Reports says the demand for commercial refrigeration equipment will continue to grow globally due to key drivers such as the rapid growth of e-commerce in China and India.
The demand for commercial refrigeration equipment will continue to grow globally, due to a number of key drivers, Abhay Sinha, analyst for research rm Technavio, tells RA.
“The commercial refrigeration market derives its demand from the red oceans of the top retailers across the globe,” he says. “These top retailers generate the major shares of their prots from hypermarket and supermarket sales.”
Technavio forecasts the worldwide growth of the supermarkets at a CAGR (compound annual growth rate) of 4.4% during 2015-2020, and “this drives the market for commercial refrigeration equipment”, says Sinha, who also reveals some key drivers for commercial refrigeration demands in Asia-Pacfic.
“The key driver in APAC via the retail channel is China’s continued rapid growth in e-commerce. Every segment of retail sales in China (department stores, convenience stores, supermarkets, hypermarkets, specialty stores and professional stores) experienced a minimum 6.5% CAGR in 2015,” he explains. “China’s YoY (year-over-year) growth for retail sales in hypermarkets and supermarkets was 7.4% and 11.6% respectively in 2015.”
Another growth country is India. “The e-commerce market in India is also expected to witness a growth of 21% during 2015-2020, driving the market in APAC,” Sinha says.
But retail growth per country is not the only driver. “One-third of the total food production in the world are perishables, which decay over time in the absence of proper refrigeration,” reveals Sinha. “Every year, about 30% of the overall food production gets wasted in developing regions such as APAC and Africa.
“Africa has the highest rate of the food wastage with 45%-48% of the food wasted due to the absence of refrigerators every year. Increasing the penetration of refrigeration equipment in the region can help preserve perishable food items and reduce food wastage. is will drive the demand for commercial refrigeration equipment in these regions during the forecast period.”
Global refrigerated transportation market also on the rise
On the other hand, according to Technavio’s Global refrigerated transportation market 2016-2020 report, the global refrigerated transportation market is set to grow from US$24.66 billion last year to US$34.52 billion by 2020. e report categorised the market by type of product transported — mainly Food, Pharmaceuticals, and Others.
Global refrigerated food transportation market
The food segment will continue to dominate the market; however, the share of this segment will decline from 46.47% last year to 46.04% by 2020. e following products are transported in refrigerated containers: Meat, seafood, milk and dairy products, vegetables and fruits, bakery and confectionery products, and controlled atmosphere condition products such as grains and oilseeds.
“The market generates a majority of its revenue through the refrigerated transportation of meat and meat products and dairy products as their demand is increasing globally. The demand mainly stems from developing countries, which account for about 36.34% of the world population,” says Sharan Raj, Technavio’s lead analyst, transportation and distribution.
According to the study, vegetables and fruits are the other food products delivered through refrigerated systems. These products are mainly transported through roadways. Respiration rate is one of the major factors to be considered during the transportation of vegetables and fruits. Vegetables and fruits with high respiration rates, such as sweet corn, lettuce and peas, require colder refrigeration to maintain the freshness and shelf life of the products. On the other hand, products with low respiration rates, such as onions and potatoes, require warmer refrigeration.
Global refrigerated pharmaceutical transportation market
The global refrigerated pharmaceutical transportation market is segmented into two: Biopharmaceutical refrigerated transportation and pharmaceutical refrigerated transportation. The biopharmaceutical refrigerated transportation segment accounted for the major share of the market last year, contributing 80% of the total revenue. The pharmaceutical refrigerated transportation segment mainly uses airways refrigerated transportation mode and accounts for 66.54% of the total revenue of airways refrigerated transportation.
Technavio’s findings indicate that global refrigerated pharmaceutical transportation market is experiencing a growing demand from cold chain pharmaceutical logistics services. is is because of the high demand for temperature-sensitive drugs globally. Raj says: “Another factor contributing to the demand for cold chain pharmaceutical logistics services is the shift of the manufacturing facilities of pharmaceutical companies towards developing countries such as China, Brazil and India.”
Global refrigerated other products transportation market
Although the global refrigerated other products transportation market accounted for the lowest share, it is growing at a fast rate, says Technavio. Other products that are transported through refrigerated containers are owers and chemicals. The growing floriculture industry is one of the major drivers of this market. The industry includes companies that are engaged in orist trade, nursery plants, extraction of essential oil from owners and bulb and seed production, adds the company. Flowers and plants need to be transported through refrigerated containers to ensure their shelf life.
For instance, after plucking, roses last three to ve days and carnation flowers last seven to 10 days, says Technavio. Most of the transportation of this market are done through airways and roadways, which cover 85% of total market. Regular flights, which have less freight space, carry owers because of their small volume and short shelf life. Seasonal and voluminous products are mainly carried through roadways.