Knowledge of supply chain offers domestic advantage

By MATEUSZ PERKOWSKI

Capital Press

The SnoTemp Cold Storage company is banking on the future growth of Oregon's food processing industry with a major expansion of its refrigerated warehouse facilities in Albany, Ore.

"It's really based on the strength of our customers," said Jason Lafferty, the company's general manager. "We're providing the infrastructure for their growth."

SnoTemp's existing 11 million cubic feet of warehouse space in Albany and Eugene, Ore., had been running at full capacity in recent years, forcing the company to turn away product, he said.

The new warehouse, expected to be up and running in July, will add about 2.4 million cubic feet of storage space to SnoTemp's capacity.

The facility's refrigeration engine room has also been designed to accommodate additional capacity, should the company decide to expand again.

SnoTemp undertook the project last year during the depth of the recession, largely because it expects demand from local processors of fruits, vegetables, dairy and seafood to increase in the years to come.

"This is a long-term investment," Lafferty said.

Dave Zepponi, president of the Northwest Food Processors Association, said the industry has generally weathered the recession well, though results vary from company to company.

"There have been winners and losers in the economic downturn," Zepponi said.

Companies focused on higher-end buyers, such as upscale restaurants, have been hit harder than those geared toward price-conscious grocery customers, he said.

The outlook for the industry is positive due to the recent emphasis on food safety -- an area where U.S. producers have an advantage over foreign competitors, Zepponi said.

"Knowing your supply is becoming critically important, especially now," he said. "It's becoming a populist issue."

The development of cold storage infrastructure is important for the industry's success, because it allows processors to save money on building or expanding their own warehouses, Zepponi said.

"The uniqueness of the Northwest is we have very innovative processors, especially small and medium enterprises that need this external capacity," he said. "Their capital investment is reduced, which allows these companies to grow."

The West Coast has a robust cold storage system. More than 20 percent of the country's total 3.8 billion cubic foot general warehouse capacity is in Oregon, Washington and California, according to the National Agricultural Statistics Service.

Companies like SnoTemp improve the system's overall efficiency, since they allow product from multiple companies to be stored at central locations -- thus improving transportation logistics, Zepponi said.

"You can consolidate so you reduce your greenhouse gases," he said.

SnoTemp's Albany facilities are well-positioned near local processors and the Interstate 5 corridor, but freight can move in and out quickly due to the rural and industrial surroundings, Lafferty said.

"We don't have the urban constraints that some other locations have," he said.

The firm's new warehouse has insulation that's roughly 60 percent thicker than the industry standard. Its refrigeration system runs on variable drives that match motor speed to cooling requirements, preventing them from running more than necessary.

These and other energy-saving measures reduce the warehouse's electricity use by about 50 percent compared to a standard facility, which should provide SnoTemp a return on the added investment within about five years, Lafferty said.

"The kilowatts we're saving on an annual basis is the equivalent of about 150 homes," he said.

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