The global refrigeration equipment market is set to grow at a 6.1% CAGR clip over the next several years, but growth will likely be hampered by high initial costs and by subsequent repair costs.
Those are among the findings of a new report by Bangalore, India-based market research specialist Business Research Co., "Commercial Refrigeration Equipment Global Market Report 2021: COVID-19 Impact and Recovery to 2030."
The refrigeration equipment market grew at a slow rate of 1.9% CAGR from 2020 to 2021, reaching $60.4 billion, largely due to Covid impact.
“The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges,” according to the report.
Going forward, however, growth should recover, averaging 6.1% CAGR to hit $76.6 billion in 2025.
“The increasing demand for frozen and chilled products from consumers is anticipated to drive the commercial refrigeration market,” according to the report. “Preference for frozen and chilled products have increased due to changing lifestyle, accelerated urbanization, and benefits offered by frozen products such as longer shelf life, convenience, reduced food preparation and cleanup time.”
Frozen and chilled products stored in commercial refrigerators in supermarkets, hypermarkets, and refrigerated trucks are likely to generate a higher requirement for commercial refrigeration equipment for storing, which propels the growth of the market.
That growth, however, will be tempered by high equipment, installation and repair costs of equipment, according to the report.
“For instance, the total cost of the walk-in cooler including installation ranges from $3,000 to $9,000. In addition to this, the average cost of commercial refrigeration equipment repair falls between $100 and $325. This high cost of the equipment, installation, and maintenance are extremely unaffordable to smaller retailers who rent these services or opt for non-commercial variants, which hinders the growth of the commercial refrigeration equipment market.”
Companies are concentrating on incorporating the latest technologies such as artificial intelligence, 5G, and machine learning into the commercial refrigeration equipment for decreasing electrical consumption, improved preventive maintenance, and better customer experience, according to the report.
As an example, Axiom Cloud and Turntide Technologies collaborated to stimulate AI in commercial refrigeration, and Axiom will license divisions of its IoT infrastructure to Turn tide to support Turntide's mission to reduce the 25% of global electricity consumption that is misused by legacy motors.
In addition, UTStarcom has launched the goBox together with China Mobile Group Zhejiang Company (Hangzhou), its first 5G-powered smart commercial refrigerator. With its smart vending machine, goBox created a new way of shopping with an enhanced buying experience, driving greater consumption per transaction. The device is enabled by a powerful system platform supported by 5G, mobile cloud, and artificial intelligence.
Another refrigeration pioneer, Daikin Industries Ltd., a Japan-based manufacturer of air conditioning units HVAC-R systems, filtration systems, and chemicals, through its subsidiary Daikin Europe NV, has acquired AHT Cooling Systems GmbH. This acquisition has enabled Daikin Industries to be a one-stop provider offering complete coordination of air conditioning and refrigeration products as it has added AHT Cooling Systems GmbH products and services relating to air conditioning and commercial equipment.
It also strengthens the expansion of Daikin Industries in Europe, and natural refrigerant portfolio as AHT Cooling Systems GmbH focuses on natural refrigerant like propane-based equipment. AHT Cooling Systems GmbH is an Austria-based provider of refrigerator and freezer systems for retail and industry.