In this Article:
While I love “hot stocks” like everyone else, this one will be hot because it’s so cold.
By design…
Let me step back for a second and talk about something we all have in common: buying groceries
(Editor’s Note: How has inflation impacted food prices? Inflation has pushed food prices 13% higher this year – August’s 13.5% was the highest inflation rate for groceries since March 1979.)
A visit to the grocery store used to bring me great joy. I love cooking and browsing the aisles for some magical new feast to create. It was a methodical, almost meditative experience. Then, COVID hit and turned a trip to the grocery store into something like lurching into a zombie apocalypse….
It changed the way most of us bought groceries. I’m not sure how often you ordered groceries online before the COVID crisis, but I bet you probably started doing it a lot more once we were all sequestered in our homes for over a year.
And you wouldn’t be alone: COVID-19 drove a mass amount of consumers online for their grocery purchases, and once you get used to the ease and convenience of it, pretty much everyone in the country will be sticking to it to some degree.
Food for Thought
According to the Food Marketing Institute, around 70% of grocery sales are expected to move online permanently in the years ahead. And all of that moving food around will be big for one industry that’s crucial in getting that food from warehouses to homes across the world…
Cold storage.
[Alexander Green: The New King of LNG]
In the list of CNBC’s “Disruptors”, they bring up the very basis for my recommendation: Global food insecurity, a social crisis magnified by the pandemic, is not a result of the world lacking enough food.
Rather, the global food supply chain has struggled to move food to the right places via an efficient processing, storage, and transportation system without unnecessary and high levels of waste.
Nearly 25% of fruits and vegetables are lost globally, and the U.S. has among the highest level of food waste, amounting to what the World Bank estimates to be $2.5 trillion. Americans discard more food than any other country, nearly 40 million tons — or almost 40% of the entire U.S. food supply!
This is a solvable problem…
Price Check in the Freezer Aisle
We can start with the freezer aisle in your local grocery store. Frozen products are far less perishable than fresh ones – as long as they stay frozen.
(Editor’s Note: What are the top 5 worst foods to buy frozen – as voted by chefs? The worst foods to buy frozen are herbs, bread, broccoli, strawberries, and scallops.)
Financially speaking, frozen foods are currently on a steady uptrend. The frozen food industry – companies like Kraft Heinz, General Mills, and Unilever – is expected to grow from $252.19 billion in 2021 to $389.90 billion by 2030, according to a new report from Polaris Market Research.
Now, while you could invest in those companies mentioned above and do just fine, I want to focus on a ‘picks-and-shovels‘ play here. On a company that stores all of this frozen food across the country to be distributed in our freezer aisles.
[Matt Milner’s Early-Stage Playbook: How to Buy Into Pre-IPO “Shadow Market” Deals]
Cold storage itself is not a new idea. The first cold storage company in the U.S., New Orleans Cold Storage, was founded in 1886. In their Disruptors article, CNBC was highlighting a company called Lineage Logistics, which has a global network of temperature-controlled cold-storage facilities for proteins, bakery products, dairy, and fruits and vegetables.
It also manages processing facilities and automated custom warehousing. It has developed some state-of-the-art technology that allows the company to maximize its warehouse system — including “blast-freezing” at temperatures as low as -25 to -35 degrees Fahrenheit on up to five million pounds of product a day at a single facility and using only 40%–50% of the time required in traditional blast-freeze operations.
It also runs the warehouses with what has been called Tetris-like efficiency.
Lineage Logistics owns 27.7% of the industry market share, but it isn’t publicly traded right now.
But you know what it is?
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