Food for thought

10 June 2021

The challenges of a dynamic food sector require highly specified, flexible warehouse space, says Matt Whittaker. Now, where is it? 

WHEN IT comes to warehousing, the food sector presents many unique challenges. The sector is experiencing rapid change, with new demands, and this makes finding suitable storage facilities, that can be accessed on a flexible basis, a business-critical issue. Facilities need to be designed around the need to meet onerous fulfilment timings (whether to supermarkets or home consumers), to operate FIFO easily, to allow segregation of products – to avoid cross-contamination, transfer of odours etc. – and to address other hygiene requirements.

Capacity requirements may be highly seasonal. Goods to meet Christmas or Easter demand are produced and warehoused through the year then pushed rapidly into the market. Conversely, produce such as broad beans are harvested and frozen over a very short season and marketed through the rest of the year. These ‘sawtooth’ patterns of supply and demand mean firms either pay for space that is underused for much of the time, or scramble for additional capacity to accommodate peaks. 

But, critically, new space is not coming to market in any quantity.

The reasons are not hard to find. For most investors and developers, the core product is four walls, a roof and a floor, with minimal if any fit out, which the user company can lease on a ten-year term and fit out to suit. The developer isn’t going to try to second-guess the, possibly unique, requirements of an as yet unknown food industry customer. 

But many potential customers, often working on very fine margins, are in no position to commit to long leases, or to costly and time-consuming fit-outs. Even if they are, many new builds don’t meet the requirement. An efficient environmental regime needs high levels of insulation in roofs, walls and floors. Air circulation is important, as is ducting and cabling for environmental monitoring. There may be requirements for washing down vehicles, containers, transit packaging to food industry standards, so a need for more hard standing and possibly extra waste water treatment facilities. If not included in the initial build, these features cost time and money to retro-fit.

Bis Henderson Space has many food industry clients in urgent need of operational space, for a relatively short term. It may be while they see if their new business models work, or if their current growth is sustained, or perhaps, to accommodate growing seasonal peaks, or both. The traditional property market can’t really help, but we can access our extensive network of less ‘conventional’ suppliers – not in the property world but in the user community – to match up supply and demand, and manage this provision ‘as a service’. Not only can we help clients meet their capacity requirements, but by offering space as a managed service, we can help them avoid long-term balance sheet commitments.

In the current market we, and our clients, have to accept that the ideal solution simply may not be available. Occasionally, we have to advise our clients to bite the bullet and pay a competent 3PL for its services. Sometimes, our advice on addressing problems around ‘peaks’, or around very high outbound throughput requirements, may be to revisit the production cycle, or the operational procedures in the warehouse. More often, though, we can work with our clients and our space providers to find workable solutions.

Matt Whittaker, commercial director, Bis Henderson Space

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