Cold storage is heating up in Canada. Can operators capitalize?

Our recent blog on frozen food showed how consumer preferences and trade are reshaping Canada’s frozen-food market. Those products, along with meat, seafood, dairy and fresh produce, depend on temperature-controlled infrastructure. In this report, we look at Canada’s cold storage operators and how they can capitalize on increasing demand for their services.

Demand for cold storage is strong

Cold storage demand is driven by the volume and mix of food moving through Canada’s food system. Domestic production, food processing and international trade all influence how much product may require refrigerated or frozen storage.

Indeed, the production of Canadian food products that require refrigeration continues to grow. In 2025, vegetable production increased 8.0% to roughly 2.6 billion kilograms, poultry production rose 0.7% to 1.6 billion kilograms and hog slaughter increased 2.0%. The expansion of the food-processing industry also creates demand for refrigerated storage, distribution and specialized logistics services. Frozen food manufacturing, which covers establishments that primarily make frozen fruits and vegetables, as well as frozen dinners and side dishes of several ingredients (except seafood), illustrates this trend. Revenue from the industry rose from $5.4 billion in 2020 to $8.0 billion in 2024, an increase of roughly 48%.

Demand for refrigerated storage from exporters has also grown strongly. We estimate that this year will see a more than 30% increase from 2020 levels for exports of frozen fruit and vegetable preparations, fresh or chilled vegetables and fresh or chilled meat (Table 1). Growth has, however, eased recently. Compared with 2025, export volumes in 2026 are expected to be broadly stable for frozen fruit and vegetable preparations, fresh or chilled vegetables and fresh or chilled meat, while seafood exports are set to rise sharply (fresh or chilled up 16%, frozen up 18%).

Table 1: Canadian export volumes of selected temperature-sensitive foods have risen over the last six years

Export growth has also been uneven across products and destinations and increasingly tied to the U.S. market. Between 2020 and 2026, frozen fruit and vegetable preparations recorded the strongest gain, with export volumes up 37.2% (roughly 415,000 tonnes). This category now represents 52.8% of frozen-food export volumes, at an estimated 1.53 million tonnes in 2026. Overall, the U.S. share of Canadian frozen-food export volumes rose from 50.3% in 2020 to 62.5% in 2026, an increase of 12.2 percentage points. The pattern differs by product, however. Frozen vegetables remain heavily dependent on the U.S., which took about 99.6% of export volumes in 2026. Frozen fruit shipments to Japan, China and the Netherlands have grown since 2020, while shipments to the U.S. have declined.

At the retail level, strong consumer demand for refrigerated products also bodes well for cold storage demand. Between 2019 and 2025, frozen-food retail sales increased 63%, substantially outpacing the 39% increase recorded for fresh food.

Taken together, production, trade and retail data point to solid growth opportunities for cold storage. Cold storage operators have been expanding capacity to meet that demand.

Cold storage investment is expanding across Canada

Among three major Canadian operators, reported refrigerated storage capacity rose from 159 million cubic feet in 2023 to 203 million in 2026, an increase of approximately 27% (Figure 1). That, of course, does not capture the entire Canadian market but illustrates the scale of expansion among operators with comparable historical data.

Figure 1: Refrigerated storage capacity among three major Canadian operators, 2023–2026

Sources: Global Cold Chain Alliance, FCC Economics

And capacity is set to increase further based on reports of new facilities and expansions across the country. Two projects in Atlantic Canada and Quebec alone represent more than $100 million in total investment and include a new 190,000-square-foot cold storage facility with 22,000 pallet positions, as well as additional refrigerated and frozen warehouse space.

More capacity creates room for Canada’s food sector to grow. But new facilities need enough products to move through them, at a manageable cost, to justify the investment. That puts the focus on what will determine whether operators can turn new capacity into profit.

What will drive the profitability of cold storage operators

One key factor is the ability to track demand by segment, which is crucial to maximizing revenues. An operator could have available space overall while facing strong demand for one temperature range (e.g., frozen, chilled or ambient) and weaker demand for another. Adding capacity in the wrong configuration or location could therefore leave some space underused even when overall demand for cold storage is growing. Another key factor is the ability of operators to diversify revenues beyond storage. Handling, blast freezing, repacking and other value-added services can generate income from the same space, and customers are increasingly asking for them as retailers and processors outsource more of their distribution. Scale matters, however, and smaller operators may find it harder to invest in these services.

Transportation also shapes how well new capacity will be used. With the U.S. taking a growing share of frozen-food exports, cross-border trucking remains central, while growing frozen fruit shipments to Japan, China and the Netherlands may put more weight on ports. For operators, proximity to processing clusters, highways and ports can therefore be part of the case for new capacity.

Managing costs is, of course, also crucial. Energy is one of the largest and most volatile costs for cold storage operators, since refrigeration runs around the clock. Canadian electricity selling prices peaked in April and, although they have eased since, remain 4% above their February level and about 36% above their 2014 level. Keeping the energy bill as low as possible, via investments to improve efficiencies in refrigeration, lighting, insulation and operations, will support profitability. Energy-management systems can also identify inefficient equipment, temperature fluctuations and maintenance needs. These investments can reduce operating costs while maintaining reliable temperature control and product quality.

There are other operating expenses to contend with. According to Innovation, Science and Economic Development Canada’s 2024 financial-performance data for small and medium-sized refrigerated warehousing and storage, indirect operating expenses averaged 73.9% of revenue. Labour and commissions, at 19.0%, and rent, at 13.9%, were the largest of the categories shown (Figure 2).

Figure 2: Selected operating expenses of Canadian small and medium-sized refrigerated warehousing businesses, 2024 (% of revenue)

Note: Selected expense categories are expressed as a percentage of revenue and should not be interpreted as a complete breakdown of indirect operating expenses.

Sources: Innovation, Science and Economic Development Canada, FCC Economics

Here too, investment in productivity-enhancing technology can help contain operating costs. Recent Canadian projects illustrate the scale of these investments, including an automated refrigerated distribution centre in Quebec worth more than $240 million and a $222 million cold storage facility in Alberta featuring high-bay automated storage, retrieval and material-handling systems. Automated storage systems can reduce handling requirements and therefore labour needs, while warehouse-management systems and real-time temperature monitoring can improve inventory control and traceability.

Bottom line

Canada’s cold storage capacity is expanding as production, trade and food processing create new opportunities for refrigerated warehousing. But turning those opportunities into profit will require action on both costs and revenues. On the cost side, productivity-enhancing technologies can help address many of the challenges. On the revenue side, operators will need to minimize unused capacity, diversify income sources and locate new capacity near products and transport links.

Ulrich Zombre

Senior Economist

Ulrich leads development of the FCC Food and Beverage Report and delivers a range of analyses tailored to the evolving needs of the sector. With more than 15 years of career experience, he’s worked in areas such as food and beverage, fruit and vegetable production, and value chains.

Before joining FCC in 2026, Ulrich worked at Natural Resources Canada and the Quebec Ministry of Agriculture, Fisheries and Food, where he led research on the food processing sector. He also served as a public policy consultant to the World Bank. Ulrich holds a PhD in economics from L’Institut Agro Montpellier.