Global Commercial Refrigeration Equipment

Report Overview

China is expected to register strong growth throughout the 2023-2028 period.

This Freedonia industry analyzes the more than $40 billion global commercial refrigeration equipment market. It presents historical supply and demand data (2013, 2018, and 2023) and forecasts (2028 and 2033), as well as annual data for the 2020-2027 period. Commercial refrigeration equipment demand by product (display cases, reach-in and walk-in refrigerators and freezers, beverage refrigeration equipment, ice machines, refrigerated vending machines, other commercial refrigeration equipment, and replacement parts) is presented in value terms. The study also presents product demand by market (food and beverage retail, foodservice, food production, and other markets). The study also evaluates company market share and competitive analysis on industry competitors, including Ali Group, Daikin Industries, Dover, Epta, Haier Group, Hoshizaki, Panasonic, and Sanden Retail Systems. It also presents market share data by product and region. Data are provided in US dollars.

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Global demand for commercial refrigeration equipment is forecast to increase 5.4% per year to $52.9 billion in 2028. In real terms, growth is expected to accelerate due to:

• rising personal incomes, allowing for increased consumer spending on frozen and refrigerated products

• advances in manufacturing activity, particularly food and beverage and pharmaceutical production

• the construction of new stores, restaurants, shopping centers, airports, hotels, resorts, research facilities and other nonresidential buildings that employ refrigeration equipment

In addition, market value will be supported by the ongoing shift to higher value, more advanced models in order to meet new technical standards and environmental regulations.

Nearly 70% of Gains to be Concentrated in the Asia/Pacific Region & North America

The Asia/Pacific region and North America are expected to account for 37% and 32% of new global commercial refrigeration equipment demand through 2028, respectively:

• Demand in the Asia/Pacific region will be driven by China, which is expected to account for nearly half of Asia/Pacific market gains through 2028 as the country’s output of food and beverages and pharmaceuticals grows at a healthy pace. The region will also see above average growth among a number of developing refrigeration equipment markets, such as India and Indonesia.

• Gains in North America will be driven by the US, where an improved outlook for nonresidential building construction will boost demand for refrigeration equipment in hotels, restaurants, educational buildings, and healthcare facilities.

The Commercial Refrigeration Equipment Market to be Heavily Impacted by New Regulations

Many countries are expected to adopt new technical standards, safety rules, and environmental regulations by 2028. These new standards will support technological innovation, in turn raising equipment prices while also spurring product sales. Because refrigeration machinery has a major impact on the environment, the adoption of new environmental regulations will continue apace:

• The EU adopted the new F-gas Regulation (EU) 2024/573 in February 2024. Building on its predecessors, the regulation was designed to phase out hydrofluorocarbons (HFCs), which are used in some refrigerants. Additionally, the EU is also looking at phasing out per- and polyfluoroalkyl substances (PFAS) which are used in some refrigerants. A proposal on a phase out is likely in the near term.

• The American Innovation and Manufacturing Act of 2020, administered by the US Environmental Protection Agency (EPA), aims to reduce the production and consumption of hydrofluorocarbons (HFCs) by 85% by 2036. As part of these regulations, manufacturers are transitioning to alternative refrigerants.

International Trade

While international trade of commercial refrigeration equipment is fairly extensive, it is still less prevalent than in many other durable goods manufacturing industries, as these products are often heavy and costly to ship. As a result, the industry is characterized by a number of regional production hubs that dominate trade markets in nearby countries. Major exporters in their respective regions include:

• China, South Korea, and Thailand in the Asia/Pacific region

• France, Germany, Italy, and a handful of other countries in Western Europe

• The US and, to a lesser extent, Mexico in North America

• Turkey in the Africa/Mideast region

• Brazil in Central and South America

While some wealthy high income nations are major exporters of commercial refrigeration equipment, most tend to be net importers of these products, as the relative simplicity of the technology involved has enabled shifts in production to developing countries with low labor costs (e.g., the shift from Western Europe to Eastern Europe).

Since 2000, major multinationals from the US, Western Europe, Japan, and South Korea increased their investment in manufacturing facilities in developing nations to take advantage of their fast-growing local markets and then to use lower production costs common in these countries to increase exports to neighboring nations. As foreign participation increased in industrializing nations, product development accelerated and investment in technological innovation. The rise in foreign investment reduced the reliance of some developing countries on external sources of supply (e.g., Thailand, Turkey).

Through 2028, the trade surplus of the Asia/Pacific region, Eastern Europe, and Western Europe are expected to increase:

• The Asia/Pacific region’s trade surplus is expected to increase sharply through 2028 as its manufacturers continue to dominate the regional market and ramp up exports to other regions. Inflows of foreign capital and accelerating product development will also contribute to the improvement in the region’s trade position.

• Western Europe’s mature commercial refrigeration equipment industry is at the forefront of technological innovation, which will allow them to continue to dominate the regional market and increase exports to other parts of the world. Regional producers will benefit from the eventual stabilization of the conflict in Ukraine, rising domestic product sales, and additional export sales opportunities around the world. However, suppliers based in the area will also continue to invest in overseas production capacity.

• Eastern Europe will also see its trade position improve between 2023 and 2028 as manufacturers benefit from a rebound in domestic product sales and improving market conditions in Western Europe. They will also benefit from additional exports sales opportunities in other parts of the world. The quality of locally made machines will also continue to improve, boosting the international competitiveness of East European producers. However, sales of imported equipment will rise at a swift pace as market conditions improve throughout the region.

Food & Beverage Industry Trends

Food & Beverage Production

Food production settings include both farms (which use commercial refrigeration equipment in the production of dairy, meat, and produce) and processing plants (which utilize commercial refrigeration equipment to maintain low temperatures during production). Major food and beverage product types include:

• baked goods

• beverages (e.g., beer, wine, soft drinks, and milk)

• candy and confections

• dairy products

• fats and oils

• frozen food

• meat and related products

• pet food

• processed fruit and vegetables

• snack food

Among the types of commercial refrigeration equipment used by manufacturers of food and beverage products – for both production and storage – are:

• ice machines

• liquid chillers

• reach-in and walk-in refrigerators and freezers

Global food and beverage manufacturing value added is forecast to expand 3.2% per year through 2028 to nearly $4.0 billion, exceeding the 2018-2023 rate of growth. The Asia/Pacific region is expected to account for 65% of all gains during this time, supported by:

• population, personal income, and consumer spending growth

• the adoption of more sophisticated farming techniques and the increasing use of machinery by farmers, leading to an increase in the availability of higher quality, processed and unprocessed agricultural commodities

• evolving consumer preferences

• additional foreign investment in both new and existing production facilities

In the Africa/Mideast region, market gains will be driven by many of the same trends, although the rate of growth will lag that of the Asia/Pacific region, reflecting its less favorable economic outlook.

After Central and South America’s food and beverage industry performed poorly during the 2013-2023 period – due to political and economic turmoil – conditions in the food and beverage industry will improve going forward as personal incomes rise and inflows of foreign capital increase.  The outlook for Eastern Europe is also expected to improve through 2028 as the war in Ukraine stabilizes.

Food and beverage output is forecast to expand less than 2.0% per year in Western Europe, and North America between 2023 and 2028. Both regions already have mature food and beverage industries and high levels of product shipments, and sophisticated processing technologies are used widely – factors that will dampen both regions’ growth potential.

Demand by Product

Worldwide demand for commercial refrigeration equipment is forecast to climb 5.4% per year to $52.9 billion in 2028. All product segments have favorable growth prospects during the forecast period because a number of important trends are expected to fuel gains in multiple segments, including:

• rising personal incomes and increasing consumer spending on frozen and refrigerated products

• technological innovation and the adoption of new regulations, both of which will fuel price growth

• the large replacement needs of mature markets and an ongoing shift to more advanced models in developing markets

• the construction of new stores, restaurants, shopping centers, airports, hotels, resorts, research facilities and other nonresidential buildings

• expansion in both the food retail and foodservice markets

The display case segment is expected to account for 24% of global market gains through 2028, as the number of food retailers increases and foodservice revenues continue to rise. The introduction of new models will also be a leading driver of market value growth.

Advances for refrigerated vending machines will trail the global average, as traditional cash-based vending machines are falling out of favor in developed countries with the increasing use of self-checkout systems in micro market vending setups.

Worldwide sales of replacement parts are expected to climb 4.9% per year as the amount of commercial refrigeration equipment in use globally expands. The ongoing shift to more advanced, better performing machines will drive sales of higher priced, more sophisticated parts.