COMMERCIAL REFRIGERATION EQUIPMENT MARKET ANALYSIS

Global Commercial Refrigeration Equipment Market size was valued at US$ 53.38 Billion in 2022, exhibiting a compound annual growth rate (CAGR) of 4.7% from 2023 to 2030.  Refrigeration equipment are an integral part of supermarket storage facilities with aspects such as racking, storing, cooling, temperature control and preserving food items. An increase in urbanization is indirectly increasing the need for refrigeration equipment. According to the World Bank Group, 56% of the world lives in urban areas and this statistic is expected to double by 2050, at which point, 7 out of 10 people will live in cities. This will result in an increase in supermarkets and hypermarkets due to a surge in demand by the increased population. This will result in an increased demand for refrigeration equipment between the years 2023 to 2030 due to a steady growth of around 4.7% Year on Year.

Another key market driver for refrigeration equipment is the shift to eco-friendly gases. For instance, most of the companies are now shifting from natural refrigerants such as ammonia, carbon dioxide, hydrocarbons, water, and air. Honeywell introduced a brand-new, energy-efficient, non-flammable refrigerant called Solstice N71 (R-471A) in January 2022 to meet stringent regulations for lowering greenhouse gas emissions. A sustainable and eco-friendly addition to the refrigerant equipment may also lead to an increase in supply by manufacturers.  Also, the increase in the demand for Ready-To-Eat products shall result in the expansion of the organized food retail sector. Such frozen foods are increasingly being added to the diets of many people, which requires proper refrigeration equipment for storage purposes.

Global Commercial Refrigeration Equipment Market - Regional Analysis

Figure 1. Global Commercial Refrigeration Equipment Market Share (%), By Region, 2022

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North America is expected to hold a market share of 36% by 2030, considering its dominance of 31% market share in 2022. The top producers of industrial/commercial refrigeration are Excellence Industries, Illinois Tool Works Inc., Lennox intl. Ltd, Standex intl Co. The fastest growing region, forecasted to continue growing at a rapid rate, is the APAC region, due to the growth and development of economies such as China and South Korea.

The market for Commercial Refrigeration Equipment is increasing in Europe due to rising trend of technologically advanced buildings. These buildings also include malls, supermarkets and hypermarkets which shall require cold storage and refrigeration equipment alternatives for storage of frozen foods.

In Latin America, the growth for the market is gradual due to steady construction of new commercial and recreational structures.

Also the growing rate of urbanization is leading towards greater use of refrigeration equipment across Middle East and African countries as well. External companies are also investing large sums of monies resulting in the growth of the commercial sector.

Global Commercial Refrigeration Equipment Market- Segmentation

Food and Beverage Refrigeration Equipment leads the market use of refrigeration equipment.

The Food and Beverage includes beverage dispensing, drinking fountains and soda fountains. A Beverage Dispensing machine is an automated device that mixes 1 or more concentrated ingredient into a ready-to-drink container. A drinking fountain is a device producing beverage through either a pump or through other means to provide a beverage at its outlet. These segments are mainly used across supermarkets, malls, theatres and restaurants for storing food and beverages for their customers. The primary purpose of the refrigerant equipment is to store and maintain the food and drinks at a cold temperature prior to its serving.

Figure 2. Global Commercial Refrigeration Equipment Market Value (US$ Bn) Analysis and Forecast, by Product Type, 2022

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Global Commercial Refrigeration Equipment Market was valued at US$ 53.38 Billion in 2022 and is expected to reach US$ 76.86 Billion by 2030, exhibiting a CAGR of 4.7% between 2023 and 2030.

Global Refrigerant Equipment Market- Key Competitors

Key industry participants in the commercial refrigeration equipment market include United Technologies Corporation, Ingersoll-Rand plc, Johnson Controls Incorporated, Daikin Industries Limited, Dover Corporation, Hussmann Corporation, AHT Cooling Systems GmbH, Ali SpA, Illinois Tool Works Incorporated, Emerson Electric Company, Leer Incorporated, True Manufacturing Company Incorporated, and Whirlpool Corporation among others.

Global Refrigerant Equipment Market - Recent Developments

1. S based company Honeywell International Inc., which produces automotive and aerospace products; control systems for residential, commercial, and industrial settings; specialty synthetic substances and plastics; what's more, designed materials. The merger of AlliedSignal Inc. and Honeywell Inc. in 1999 led to the formation of the current business, which has its headquarters in Morristown, New Jersey. On April 12 2023, Honeywell announced the inauguration of its sustainability center in Madurai, Tamil Nadu. This will act as a hub that shall support their environmental, engineering and sustainability goals. The hub will also lead to the company adopting natural refrigerant alternatives in order to work hand in hand with UN ESG principles and to be carbon neutral by 2025.
2. Linde is a worldwide global synthetic organization established in Germany and, beginning around 2018, domiciled in Ireland and settled in the Unified Realm. By revenue and market share, Linde is the largest industrial gas company in the world. It serves clients in the medical care, petrol refining, fabricating, food, drink carbonation, fiber-optics, steel making, aviation, material dealing with gear (MHE), synthetics, hardware and water therapy industries. The organization's essential business is the assembling and dissemination of air gases, including oxygen, nitrogen, argon, uncommon gases, and cycle gases, including carbon dioxide, helium, hydrogen, smelling salts, electronic gases, specialty gases, and acetylene. On April 20, 2023, Linde announced that it has signed a long-term agreement to supply green hydrogen to Evonik, a leading specialty chemicals company. Linde will build, own and operate a nine-megawatt alkaline electrolyzer plant on Jurong Island, Singapore. The plant will produce green hydrogen, which Evonik will use to manufacture methionine, an essential component in animal feed. The new supply agreement supports the planned expansion of Evonik’s existing facility and will help Evonik limit its greenhouse gas emissions in Singapore.
3. On January 31, 2022, U.S. based company Honeywell International Inc announced an innovative, new low-global-warming-potential (GWP) refrigerant for commercial and industrial refrigeration that is optimized for supermarkets. The product meets the needs of grocers and retailers who are wanting low-global-warming solutions ahead of likely regulatory changes The newest addition to Honeywell's proprietary low-GWP line of Solstice solutions for various applications, Solstice N71 (R-471A) is the supermarket industry's first non-flammable and energy-efficient solution with a GWP of less than 150.
4. Johnson Controls is a world leader in offering automation systems, buildings and providing refrigeration solutions. The company is committed to building solutions that are sustainable. The company is building a new facility which is going to act as a state-of-the-art engineering laboratory assisting them in their day to day operations. The new office will use low-influence advancement and incorporate Johnson Controls hardware, storm water maintenance, and different innovations zeroed in on productivity and upgraded air filtration. Through building reuse, embodied carbon will be reduced, and construction waste will be reduced throughout the construction process.

Commercial Refrigerant Equipment Market – Drivers

Growing Food Production: 

As food production increases, there is an increasing need for better storage and refrigeration solutions - ultimately driving growth in this market. The increase in the supply of food and frozen eatables requires appropriate freezers and storage facilities as well. This means Refrigerant Equipment shall be needed to cater to the growing demand. The perishable nature of food means that it needs to be preserved so that it lasts for a longer period of time. Refrigeration slows down the growth of bacteria and yeast, thereby increasing the shelf life of food items. The frozen food market is gaining popularity due to the abovementioned benefits. The global frozen food market was worth USD 273.20 billion in 2020 and is expected to grow at a CAGR of 5.98% between 2023 and 2030, going from US$ 311.80 billion in 2023 to US$ 472.20 billion in 2030.

Technological Advancements

The refrigeration sector has seen an improvement in performance due to the implementation of automated systems, resulting in reduced operational costs and greater productivity. The addition of automation and reduction in the dependency of manual labor shall improve the cost efficiency as well as the quality of the products. Frigo Plus is a trading company, dealing in cooling and refrigeration equipment. They also provide comprehensive automation systems for the operation of refrigeration plants. In a refrigeration plant, compressors, liquid levels in pressure vessels, system temperatures and pressures, liquid pumps, and so on are all controlled by PLC. These PLCs can be installed across the plant to guarantee the wellbeing of the parts and ideal working circumstances which converts into inconvenience free running of the framework and energy utilization streamlining.

Rise in Refrigerant Equipment Establishments

The commercial refrigeration equipment industry is experiencing rapid growth due to an increasing need for refrigeration systems. For an increasing number of establishments, food storage, and preservation become more critical than ever before. This is in order to maintain a competitive advantage and ensure quick delivery of products as compared to the other players in the market. Also, newer establishments being set up are adopting the latest trends and technologies for storing food items, which is an important driving factor for refrigerant equipment.

Significant Investments in Research and Development

Businesses are investing heavily in R&D to develop innovative refrigeration systems, which is helping the commercial refrigeration equipment companies industry expand their market share. Research and Development into product development as well as new product generation are leading to sustainable refrigeration solutions being introduced to the pre-existing market.

Commercial Refrigerant Equipment Market – Restraints

Temperature Regulation Issues

There might be a fault with the thermostat which regulates the temperature. In addition, your refrigerator equipment could also have dirty fans, a faulty compressor, refrigerant leaks, or limited airflow. This may lead to failure of the device while it is functioning at a specific supermarket or any other location. This means proper maintenance as well as AMC contracts may be needed for the smooth functioning of the refrigeration equipment.

Voltage Fluctuations and Wiring issues

If the power switch is on and there are no unattached power plugs, you may have to use a voltage detector to check the wall outlet and ground wires to eliminate the possibility of any problem with the wiring. Any form of excess voltage may lead to short circuiting or burning of the fuse which will damage the equipment. It is essential to ensure the voltage input and the voltage requirements of the refrigeration equipment is matching in order to avoid such failures and damages. One can check to see if there are any issues with the ground or wall outlet wires with a voltage detector. Any issues with the wiring must be addressed right away. The majority of manufacturers will void the warranty of the equipment if the refrigerator requires repair, so do not use extension cords.

Commercial Refrigerant Equipment Market – Opportunity

Rise in FMCG Storage Needs

Fast-Moving Consumer Goods or FMCG continues to influence markets across the globe. Consumers want cheap and easy products including pre-packaged food and beverages. As a result, demand for self-serve commercial refrigeration will continue to grow. From major grocery chains to fast-food restaurants and corner stores to hotel lobbies, the FMCG trend will increase demand for cold storage. Trends in refrigeration therefore will need to focus on easy access, high-efficiency cold storage that optimizes space, accommodates more inventory and makes it easy for customers to access the products they want. The India Government's Department of Commerce, Ministry of Commerce, and Industry established the India Brand Equity Foundation (IBEF), a trust. The primary objective of IBEF is to spread the word about Indian goods and services and to promote and raise international awareness of the Made in India label in international markets. To achieve this goal, IBEF collaborates closely with industry and government stakeholders. According to ibef.org, as of December 2022, the FMCG market was worth US$ 56.8 billion. From 2021 to 2027, the FMCG market is expected to see a CAGR of 27.9%, reaching nearly US$ 615.87 billion. In 2022, the rural segment of India contributed more than 35% of the total annual sales of FMCG, while the urban segment contributed 65%. Good harvest; in FY24, the government is expected to spend money to help rural demand recover. Last fiscal year, the industry's revenues increased by 8.5% and volume increased by 2.5%. In the January-June time of 2022, the area saw esteem development of around 8.4% by virtue of cost climbs because of inflationary tensions. In Q2, CY22, the FMCG area timed a worth development of 10.9% Y-o-Y — higher than the 6% Y-o-Y esteem development seen in Q1.

Eco-Friendly Refrigerants Development

Growing concern about the environment is also increasing demand for eco-friendly solutions right across the industry. This includes refrigeration which is infamous for contributing to ozone depletion due to the use of refrigerants containing hydrofluorocarbon (HFC).  As a result, natural refrigerants designed to combat climate change like ammonia or CO2 will soon become the norm. An increase in these sustainable options is a must as businesses continue to find ways to meet customer expectations, while also meeting their own environmentally friendly mandates. Lower global warming potential (GWP) will soon become a standard requirement across more provinces, states and countries.

Rise in On-The-Go Refrigeration Needs

Increasing global importing and exporting has subsequently increased demand for on-the-go refrigeration such as cooled van containers and shipping units. Long distance cold storage shipping capabilities will help support the growing international food trade, bringing a more diverse selection to consumers via restaurants as well as grocers. Foodie culture contributes to this demand as more people have become home cooks due to the pandemic. An interest in exotic flavors and ingredients will continue to push demand for foods that cannot be produced locally and affordably.

Global Commercial Refrigerant Equipment Market - Impact of Coronavirus (Covid-19) Pandemic

The growth of the Commercial Refrigerant Equipment market is directly proportional to the growth of the end-user market. The demand for products from the supermarkets and hypermarket industry, contributes to the growth of the refrigeration equipment market. COVID-19 had adversely affected the global retail chain industry, thereby affecting the demand for the Commercial Refrigerant Equipment market. The abrupt halt in the supply chain, production plants in the frozen food sector has led to the decline in demand for the refrigeration equipment.

Commercial Refrigerant Equipment is mainly used in the storing and preserving food and beverages. Any impact on these industries has a direct implication on the Commercial Refrigerant Equipment market. Due to a dip in food and beverage industry due to health concerns, the demand for Commercial Refrigerant Equipment has faced a decline globally.                                                                                                             

*Definition: Commercial refrigeration equipment refers to the cold storage equipment used in commercial settings.