Aug 1, 2008 12:00 PM

US demand for commercial refrigeration equipment is forecast to rise nearly 4% annually through 2012, reaching $9.2 billion. This is slower than the historical pace, due to rising fuel and food prices, which are increasing costs for food industry participants (such as distributors, retailers, and restaurants) at a time when consumers are increasingly cost-conscious.

These factors are combining to narrow profit margins, which will discourage many operators from investing in new equipment.

These are among the findings of Commercial Refrigeration Equipment, a study done by business research firm Freedonia Group.

The study found that commercial refrigeration products expected to experience the best demand growth, including transportation equipment and display cases.

“Transportation refrigeration equipment will continue to be the largest product segment, due to the high unit cost of this equipment, and to the rising level of refrigerated food shipped within and from the US,” the study report said. “Gains in this segment, however, will be adversely affected by high fuel prices, which will continue to affect profit margins for fleet operators.”

Meanwhile, the need for refrigerated display cases will increase as retailers turn to new, aesthetically pleasing displays to encourage impulse purchasing. In addition, the number of display cases per store is expected to climb as the average size of food stores rises.

The study report also said that foodservice is expected to remain the largest market for commercial refrigeration equipment through 2012. “About 49% of consumer food expenditures in 2007 occurred outside the home at foodservice outlets such as restaurants, bars, and cafeterias, and this share is expected to rise.”

The food and beverage retail market will post gains, the study found, due to the rising number of food retailers. Further, consumers' growing appetite for a widening range of refrigerated foods will increase the amount of refrigeration equipment per store.

To order a copy of the Commercial Refrigeration Equipment study, contact the Freedonia Group by phone, (440) 684-9600, or email, pr@freedoniagroup.com.