Business Monday

Preferred Freezer Services’ cool niche

TALL ORDER: Rod Armesto, sales manager, moves seafood to the storage area at Preferred Freezer Services new facility in Hialeah Gardens.
TALL ORDER: Rod Armesto, sales manager, moves seafood to the storage area at Preferred Freezer Services new facility in Hialeah Gardens. MIAMI HERALD STAFF

Riding a boom in the global movement of frozen foods, Preferred Freezer Services in June opened its third refrigerated public warehouse in Miami-Dade, a state-of-the-art center that spans 118,000 square feet.

By November, the cavernous new facility in Hialeah Gardens was nearly at its capacity of 9million cubic feet of storage, with pallets stacked high with a myriad of refrigerated goods from around the world.

“We built this place thinking we would have room for future growth,” said Brian Beattie, Preferred Freezer’s president, as he walked briskly through the cooler area. “But it’s already just about full.”

Stacked on the towering shelves: Mahi-mahi from Taiwan. Shrimp from Ecuador. Beef from Brazil and Argentina — and Colorado.

To be sure, Preferred Freezer geared up for the opening of the new $25million facility. The company rented space nearby about a year ago to begin staging products so it could hit the ground running when the new facility opened. Still, the warehouse’s strong reception among importers, exporters and distributors is outperforming company expectations.

“It’s a very, very good thing. And we’re pleasantly surprised,” Beattie said.

Preferred Freezer Services’ growth in South Florida is fueled by expanding local demand for frozen goods combined with the region’s increasing role as an import-export hub.

South Floridians, like Americans in general, are casting ever wider nets to satisfy their palates.

And as PortMiami pursues major upgrades, officials have been campaigning to attract more perishables through the port, capturing cargo, for example, that used to go to Northeast destinations.

With the opening of the expanded Panama Canal set for 2016, Preferred Freezer anticipates continued growth in South Florida.

PortMiami recently doubled its capacity for refrigerated containers to plug in at the port as part of its courtship of perishable shipments. “It’s a new route for food” coming into and leaving the country, said Eric Olafson, port manager of cargo development. South Florida’s burgeoning population growth combined with strong tourist traffic means lots of hungry mouths to feed.

Preferred Freezer first came to Miami-Dade in 1999, opening a warehouse at 12855 NW 113th Ct.

The South Florida move marked the first expansion outside New Jersey for the company. Its founder and CEO, John Galiher, an expert in refrigeration engineering, started the company in 1989 with a single refrigerated warehouse in Perth Amboy, New Jersey.

Preferred Freezer launched its second Miami-Dade facility in Medley at 13700 NW 115th Ave. in 2001.

The newest warehouse, at 13801 NW 112th Ave. in Hialeah Gardens, was built on raw land near the junction of the Florida Turnpike and Okeechobee Road, less than two miles from the Medley facility.

Buoyed by dramatic changes in the food-supply chain over the past decade, the company has grown to 33 facilities in 10 states plus China and Vietnam. It expects 2014 sales of nearly $300million, marking double-digit annual growth, Beattie said.

“The globe has gotten small, and products move in and out of the United States more than ever,” Beattie said.

Preferred Freezer has more than 1,300 employees. That includes 150 in South Florida, 50 of whom were hired for the Hialeah Gardens center.

Preferred Freezer ranks No.3 in the United States and No.4 in the world in capacity among public refrigerated warehouses, according to the International Association of Refrigerated Warehouses, a trade group. It handles some 80 percent of the U.S. seafood imports and exports.

Its customers range from food-distribution giants like Sysco, US Foods and MBM to local firms like Harvest Valley Inc., a Miami Gardens-based importer of Asian foods that supplies local restaurants with everything from chicken, pork and beef to specialty vegetables.

Typical end customers, or consignees, include stores like Publix, Sedanos and Walmart and restaurant distributors.

In 2008, Fenway Partners, a New York-based private equity firm, acquired a majority stake in Preferred Freezer. Galiher and other executives own a 25 percent stake in Preferred Freezer.

The company’s newest warehouse was developed under a build-to-suit agreement with Gramercy Property Trust Inc., a publicly traded REIT. Preferred Freezer has a 25-year lease on the facility, a typical arrangement.

“The reason we do sale leaseback agreements is we can take all our capital and continue to invest it in growth. It’s a great enabler. We don’t tie our money up in assets,” Beattie said. “We’d rather pay rent.”

The Hialeah Gardens center is designed to be energy efficient, including its use of LED lighting. Thick walls are made of insulated metal panels, and a membrane roof with a vapor barrier is designed to keep out heat.

The R-value, a measure of resistance to heat flow, “is about as high as you can get,” said Jeffrey DeMarco, partner and president of construction at Campanelli, a Braintree, Massachusetts-based construction company that built the Hialeah Gardens facility for Preferred Freezer.

Campanelli is now working in Houston on its 14th project for the freezer giant.

Preferred Freezer’s facilities vary in size, but they follow a consistent design for the walls and roof and in the way they are cooled by giant compressors.

“Preferred Freezer installs enough capacity so no one machine is overloaded,” DeMarco said. “One machine could do the whole building, but it has three, and they circulate on and off to be efficient.”

The freezer is chilled to 15 degrees below zero. Vast in size and dimly lit, the freezer accommodates palettes of goods stacked seven or eight high. Seafood is the top product in the Miami facilities. Also big are beef, pork, ethnic frozen foods and frozen baked goods.

Warehouse workers bundle up to brave the chill. Some work from heated cabins on forklift equipment, picking up and putting away goods.

Next to the freezer is the cooler, where products are staged, usually briefly, for pickup at truck docks amid temperatures in the high 30s to low 40s.

Manny Castro, a shipping manager who works at the control center scheduling goods leaving the facility, said the company instills a culture of customer service in employees. “Always a smile — no matter what kind of day you’re having,” Castro said.

The facilities include inspection areas for the U.S. Food and Drug Administration and the U.S. Department of Agriculture. The warehouses also provide space for customers to present samples to prospective buyers to test for quality.

Besides refrigerated space, Preferred Freezer provides a range of services from picking up cargo from a seaport and trucking it to a warehouse to labeling and packing goods for distribution to delivering products to end customers.

Barry Rosa, vice president of Harvest Valley Inc., said the Miami Gardens-based importer of Asian foods has been using Preferred Freezer’s facilities in Miami since 1996, primarily to provide extra space when its own refrigerated storage is occupied.

Rosa’s container shipments arriving at PortMiami or Port Everglades are trucked to Preferred for storage. Preferred sorts the products — including seafood, meat and vegetables — and stores them until they’re needed. Shrimp, for example, one of the core products that Harvest Valley imports, is separated by size before storage.

“Sometimes we run into space situations and we have the product brought to Preferred. As soon as space is available in our facility, we bring it over,” Rosa said. That could be a few days, a few weeks or even months.

It isn’t uncommon for Preferred Freezer’s managers to join workers on the warehouse floor to expedite shipments, according to Beattie, who joined the company in 2010 after holding various management jobs at CHEP USA, PepsiCo, Tenneco and Ryder Corp. in Miami.

“Our whole philosophy is the driver is the face of the customer,” Beattie said. “What the driver wants is to get in and out fast.”

Preferred Freezer Services

Business: Refrigerated warehouses.

Employees: More than 1,300, including 150 in South Florida.

Customers: Sysco, MBM, US Foods.

Management: Founder and CEO John Galiher; president Brian Beattie.

History: Founded in 1989 in Perth Amboy, N.J. First foray into Florida in 1999.

Headquarters: Chatham, New Jersey

Locations: 33 in Florida, New York, New Jersey, California, Georgia, Illinois, Massachusetts, Pennsylvania, Texas, Virginia, Vietnam and China. Florida operations include three warehouses in Miami and one in Jacksonville.

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