelled us to introduce system boards in our Tacoma facility to manage the pallets more easily. In a way, we are seen as innovators who have introduced various types of automation solutions to our American counterparts. Even our local competitors have started to copy our supply chain models and place emphasis on automation,” he maintains. “Up until four or five years ago, the US industry was very sceptical at any suggestions for automation, but the calls for modernisation of America’s antiquated cold stores are getting louder, with sustainability being prioritised.”
Back on European terrain, NewCold is faced with the consolidation of the industry on all levels. “There is a lot more pressure on delivery times, as retailers request more frequent deliveries,” Piet observes. “To give you an example, McCain used to be shipping full trucks to their customers several times a week. At one point, however, retailers required that products are supplied every day, because they wanted to reduce their inventory. This posed a challenge for McCain with regards to maintaining the cost efficiency of the operation. Thanks to our store in Wakefield, which acts as a central warehouse, we are able to deliver multiple goods for multiple customers to multiple retailers, thus ensuring the continued efficiency of the activity.
“Similarly, consolidation is taking place on the producers’ side and the recent acquisition of Aunt Bessie’s by Nomad Foods affirms this trend. As a result, we expect to see fewer, but bigger production facilities, which will encourage us to engage in large-scale operations ourselves.”
In order to facilitate its customers’ connection with their retailers, NewCold is looking to expand aggressively in Europe in the next three to five years and create a veritable network of facilities across the continent. “Together with the aforementioned new store in the UK, we intend to develop two new projects in France and another one in Germany. Italy is another country we are keeping an eye on,” Piet states. “We would like to have between ten and 12 operational sites in Europe where we can offer our clients warehouse interconnection services to streamline their supply chains and get them closer to the market. As far as our presence in America is concerned, we are more modest in our ambitions, because of the magnitude of the market there. If we can complete a couple of projects in the coming years and build a solid base, that would be a tremendous achievement, which will position us better for a potential long-term growth,” he concludes