US Commercial Refrigeration Market 2024–2033

Reports Description

According to current market research conducted by the CMI Team, the US Commercial Refrigeration Market is expected to record a CAGR of 7.89% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 12.63 Billion. By 2033, the valuation is anticipated to reach USD 25.02 Billion.

Global Commercial Refrigeration Market by Type:

Source: United Nations Environment Programme – United for Efficiency (U4E)

Commercial refrigeration refers generally to non-domestic (non-household) refrigerators used in the retail and food service sectors for storage or display of foodstuffs. A shift in consumer shopping in supermarkets to smaller supermarkets and convenience stores drives RDC demand. Also, growing e-commerce is driving large cold-storage demand. RDCs tend to be produced locally owing to their relatively large size variations in specifications in each region, and customized delivery.

Also, innovations in commercial refrigerators, offering efficiency, convenience, and enhanced capabilities, are poised to capitalize on evolving consumer preferences and maintain momentum in the market despite economic challenges. These innovations include advancements in energy efficiency, smart control systems, and the use of eco-friendly refrigerants, which are essential for meeting regulatory standards and consumer expectations.

As industries continue to prioritize sustainability and operational efficiency, the commercial refrigeration market is well-positioned to leverage these trends for sustained growth.

Commercial Refrigeration Market – Significant Growth Factors

The US commercial refrigeration market presents significant growth opportunities due to several factors:

• Consumer Preference for Convenience: The fast-paced modern lifestyle has heightened the demand for convenient refrigeration solutions. Commercial refrigeration units, strategically placed in high-traffic areas like grocery stores, restaurants, and convenience stores, offer quick and accessible cooling and storage options for consumers and businesses, ensuring food safety and quality.

• Rising Popularity of Fresh and Ready-to-Eat Food: There is a notable rise in the popularity of fresh and ready-to-eat food, driven by a growing appreciation for healthy and convenient meal options. This trend is particularly pronounced among younger demographics, including millennials and Gen Z, who prefer fresh food with minimal preparation time. Commercial refrigeration plays a crucial role in maintaining the freshness and safety of these food items.

• Urbanization and Infrastructure Development: Rapid urbanization and infrastructure development in major cities create opportunities for commercial refrigeration units to cater to busy city dwellers and businesses needing efficient and reliable cooling solutions. This includes supermarkets, convenience stores, and food service establishments that require high-performing refrigeration systems to meet the demands of urban populations.

• Cost-Effectiveness: Commercial refrigeration units are a cost-effective solution for businesses, as they reduce food spoilage and waste, ensuring longer shelf life and freshness of perishable items. The investment in advanced refrigeration technologies can lead to significant cost savings in the long run, making it an attractive option for businesses of all sizes.

• Entrepreneurial Opportunities: The relatively low barriers to entry and the availability of prime locations for setting up refrigeration units attract aspiring entrepreneurs and businesses. This fosters innovation and creativity in refrigeration solutions and business models, such as pop-up cold storage units and mobile refrigeration services.

• Growing social media and Digital Marketing: Social media platforms have played a pivotal role in the success of businesses utilizing commercial refrigeration. Operators can use platforms like Instagram, Facebook, and Twitter to connect with customers, build brand awareness, and drive sales. Sharing images of fresh produce, ready-to-eat meals, and other refrigerated items helps attract and retain customers, creating a loyal and engaged customer base.

• Growing Popularity of Themed Refrigeration Solutions: The increasing popularity of themed refrigeration solutions, such as eco-friendly and energy-efficient units, caters to niche markets and creates opportunities for operators to offer unique and memorable experiences. These innovations align with consumer demand for sustainability and environmental responsibility.

These factors collectively drive the growth and expansion of the US commercial refrigeration market, providing numerous opportunities for businesses to thrive and meet the evolving needs of consumers.

Commercial Refrigeration Market – Mergers and Launches

The Commercial Refrigeration market has seen several mergers and acquisitions in recent years, with companies seeking to expand their market presence and leverage synergies to improve their product offerings and profitability. Some notable examples of mergers and acquisitions in the Commercial Refrigeration market include:

• In December 2023, Haier Smart Home entered into a stock purchase agreement with Carrier Global Corporation to acquire Carrier’s Commercial Refrigeration Business by acquiring 100% of the equity interest in Carolin Holdings B.V. Carrier, for a total consideration of approximately USD 640 million, which represents 11x 2022A P/E. The Transaction marks Haier Smart Home’s expansion from its existing household refrigeration business into the commercial refrigeration business, creating additional future growth opportunities. Carrier Commercial Refrigeration is a leading global commercial refrigeration solutions provider, with more than 4,000 employees, including over 2,000 service technicians in more than 10 countries worldwide.

• In December 2023, Carrier Global Corporation, a global leader in intelligent climate and energy solutions, entered into a definitive agreement to sell its global commercial refrigeration business to its decades-long joint venture partner Haier for an enterprise value of $775 million, including approximately $200 million of net pension liabilities. This represents about 16.5x 2023 expected EBITDA. This follows the agreement to sell Carrier’s Global Access Solutions business and marks another meaningful step forward in the company’s portfolio transformation. Definitive agreements are now in place to exit businesses representing about half the EBITDA Carrier is divesting.

• In January 2023, Liebherr Refrigerators and Freezers introduced multiple new products at the 2023 Kitchen & Bath Industry Show meeting industry needs with sustainable technology. The new refrigerators and freezers have been developed to achieve high levels of energy efficiency, longer service life and reduced food waste through BioFresh technology, which keeps food fresher for longer than ever before.

These mergers and acquisitions helped companies expand their product offerings, improve their market presence, and capitalize on growth opportunities in the Commercial Refrigeration market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

Commercial Refrigeration Market – Significant Threats

The US commercial refrigeration market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Growing Online Food Delivery Services: Online food delivery platforms have significantly changed consumer behaviour, fostering a preference for on-demand delivery over traditional in-person shopping or dining experiences. This shift reduces foot traffic to establishments that rely on commercial refrigeration, potentially limiting their revenue.

• Higher Competition from Other Players: Businesses using commercial refrigeration now contend not only with direct competitors but also with a growing number of restaurants and grocery stores partnering with online delivery services. This heightened competition makes it harder for traditional retail and food service businesses to attract and retain customers.

• Seasonal and Weather Dependency: Operations involving commercial refrigeration are often affected by seasonal factors and adverse weather conditions. For instance, ice cream shops and other businesses may see fluctuating sales depending on the season or weather, impacting overall revenue.

• Limited Operating Hours and Locations: Businesses that rely on commercial refrigeration may face restrictions on operating hours imposed by local regulations or logistical challenges. Limited access to prime locations with high foot traffic can also constrain revenue opportunities for these businesses.

• Limited Access to Financing: Securing financing and capital investment can be challenging for businesses in this sector, especially those with limited credit history or collateral. Banks and lenders may perceive these businesses as high-risk ventures, leading to difficulties in obtaining loans or lines of credit.

• Health Concerns and Food Safety Perceptions: Despite stringent health and safety regulations, some consumers may perceive certain businesses, such as Commercial Refrigeration, as less hygienic compared to traditional brick-and-mortar establishments. Negative perceptions related to food safety or cleanliness issues can deter potential customers and undermine trust in these businesses.

Category-Wise Insights:

By Product Type

• Refrigerators and Freezers: These are the workhorses of commercial kitchens and food storage, available in various sizes and configurations to meet specific needs. (Ex: Walk-in coolers for bulk food storage, reach-in refrigerators for prep areas)

• Refrigerated Display Cases: Designed to showcase and maintain the freshness of chilled food and beverages for customer selection. Different types cater to specific products like meat, bakery items, or deli foods. (Ex: Open multi-deck display cases for supermarkets, vertical glass-door freezers for ice cream)

• Beverage Refrigeration: Specialized equipment for storing, chilling, and dispensing beverages, including coolers, under counter units, and beer dispensers. (Ex: Reach-in bottle coolers for convenience stores, keg coolers for bars)

• Ice Machines: Produce and dispense ice in various forms for food service applications and customer consumption. (Ex: Flake ice machines for restaurants, under counter ice cube makers for hotels)

• Others: This category includes a variety of specialized equipment like food prep counters, salad prep refrigerators, and bakery display cases. (Ex: Sushi display cases with built-in refrigeration)

By Application

• Food Service: Restaurants, cafes, hotels, and catering companies rely heavily on commercial refrigeration to store ingredients, prepare food, and keep finished dishes chilled.

• Food and Beverage Retail: Supermarkets, hypermarkets, and convenience stores require a variety of equipment to display and preserve chilled and frozen goods for customer purchase.

• Healthcare: Hospitals, clinics, and laboratories use commercial refrigerators and freezers for storing vaccines, medications, and other temperature-sensitive medical supplies.

• Hotels and Hospitality: Hotels utilize commercial refrigeration for back-of-house food storage, in-room mini-fridges, and beverage dispensing in bars and restaurants.

• Other Applications: This includes florists using refrigerated display cases for flowers, convenience stores needing ice cream freezers, and laboratories requiring specialized units.

By Capacity

• Small Capacity: Compact refrigerators and freezers for smaller spaces, often found in convenience stores, cafes, or hotel rooms.

• Medium Capacity: Commonly used equipment for restaurants, food prep areas, and back-of-house storage in supermarkets.

• Large Capacity: High-volume walk-in coolers and freezers for bulk food storage in warehouses, supermarkets, and food processing facilities.

By Technology

• Self-contained Refrigeration Units: Standalone units with integrated compressors and condensers, ideal for smaller spaces or simple applications. (Ex: Undercounter beverage coolers)

• Remote Condensing Units: Refrigeration systems where the condenser unit is located remotely, typically outdoors, for quieter operation and better heat dissipation in larger installations. (Ex: Walk-in coolers with rooftop condensers)

• Smart Refrigeration: Emerging technology incorporating features like remote monitoring, temperature control adjustments through apps, and energy-saving functionalities. (Ex: Wi-Fi connected refrigerators with real-time temperature alerts)

Report Scope

Competitive Landscape – Commercial Refrigeration Market

The US Commercial Refrigeration market is highly competitive, with a large number of manufacturers operating across the US. Some of the key players in the market include:

• Carrier Commercial Refrigeration Inc.
• Danfoss
• Emerson Electric Co.
• Dover Corporation
• True Manufacturing Co. Inc.
• Hillphoenix Inc.
• Hussmann Corporation
• Johnson Controls Inc.
• Lennox International Inc.
• Evapco Inc.
• Güntner GmbH & Co. KG
• Ingersoll-Rand plc
• Baltimore Aircoil Company
• Rivacold America
• Rosenberg USA Inc
• Others

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships.

New players entering the Commercial Refrigeration market are adopting innovation and development to differentiate themselves and gain traction. These players often focus on various technology adoption, and customization, and adoption of more sustainable and eco-friendly practices.

Commercial Refrigeration operators are leveraging technology to streamline operations, enhance customer engagement, and expand their reach. These players often focus on developing advanced products, customization, targeting emerging markets, establishing competitive pricing, and higher focus on marketing and branding activities.

The US Commercial Refrigeration Market is segmented as follows:

By Product Type

• Refrigerators and Freezers
• Refrigerated Display Cases
• Beverage Refrigeration
• Ice Machines
• Others

By Application

• Food Service
• Food and Beverage Retail
• Healthcare
• Hotels and Hospitality
• Others

By Capacity

• Small Capacity
• Medium Capacity
• Large Capacity

By Technology

• Self-contained Refrigeration Units
• Remote Condensing Units
• Smart Refrigeration