Invest in your product not a warehouse
Being a food producer, there are always new safety regulations, GFSI standards to meet, customer quality rules, and FDA laws to abide by. The food industry is not only getting more complex but it is also more competitive. So why are food processors getting so heavily invested in warehousing?
Obviously, if you produce food you need to store it somewhere. Every manufacturer needs a warehouse of some sort. The real factor is how big this warehouse needs to be. The rule of thumb that I’ve heard most people in the industry abide by is “build your warehouse too small”.
Why would you build your warehouse too small?
The main reason is you can keep the costs down. Food is cyclical like any other business. You have your busy times and you have your down times. You don’t want to build a huge freezer that you are never going to fill at one time. That’s just throwing your hard earned money away. It takes a lot of revenue to uphold a freezer. Your freezer should maintain the amount of product that you regularly need. Seasonal and new business can always be stored at a third party warehouse.
You can project large growth but economic down turns happen that effect most companies. If yours is one of them and your inventory drops severely now not only are you concerned about production but you’ve also got a fixed asset to think about. I’ve seen this happen to one of our old customers. They built an enormous warehouse expecting to manufacture their product for a large customer. This customer dropped out leaving them with a large warehouse sitting empty. In order to save some costs, they had to turn the warehouse into a public one. Out of no choice of their own they had to get into the cold storage industry causing them to have to run two businesses and creating a competitor for us.
Why add more trouble to your plate? It doesn’t make sense. Focus on what you know best – producing food. Leave the cold storage warehousing to us. Times may be good now but why take your hard earned money and invest it into a warehouse that may not always be of value to you. Call McCook Cold Storage- we’ve got space to handle your overflow and seasonal spikes.