Foodstuffs’ $437m frozen, chilled, ambient distribution centre developments: why they’re doing it

Today, Foodstuffs North Island begins work on a new $340m fresh, chilled, frozen and ambient distribution centre at Palmerston North.

That follows it spending $70m in Auckland but only on the fit-out of the building, not developing it, which Auckland Airport is paying for.

Foodstuffs South Island spent $27m on a new Christchurch frozen distribution centre last year.

Plans for Foodstuffs North Island’s new frozen, ambient and chilled distribution centre in Palmerston North. Image / Foodstuffs North Island

Foodstuffs (North Island) chief executive Chris Quin explained how global food trends are now local realities.

“Grocery behaviour” is changing, he said.

“The growth of chilled, frozen and fresh – they are already driving decisions around what food to produce,” he said.

Foodstuff’s North Island CEO Chris Quin.

“Increasingly, we are seeing clear signals of GLP-1 medications influencing consumption patterns, particularly appetite, portion sizes, and category mix,” Quin said.

Foodstuffs is expanding hubs where frozen and chilled food arrives from manufacturers and leaves for supermarkets.

The co-operative is replacing what it regards as essential infrastructure in its food supply chain to Pak’nSave, New World, Four Square and Gilmours’ outlets.

Christchurch, Māngere now and Palmerston North have – or are getting – new chilled and frozen distribution centres.

The co-operative is developing and will own those huge new buildings. They are not being built by outside investors.

Foodstuffs South Island’s new $28m automated frozen distribution centre at Hornby, opened last year. Photo / George Heard

Quin’s June 24 speech to the Primary Industries New Zealand Summit also cited the weight loss drugs.

He said the supermarket business was seeing a strong shift towards convenience and time-saving meals and people drinking less booze.

“We see declining alcohol consumption in certain groups, particularly younger consumers, and the rise of low-carb, sugar-free, and zero [sugar].”

Kris Lancaster, of Foodstuffs, in the new frozen distribution centre at Hornby last year. Photo / George Heard

During Covid, New Zealanders upped their purchases of frozen and chilled goods.

That meant we needed to shop less and had more food security in our homes.

“These are not abstract trends. We are already reconfiguring our stores to cater for these changes…the growth of chilled, frozen and fresh.

“They are already driving decisions around what food to produce,” Quin said.

New Māngere giant: the under-construction frozen distribution centre for Foodstuffs. Photo / Corey Fleming

“One United States retailer described what they were seeing as the ‘half sandwich problem’ – customers still buying lunch, but only eating half of it not because they were trying to cut back, but because they physically felt full sooner.

“That’s the kind of subtle shift that quietly rewrites demand across the entire food system, which has been designed around ever-increasing consumption, not less.

“We’re seeing growing demand for protein and fibre. We’re seeing greater focus on nutrition, portion sizes and feeling full.”

People were becoming more selective about what they eat because they were actually eating less, Quin said.

The three new food hubs are:

$28m frozen distribution centre opened last year at Hornby for Foodstuffs South Island’s capacity. This resulted in a 222% capacity expansion from 2800 pallets to 6240 pallets. Mainlanders’ ice cream, French fries, hash browns, frozen vegetables and berries are housed here before going to their supermarkets;$70m new frozen and chilled distribution centre under construction at Māngere for Foodstuffs North Island’s mid and upper north stores. A 28,128sq m warehouse opposite grocery co-operative’s newish support centre at Māngere. New frozen/chilled distribution centre opening planned for early 2028.$340m new Palmerston North fresh, ambient, frozen and chilled distribution centre, first sod turned today, for lower North Island supermarkets. Extending and adding to existing distribution centre 703, Roberts Line, Milson.

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.

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