Commercial Food Refrigeration Equipment Market Fueled by Changing Food Consumption Patterns
The increased demand for frozen foods and the growing number of food products that require refrigeration are expected to positively influence the growth of the commercial food refrigeration equipment market. This has led to the need for commercial food refrigeration equipment being used to minimize food wastage at both, production and distribution levels.
Commercial food refrigeration equipment has various end users such as hypermarkets, supermarkets, convenience stores, restaurants, warehouses, and food service industries, and demand is continuing to rise. Furthermore, with the rise in the number of restaurants and other food service outlets triggered by the heightened interest in indulgence, the rapid shift in food consumption patterns are also expected to have a positive impact on the development and evolution of the commercial food refrigeration equipment market.
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Push to Reduce Greenhouse Gases Causes Increased Acceptance of Natural Refrigerants
Rising global concerns about global warming caused by the emission of greenhouse gases have pushed for a global phasedown of hydrofluorocarbons (HFCs). The Kigali Amendment to the Montreal Protocol came into effect in Jan 2019, encouraging both, developing and developed counties to reduce the emission of man-made greenhouse gases. This has had a direct impact on the global refrigeration market, where the use of natural refrigerants is being encouraged in place of HFCs.
Natural refrigerants, which occur naturally in nature, are seen as an alternative to the synthetic refrigerants already in the market. The underlying trend of using these gases so as to employ lower climate impact solutions has already had an impact on the commercial food refrigeration equipment market as well, with manufacturers looking to develop newer solutions for reduced environment impact.
For instance, in December 2018, Carrier, a global leader in heating, air conditioning, and refrigeration solutions, launched Puron Advance – a refrigerant for light commercial products, as its primary lower Global Warming Potential (GWP) solution, replacing R-410A to minimize environment impact. The product has been marketed as a next-generation refrigerant, to surpass all the requirements of anticipated future regulations. It is set to be offered in all carrier products by the beginning of 2024.
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Stringent Food Safety Protocols to Positively Impact Market
According to the World Health Organization (WHO), 1 in 10 people fall sick from eating contaminated food, and food safety is considered a public health priority. At the storage level, prevention of an outbreak of food-borne diseases happens with the storage of food at wrong temperatures. Food Codes set forth by regulatory bodies such as the Food and Drug Administration (FDA) and Food Safety Standards Authority of India (FSSAI) that monitor the retail and food service industries require food to be stored at optimal temperatures prior to use and serving. Commercial food refrigeration is a critical aspect of ensuring the safety of food products and public health safety.
Commercial food refrigeration equipment plays a very important role in the preservation of perishable and semi-perishable foods, and the increasing stringency of these regulations is likely to have a positive impact on the growth of the commercial food refrigeration equipment market.
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Development of Equipment Powered by Renewable Sources of Energy
Appliance manufacturers around the world are increasingly focusing on the reduction of energy consumption and shifting towards appliances that run on renewable energy. Manufacturers in the commercial food refrigeration equipment market looking at equipment powered by solar thermal energy, which is also a strategy that is gaining traction.
Appliances that run solely on solar thermal power eliminate the carbon footprint of the appliance, making it an environment-friendly alternative to conventional commercial refrigerators. Companies such as SunDanzer Refrigeration Inc are involved in the production of efficient solar powered commercial refrigerators.
Penetration of Smart Refrigerators
The current trend of smart appliances, connected by the Internet of Things, has reached the refrigeration industry as well. This has resulted in the development of smart refrigerators for the residential sector becoming popular in recent times, with manufacturers such as Samsung, Haier, and Danfoss already at the forefront. However, the use of smart refrigerators in the commercial sector is low, which is suggestive of opportunities for manufacturers in the commercial food refrigeration equipment landscape.
Analysis of the Competitive landscape
The commercial food refrigeration equipment market is fragmented and highly competitive, with major players being established appliance manufacturers. Newer players are ushering in innovation and research & development for energy-efficient and environment-friendly appliances, shaping the landscape of the commercial food refrigeration equipment market. The market is continuing to evolve rapidly, even as it incorporates environmental concerns in the manufacture of commercial food refrigeration equipment.
From a geographical standpoint, Asia Pacific held the largest share of the global market with a third of the market share in 2018, closely followed by North America and Europe, a trend that is unlikely to change over the forecast period. Players in the region are looking to consolidate their geographical presence and addressing the increasing demand for commercial food refrigeration equipment in the region through mergers and acquisitions. Some of the key developments in the landscape include:
- In November 2018, Danfoss, a market leader in refrigeration, air conditioning, heating, motor control, and off-highway machinery manufacturing and distribution, announced its acquisition of AAIM Controls Inc, a leader in the industrial refrigeration market. This moves propelled Danfoss into a strong position in the commercial food refrigeration equipment market.
- In April 2019, Standex International Corporation, a multinational manufacturer of food service equipment, announced the acquisition of Genius Solutions Engineering Company, a market leader in the manufacture of highly specialized ‘soft surface’ skin texturized tooling, a move that strengthens Standex’s global presence.
Companies are also looking to expand their geographical presence by expanding operations into emerging markets in the commercial food refrigeration equipment landscape, making deeper inroads into regional market. For instance, Bluestar Ltd., a major consumer appliance player in the APAC region, announced the expansion of its operations to Dubai, with the inauguration of a new office and state-of-the-art showroom.
- According to Transparency Market Research’s latest market report on the commercial food refrigeration equipment market for the historical period of 2017-2018 and forecast period of 2019-2027, robust growth in the commercial food industry is expected to boost the growth of the global commercial food refrigeration equipment market during the forecast period.
- Globally, revenue generated by the commercial food refrigeration equipment market is estimated to reach ~US$ 34 Bn in 2019, and expand at a CAGR of ~6% in terms of value throughout the forecast period.
Robust Growth in Commercial Food Industry: A Key Driver
- Rising incomes, growing interest in ethnic and international cuisine, and changing lifestyles are expected to continue to drive the growth of the commercial food refrigeration equipment market. Therefore, industry players are making strides in freezing technologies, which is anticipated to support market growth during the forecast period
- The growing demand for food items requiring refrigeration has also led to the increased demand for commercial food refrigeration equipment. This demand has impacted all the sectors of food service, retail, and production, positively.
- The growing number of restaurants, hotels, and other food service outlets, which aim to cater to the needs of international tourists, has contributed to the growth of the commercial food refrigeration equipment market across the globe. The growing number of supermarkets, which have become the primary source for the sales of food and beverage products all over the world, has also impacted the commercial food refrigeration equipment industry in a positive manner.
- Consumers are attracted to large supermarkets, creating opportunities for large retail chains to meet the demand for frozen products. The increased number of outlets would generate demand for commercial food refrigeration equipment. These factors influence the growth of the commercial food refrigeration equipment market.
Technological Developments Drive Replacement of Conventional Refrigeration Equipment
- Conventional food refrigeration equipment consumes more electricity as compared to advanced commercial food refrigeration equipment. Refrigeration is used in every stage of the food chain, from food processing to distribution and retail. The food industry employs both, freezing and chilling processes for the cooling of food from ambient to temperatures above 0 degree Celsius, to slow down the microbiological, physical, and chemical activities that cause deterioration in foods.
- However, the development of smart sensors for temperature control, growth of magnetic refrigeration systems (an upcoming development in commercial food refrigeration equipment that is expected to save 20% – 30% of the total energy consumption, as reported by the U.S. Department of Energy), air cycle refrigeration (the technology helps produce low temperatures for refrigeration by subjecting the gaseous refrigerant to a sequence of processes comprising compression for rapid chilling or freezing), and other such innovations are set to assist in bringing down energy bills.
- Manufacturers and service providers are anticipated to shift to highly-developed, technologically-advanced systems. Thus, technological advancements are driving the commercial food refrigeration equipment market.
Increasing Consumption of Processed Food and Beverages
- Asia Pacific has seen swift growth in the consumption of packaged food and beverages in recent years. Increasing disposable income and improved quality of processed food are the key growth drivers of food and beverage chains.
- Moreover, the increasing number of restaurants, supermarkets, and cafes has contributed crucially to the growth of commercial refrigerators and freezers. In addition, the rising involvement of global retail giants such as Walmart (the U.S.), Tesco (the U.K.), Carrefour (France), and Metro (Germany) in Asia Pacific is likely to bolster the growth of the commercial food refrigeration equipment market. Furthermore, favorable government norms in the retail sector are likely fuel the growth of the commercial food refrigeration equipment market in Asia Pacific.
- According to the Food Export Association of the Midwest USA and Food Export USA – Northeast, China is the world’s largest producer, consumer, and importer of fishery products, and handles more than 35% of global seafood production. This, in turn, is driving the demand for commercial refrigerators and freezers as a means of storing seafood.
Commercial Food Refrigeration Equipment Market: Competition Landscape
- The commercial food refrigeration equipment market is dominated by a few major players. However, small and local players also exist, leading to high competition. Key players are mainly investing in collaborations, research & development activities, and product innovation to strengthen their presence in the commercial food refrigeration equipment market.
- Key vendors operating in the global commercial food refrigeration equipment market include
- Blue Star Limited
- Daikin Industries, Ltd.
- Danfoss A/S
- Dover Corporation
- Hussmann International, Inc.
- Illinois Tool Works, Inc.
- Lennox International, Inc.
- Metalfrio Solutions SA
- Standex International Corporation
- Carrier Corporation
Global Commercial Food Refrigeration Equipment Market: Key Developments
Key competitive players in the commercial food refrigeration equipment market, such as Daikin Industries, Ltd., Illinois Tool Works, Inc., Carrier Corporation, Dover Corporation, and Danfoss A/S, are strengthening their overseas sales structure by increasing their product portfolios for multiple commercial food industry applications.
Some other key developments in the commercial food refrigeration equipment market are as follows:
- Blue Star Limited is collaborating with committed business partners to expand its business beyond the border by promoting itself to be a promising player in the commercial food refrigeration equipment market. The company also provides aftersales services with the help of its trustworthy partners to satisfy end users and improve its business relations. The company is also focused on exploiting opportunities and expanding its product portfolio.
- In May 2019, Heatcraft Worldwide Refrigeration, a subsidiary of Lennox International, Inc., received the ‘Large Manufacturer of the Year’ award at the 2019 Movers & Makers award ceremony.
- Companies such as Daikin Industries, Ltd. Carrier Corporation, and Dover Corporation are emphasizing on expansion of their business all over the globe by launching new innovative products through the adoption of advanced technology. In addition, these companies offer post sales services to fulfil the requirements of end users.
In the global commercial food refrigeration equipment market report, we have discussed individual strategies, followed by the company profiles of players active in the commercial food refrigeration equipment market. The ‘Competitive Landscape’ section included in the commercial food refrigeration equipment market report provides readers with a dashboard view and company market share analysis of key players.
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