companies existed in North America long before the introduction
of modern refrigeration. Ice was cut in large blocks from nearby
rivers or lakes in the winter and stored in huge buildings, or icehouses,
that were usually insulated with sawdust. In the warm summer months,
the blocks of ice were then removed as required, and delivered by
the “Iceman”, whose wagon was a common sight on the
streets of cities and towns everywhere. The ice provided limited,
but essential, refrigeration for the growing numbers and varieties
of perishable goods that were destined for the marketplace.
the invention of modern refrigeration, the old way of "harvesting"
ice disappeared. The end of an era from one ice industry, led the
way for the beginning of another: The Packaged Ice Industry. From
very small beginnings, the packaged ice industry grew quickly with
consumer demands. The increasing trend towards drinking cooled or
chilled beverages, which at one time was unheard of, firmly established
the "bag of ice" as a food product that is readily available
today in almost every grocery and convenience food outlet in Canada
and the United States.
Today the packaged ice industry operates as a very fragmented industry.
It is estimated that the North American packaged ice industry is
comprised of over 2,000 companies, most of which are small, independent,
family-owned businesses operating in local markets and have annual
sales of less than U.S. $1 million. Many of these ice companies
enjoy limited competition within the areas they serve.
In most cases, these ice companies are able to maintain their
usually long established market share for many reasons, with the
two primary reasons being:
||The extremely high start up costs for ice
production, storage, and delivery equipment associated with
the business; and,
||The seasonal nature of the business combined
with the prohibitive high costs of transporting ice over long
distances, because of the high weight-to-volume ratio.
The management of Arctic Glacier believes that
there are significant growth opportunities through the acquisition
and consolidation of well-run, regional and local ice production
and distribution companies. Profitability can be expected to increase
by realizing economies of scale in plant operations, general overhead
and administrative costs, as well as efficiencies from higher density
delivery routes. The growth and consolidation of "corner stores"
into regional and national convenience and grocery store "chains"
which prefer dealing with one regional supplier give further support
to Arctic Glacier’s acquisition and consolidation strategy.