Industrial Hub: Takeaways from cold storage calls

Research evidence excerpt

Industrial Hub: Takeaways from cold storage calls

vity with sales generally staying positive in 2025 and YTD (2026). However, refrigerated categories

faced more pressure dropping 1.5% in 2024 (due to price increases) before bouncing 1.5% YTD (due

to price reductions). The concern going forward is that food companies are unable to fully absorb the

persistent inflation and are forced to pass it on to consumers potentially limiting volume sales. For

example, Conagra (NYSE: CAG) announced during its recent earnings call that it is raising frozen pricing

(due to margin pressures) and expects total volume sales to be down in the mid-single digits in FY27

(frozen likely driving most of this decline). We note SNAP benefit reductions driven by OBBBA are also

a concern and GLP-1 is also becoming a bigger topic.

Food supply chain implications: We believe food companies have already made significantly supply

chain cuts and have likely reduced inventory levels as much as they can. We have heard anecdotal

reports from cold storage stakeholders that producers have seen more stock outs meaning inventory

levels are likely too low and might need to be rebuilt to meet current demand levels. Similarly, most

food companies appear committed to continue to pursue new product innovations in an attempt to

support their brand and drive sales. These companies have also been focused on shoring up their capital

position and improving cashflow potentially allowing them to make more product related investments.

We note more innovation would drive higher product offering (SKU proliferation) that would likely

require higher inventory levels. We have seen the above trends in the underlying data with noticeable

inventory reductions in 2023-2025 along with a noticeable stabilization in 2026.