Cold storage scarcity and off-site costs are squeezing food and beverage
Food and beverage manufacturers are running into a warehouse space crunch as production grows and storage spreads across multiple locations. In Australia, cold storage vacancy stood at about 0.6% in 2025, compared with around 3% across the broader industrial market, according to Swisslog Australia and New Zealand.
Swisslog says the problem builds over years of incremental growth. Production areas usually take priority because they generate revenue, while warehousing gets the remaining space or moves off-site. As a result, storage can end up split across different parts of a site and across buildings of different ages.
Geography can make expansion harder. Swisslog says many long-established food and beverage plants are tied to towns, water sources, ports or the communities where the business began, which can limit any outward expansion.
When on-site room runs out, many operators turn to third-party logistics. However, Swisslog says those costs are often higher than they first appear because storage rates do not include every fee.
A 2025 uTenant survey cited by Swisslog put Australian ambient pallet storage at about $18-24 per pallet per month nationally. In Sydney, the typical rate was around $32 per pallet per month. Cold storage cost more, averaging about $40-72 per pallet per month.
Those charges can rise further. Swisslog says many providers add separate fees for receiving, pallet movements and handling, while short-term seasonal storage can attract another premium.
Automation lifts capacity on existing sites
Swisslog argues automation can help manufacturers avoid opening a new site. The company says automated storage systems can use 90% or more of a building’s available height, compared with about 30% for block stacking and about 60% for conventional racking.
Using more vertical space can sharply increase capacity within the same footprint. Swisslog says that approach can deliver about 300% more storage capacity than conventional block stacking or racking.
The company says it offers three automation technologies for different building types. It also cited one snack food manufacturer that increased on-site storage capacity by 300% over 22 years across multiple projects without opening a new site.
Steve Dimitrovski, director of sales at Swisslog Australia and New Zealand, wrote that the warehouse challenge is structural rather than temporary. He said production expanded first, while storage followed later and became fragmented across disconnected warehouses and rising third-party costs.
