Minnesota food company’s need for cold storage spawns $40 million warehouse – Agweek

Albert Lee, Minnesota — Reliable and large freezer space is a must for any growing frozen food company.

Minnesota-based JonnyPops has set up a spin-off company to build an approximately $40 million freezer and refrigerator warehouse in southern Minnesota.

Connor Wray, one of the founders of JonnyPops and Vortex, said the project has grown about 50% from its original concept when he started talking to other companies that needed refrigerated storage.
“We were able to facilitate many of these conversations to get a sense of the temperature across the industry,” Ray said. “We certainly found enough of the same sentiments as we do that there is a need for additional capabilities and capabilities and competition within the market.”

At the intersection of Interstate 90 and Interstate 35 in Albert Lea, Vortex Cold Storage will open a 170,000 square foot cold storage warehouse in 2022.

This project is an example of the importance of refrigeration and freezer space in the food supply chain.

“The demand for finished products and raw materials, the cold chain and this refrigeration or freezing concept has only increased over time and we have not necessarily seen an increase in the availability or accessibility of the cold chain. , said Jason Robinson of the Minnesota Institute of Agricultural Utilization.

And about half of the existing cold storage facilities in the US were built before 1980.

“Not only are we short, we’re old with what we have,” Ray said.

Robinson said AURI is working with the U.S. Department of Agriculture’s Agricultural Marketing Service to meet demand for cold storage in Minnesota, Wisconsin, North Dakota, South Dakota and Iowa, and the potential to build more facilities. are investigated and quantified.

Robinson said AURI and the Minnesota Department of Agriculture get a lot of questions from food entrepreneurs and midsize businesses looking for cold storage space.

“AURI and the Minnesota Department of Agriculture are continually trying to find solutions where the state can provide some relief or assistance,” Robinson said.

The Minnesota Department of Agriculture, through its Good Food Access Program, provided grants to 19 small retailers in fiscal 2022 for improvements including cooler and freezer space.

Vortex Cold Storage is the result of JonnyPops. JonnyPops was one of the smaller players Robinson mentioned not so long ago.

JonnyPops began nearly a decade ago at St. Olaf College in Northfield, Minnesota as what Wray called a “college buddy” project.

Chief Financial Officer Ray and Johnny Pops CEO Eric Blast put the idea of ​​making better popsicles into action.

According to Ray, Johnny Pops are “best described as a smoothie on a stick” and are made with real fruit and cream. It started as a part-time business selling at farmers markets.

JonnyPops turned to a full-time career in 2014, working at about 50 local grocery stores.

Since then, Twin Cities-based JonnyPops has grown to sell at more than 15,000 retailers in all 50 states and several other novelty foods.

“And we scaled up a lot, which is a lot of fun,” says Wray.

But that expansion meant trying to have its own cold chain, which is why we forked into Vortex Cold Storage.

Vortex serves companies that need to store finished retail products such as JonnyPops, partially processed goods en route to final processing facilities, and raw materials such as frozen fruit, vegetables and meat. .

Vortex offers three temperature zones (refrigerated area, -5°C, -20°C) and can load, unload and manage thousands of pallets of food.

Vortex is at the forefront of refrigeration technology, using carbon dioxide instead of CFCs and ammonia for a greener and safer refrigeration system.

“There have been many evolutions in the underlying technology,” Ray says. “Because CO2 offers a higher level of efficiency than CFCs, and because it is closer to ammonia, ammonia does not incur significant compliance, health and safety risks, and costs associated with plant operation.”

In addition to its energy efficient building materials and design, it helped the project earn an award from C-PACE (Commercial Property Assessed Clean Energy). C-PACE helps fund energy efficient, renewable energy, or other projects through the Federal Department of Energy. Vortex Cold Storage acknowledges reducing carbon emissions by 1,500 tons per year.

With multiple tenants lining up early on, Wray said the project could be sold fairly easily to lenders.

“Combining all the right elements tells us what the bank cares about. Is there support? Is the project financially viable? And we have that confidence up front. We put a lot of effort into ensuring that,” Ray said.

Ray said other companies appreciate that the project is approached from the operational mindset of someone who needs refrigerated storage, as opposed to the mindset of a Wall Street real estate developer. I was.

Financing and construction partners included Essex Capital of Bloomington, Minnesota. JCW Development, Horikon Bank. WDS Construction in Wisconsin.

The Vortex project will break ground in 2021. It will begin partial operation in early 2022 and has been fully operational since June.

The facility has 12 loading bays and a trucker break room, but does not own any trucks. About 30 employees work in two shifts.

“We need the right people 10 hours a day in an environment below 20 degrees,” says Wray. “That means you have to find someone who appreciates the unique challenges that come with working in a cold storage warehouse, in addition to the ongoing challenges that everyone has[in employment].”