Commercial Refrigeration Equipment Demand to Reach $9.4 Billion

Demand for commercial refrigeration equipment in the US is forecast to increase 4.6 percent per year to $9.4 billion in 2016.  Growth will result from improvements in capital investment and nonresidential construction expenditures.  In addition, a positive outlook for the broader US economy will encourage end users such as fleet operators and retailers to both expand existing operations and replace aging equipment.  Food industry efforts to reduce operating costs, a byproduct of narrow profit margins, will create opportunities for suppliers of energy efficient equipment.  These and other trends, including market share and product segmentation, are presented in Commercial Refrigeration Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.  

Transportation refrigeration equipment will remain the largest commercial refrigeration equipment type, benefiting from the positive outlook for capital investment.   In addition, product innovations such as hybrid electric systems and products that utilize natural refrigerants like carbon dioxide will stimulate sales.  Ice machines will also record above average growth due to increased construction of hotels and motels, which are major end users of this equipment.  Additionally, ice machines will benefit from the rising number of foodservice establishments and from technical innovations like remote monitoring.

Gains in all markets will benefit from users’ desire to increase efficiency, due to the narrow profit margins throughout the food industry.  Aftermarket sales of commercial refrigeration equipment, which consist of both repairs and products purchased to replace existing equipment, accounted for 73 percent of demand in 2011 and will continue to comprise the majority of demand.

Food and beverage distribution is expected to post the most rapid growth of any commercial refrigeration equipment market through 2016, increasing at a yearly rate of 5.9 percent.  Gains in the distribution market will result from increased spending on equipment by fleet operators.  Foodservice will remain the largest market for commercial refrigeration equipment, as Americans continue to spend around one-half of their food budgets outside the home.  Advances in the retail market will come from a rising number of food stores with an increasing amount of floor space.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.