Food and beverage warehouses across Australia are under more pressure than ever. Inventory volumes are growing, warehouse rents are rising, and experienced logistics staff are increasingly hard to find. Meanwhile, food safety standards continue to rise, and any disruption to the cold chain can result in significant financial losses and damage to a company’s reputation.The numbers tell a clear story. According to the National Skills Commission, warehousing and logistics occupations have experienced persistent labour shortages across Australia for several consecutive years. Meanwhile, food waste costs the Australian economy an estimated $36.6 billion annually, much of it driven by poor stock rotation and inadequate storage practices. And in cities like Sydney, industrial warehouse rents have risen sharply, making every square metre of floor space a meaningful cost.
Automated storage for food and beverage warehouses offers a practical response to all of these pressures. By bringing products directly to the operator, enforcing stock rotation automatically, and making far better use of available space, automated systems can help food and beverage businesses run more efficiently, meet hygiene standards, and keep up with demand without needing to expand their facility.
In this article, we look at the real challenges facing food and beverage storage operations, how vertical carousel systems from Kardex address them, and what a warehouse manager needs to consider when evaluating automated storage.
Food and beverage warehouses face four main storage challenges: keeping inventory in the correct rotation order to prevent spoilage and expiry, maintaining hygiene to meet food safety standards, making the most of expensive and limited floor space as product ranges grow, and managing operations with fewer available staff than the work requires.
What is FIFO in food warehousing? FIFO stands for First In, First Out. It means the oldest stock is always picked and despatched first. This is standard practice for most food and beverage products and is a core requirement under FSANZ (Food Standards Australia New Zealand) food safety frameworks.
What is FEFO? FEFO stands for First Expired, First Out. Rather than rotating by date received, products are picked in order of best-before or use-by date. FEFO is particularly important when dealing with products that have variable shelf lives or where supplier batch dates differ from delivery dates.
In a conventional warehouse, maintaining FIFO or FEFO depends on staff following procedures correctly every single time. When products are stored in standard shelving or pallet racking, newer stock often ends up at the front while older stock gets buried at the back. The consequences are clear: expired stock remains on hand, product waste rises, and in severe situations, businesses may face costly product recalls.
Batch tracking adds further complexity. Distributors supplying supermarkets or food manufacturers may need to trace specific batch numbers for quality or regulatory purposes. Without a system to support this, batch management relies on manual record-keeping, which is both time-consuming and error-prone.
Food storage environments must meet strict hygiene standards under FSANZ guidelines. Cross-contamination between products — particularly between raw and ready-to-eat foods, or between allergen-containing and allergen-free lines — can have serious consequences for food safety and brand reputation.
The problem is that open shelving and pallet racking are difficult to clean thoroughly. Dust settles in corners and on product surfaces. Hard-to-reach sections at the back of deep shelving rarely get properly cleaned. Forklifts moving through storage areas bring in contaminants from the loading dock. For businesses handling dairy, frozen foods, fresh produce, or beverages, these are not theoretical risks — they are daily operational realities.
SKU proliferation has been one of the defining trends in food and beverage distribution over the past decade. Retailers and foodservice operators now expect a much wider product range, more packaging variants, and faster replenishment cycles. For warehouse operators, this means storing more individual product lines in facilities that were often designed for a smaller, simpler range.
Stat: According to CBRE, Sydney’s industrial vacancy rate fell to record lows in recent years, with rents in key logistics precincts rising significantly. For food businesses operating temperature-controlled warehouses, every unused cubic metre carries both a rental cost and an energy cost.
Most conventional warehouses use only the bottom four to five metres of available height. The space above that — which can be seven, eight, or even ten metres in a modern tilt-slab facility — sits largely empty. That is floor space being paid for but not used.
Staff shortages in logistics and warehousing are a documented, ongoing challenge across Australia. The National Skills Commission has consistently listed forklift operators, storepersons, and pick-and-pack workers among occupations with persistent shortfalls in available labour.
Even where staff are available, labour costs continue to rise. Picker travel time — the time spent walking between storage locations rather than actually picking — can account for 40 to 60 per cent of a picking shift in a conventional warehouse. Manual handling of heavy or awkward products increases fatigue and injury risk, contributing to absenteeism and workers’ compensation claims.
Vertical carousels support FIFO and FEFO by automating the delivery of stock to the operator in the correct sequence. The system controls which carrier is presented at the access point, removing the risk of pickers selecting the wrong batch or bypassing older stock. Rotation logic is enforced by the machine, not by individual staff behaviour.
Kardex vertical carousels operate on a goods-to-person principle. Instead of sending staff into storage aisles to find products, the carousel brings the right product directly to the operator at an ergonomic working height. The inventory management software integrated with the system is configured to automatically sequence retrieval according to FIFO or FEFO rules.
This is how it works in a real-world warehouse environment:
A practical example: a beverage distributor storing seasonal stock — such as limited-edition flavours or promotional packaging — can configure the food grade vertical carousel to retrieve older inventory first. This ensures that promotional stock does not sit in storage beyond its relevant trading period. The same logic applies to standard lines where consistent FIFO discipline is essential.
A beverage distributor managing over 1,800 SKUs implemented a Kardex vertical carousel to address persistent FIFO compliance failures. After installation, expired stock incidents were eliminated in the first six months of operation. Batch recall queries that previously took up to 45 minutes to resolve could be answered within seconds through the inventory software.
Vertical carousels improve food warehouse hygiene by enclosing stored products within a protective housing that limits dust, pest, and airborne particle exposure. Smooth internal surfaces are straightforward to clean. And because staff interact with products only at the controlled access point, the risk of contamination from human handling is significantly reduced.
In food and beverage warehouses, the hygiene properties of storage equipment matter just as much as the operational processes around it. Here is the problem-to-solution picture:
Problem: Food distributors regularly face allergen contamination risks from open shelving environments where dust, debris, and airborne particles can settle on stored products.
Evidence: Open shelving systems have no barrier between stored products and the warehouse environment. In busy distribution centres, forklift movements, air circulation from loading dock doors, and general foot traffic all introduce contaminants.
Solution: Kardex vertical carousels provide enclosed storage environments with restricted and controlled access points. Products are contained within the carousel housing and only exposed at the picking station.
Outcome: Businesses reduce contamination risk, simplify hygiene audit documentation, and spend less time on corrective cleaning of product surfaces.
These characteristics make vertical carousels well suited to several food and beverage sectors:
For businesses operating under FSANZ food safety requirements, the ability to demonstrate that storage systems actively support hygiene objectives strengthens quality assurance documentation and simplifies third-party audits. Vertical Carousels Australia can advise on Kardex system configurations that align with your specific food safety management plan.
Automated storage improves warehouse efficiency by using vertical airspace that conventional racking leaves empty, consolidating inventory into a much smaller floor area, and removing the need for staff to walk to storage locations. Space savings of up to 80% are possible depending on warehouse layout and inventory profile. Labour productivity typically improves substantially through goods-to-person picking.
Beverage warehouse storage solutions based on vertical carousel technology can reduce storage footprints by up to 80% compared to conventional shelving, depending on your inventory profile and ceiling height. This happens because carousels use the full height of the warehouse rather than stopping at standard rack height.
In real terms, this means:
Stat: In temperature-controlled warehouses, refrigerated space typically costs three to five times more per square metre to operate than ambient space. Reducing the active cold storage footprint through high-density automated storage can therefore deliver meaningful energy savings, not just rental savings.
Picker travel time is one of the most significant non-productive activities in a conventional warehouse. Research on manual picking operations consistently shows that travel accounts for 40 to 60 per cent of picking time in large facilities. Goods-to-person technology eliminates most of this.
The labour benefits in practice:
A fresh food distributor managing 2,500 SKUs across a refrigerated picking area installed Kardex vertical carousels to address staff shortages and escalating overtime costs. Picker travel time dropped by approximately 65 per cent. The business maintained the same throughput with two fewer staff per shift, and manual handling injury reports fell in the first year of operation.
Cold chain storage automation protects product quality by reducing the time temperature-sensitive products spend outside their controlled environment during picking. Faster retrieval means shorter temperature excursions, lower spoilage rates, and more consistent product quality at the point of despatch.
Temperature integrity is the foundation of cold chain management. For frozen foods, dairy, chilled beverages, and fresh produce, even brief exposure to incorrect temperatures can accelerate spoilage and in some cases create food safety risks.
In a conventional cool room, every picking trip means a door opening, warm air entering, and a temporary rise in ambient temperature. If the picker spends time searching for the correct product or batch, that temperature excursion lasts longer. Cold chain storage automation changes the dynamic:
Stat: According to industry estimates, cold chain failures cost Australian food businesses hundreds of millions of dollars annually through spoilage, recalls, and lost sales. Even modest improvements in temperature control consistency can have a material impact on waste costs.
Cold chain storage automation applies across a wide range of food and beverage categories, including frozen foods at -18°C or below, dairy products at 0 to 4°C, chilled beverages and fresh juices, and ambient-sensitive products such as wine and chocolate where humidity control matters as much as temperature.
Kardex vertical carousel systems are engineered to operate in temperature-controlled environments, making them a sound option for cold chain storage automation in Australian food and beverage distribution centres. Vertical Carousels Australia can advise on the appropriate system specification for your temperature range and throughput requirements.
Compared to static shelving and pallet racking, vertical carousels deliver significantly better space utilisation, automated FIFO control, faster picking speeds, and lower labour dependency. Traditional storage methods rely entirely on staff discipline to maintain rotation and hygiene standards, while automated systems enforce these outcomes by design.
| Feature | Vertical Carousel (Kardex) | Static Shelving / Pallet Racking |
|---|---|---|
| FIFO / FEFO Control | Automated — enforced by the system | Manual — depends on staff compliance every time |
| Space Utilisation | High — uses full building height | Low — typically only 4–5m of height used |
| Picking Speed | Fast — goods delivered to operator at pick station | Slower — operator walks to product location |
| Labour Dependence | Low — fewer staff required per shift | High — requires a larger workforce to achieve the same throughput |
| Hygiene Management | Enclosed storage, smooth surfaces, easy to clean | Open to environment, difficult to clean thoroughly |
| Cold Chain Suitability | Yes — engineered for cool room environments | Yes, but temperature excursions longer during picking |
| Batch Traceability | Built-in — real-time visibility via inventory software | Manual record-keeping required |
| ROI Drivers | Labour savings, space savings, reduced waste, error reduction | Lower upfront cost, but ongoing labour and waste costs |
Two types of automated storage systems are commonly used in food and beverage warehouses: vertical carousels and Vertical Lift Modules (VLMs). Both are supplied and supported by Vertical Carousels Australia, and both operate on the goods-to-person principle. The right choice depends on your inventory profile, throughput requirements, and warehouse dimensions.
| Feature | Vertical Carousel (Kardex) | Static Shelving / Pallet Racking |
|---|---|---|
| FIFO / FEFO Control | Automated — enforced by the system | Manual — depends on staff compliance every time |
| Space Utilisation | High — uses full building height | Low — typically only 4–5m of height used |
| Picking Speed | Fast — goods delivered to operator at pick station | Slower — operator walks to product location |
| Labour Dependence | Low — fewer staff required per shift | High — requires a larger workforce to achieve the same throughput |
| Hygiene Management | Enclosed storage, smooth surfaces, easy to clean | Open to environment, difficult to clean thoroughly |
| Cold Chain Suitability | Yes — engineered for cool room environments | Yes, but temperature excursions longer during picking |
| Batch Traceability | Built-in — real-time visibility via inventory software | Manual record-keeping required |
| ROI Drivers | Labour savings, space savings, reduced waste, error reduction | Lower upfront cost, but ongoing labour and waste costs |
Vertical Carousels Australia partners with organisations throughout Australia and New Zealand to evaluate their operational needs and identify the most suitable storage solution. With over 30 years of industry experience, the Vertical Carousels Australia team can evaluate whether a vertical carousel or VLM is the right fit, and provide full installation, training, and ongoing support — including 24/7 emergency breakdown coverage.
The challenges facing food and beverage warehouse operations in Australia are real and getting harder to ignore. Labour shortages are not a short-term problem. Warehouse rents in major logistics precincts continue to rise. Food safety expectations are tightening. And the cost of getting stock rotation wrong — in spoilage, recalls, and waste — runs into serious money.
Automated storage for food and beverage warehouses addresses all of these issues through a single, practical change to how stock is stored and retrieved. FIFO and FEFO compliance become a function of the system, not a dependency on staff behaviour. Hygiene is easier to maintain through enclosed storage and clean surfaces. Cold chain integrity improves as retrieval time drops and temperature excursions are minimised. And by using available vertical space far more efficiently, distribution centres can accommodate growing product ranges without expanding their footprint.
The labour savings are equally significant. Goods-to-person technology removes most picker travel time from the equation. Fewer staff are needed per shift for the same throughput. And the ergonomic benefits of working at a fixed, comfortable picking station reduce the injury and absenteeism costs that come with manual warehouse work.
Vertical Carousels Australia has over 30 years of experience supplying and supporting Kardex automated storage systems across Australia and New Zealand. Whether you manage a large cold chain distribution centre or a smaller food distribution operation, Vertical Carousels Australia can assess whether automated storage is the right fit for your warehouse.
If your warehouse is running short on space, struggling with FIFO compliance, or facing rising labour costs, a warehouse assessment can identify how much space and labour could potentially be saved through automation. Vertical Carousels Australia provides obligation-free assessments that include a space utilisation review and an indication of likely ROI for your specific operation.
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