Demand for commercial refrigeration equipment in the U.S. is forecast to rebound through 2014, growing 7.2% per year (including price increases) to $9.4 billion, according to a new report by The Freedonia Group, Cleveland, OH.
Demand in 2009 was drastically impacted by the US recession, which caused food industry participants to postpone capital improvements and expansions. Advances will result from an improving capital investment outlook, as economic recovery encourages end users to renovate or expand existing facilities. Consumers’ busy lifestyles will also continue to spur gains, as retailers offer a wider range of convenient “grab and go” options, as well as a broader variety of frozen foods.
Consumers’ busy lifestyles will also continue to spur gains, as retailers offer a wider range of convenient “grab and go” options, as well as a broader variety of frozen foods.
According to the study, growth will be strongest for transportation refrigeration equipment, which will post double-digit gains. Even more so than other categories, demand for these products was devastated by the poor capital investment environment in 2009. Fleet operators, faced with narrow profit margins, postponed fleet expansions and upgrades due to the high per-unit cost of new equipment.
Demand for beverage refrigeration equipment and ice machines will benefit from the rising number of eating and drinking establishments. Display cases, especially models that offer mobility and flexibility, will post improved gains. Demand in all product categories serving food related markets will be strongest for equipment that is energy efficient, as companies throughout the entire food industry will seek to reduce operation costs.
Rising medical research expenditures will spur demand for cryogenic equipment.
The distribution market will post the strongest gains of any segment through 2014, reflecting recovery in fixed investment levels by fleet operators. Foodservice is expected to remain the largest market for commercial refrigeration equipment through 2014, as Americans will continue to spend nearly one-half of their food budget outside the home. Opportunities in the retail market will result from the rising number of food retailers. In addition, the average amount of floor space at food retail outlets will rise, creating potential for more refrigeration equipment per store.
The Commercial Refrigeration Equipment survey is available for purchase at www.freedoniagroup.com