Refrigeration and Air Conditioning Compressors Market - Key Research Findings
- The global refrigeration and air conditioning compressors market size in 2019 is estimated to reach ~US$ 32 Bn.
- The refrigeration and air conditioning compressors market is expected to grow at a CAGR of ~3% over the forecast period of 2019-2029.
- Increasing demand for rotary vane compressors is driving the sales of refrigeration and air conditioning compressors.
- North America and Europe, collectively, are likely to account for half of the revenue share in the refrigeration and air conditioning compressors industry by the end of 2029.
- East Asia, attributing to the rapid growth of the food & beverages industry, will continue to be a rapidly growing market for refrigeration and air conditioning compressors manufacturers.
- The residential sector is expected to remain a prominent application area to invest in, for refrigeration and air conditioning compressors market players.
- Noteworthy application potential of refrigeration and air conditioning compressors has been identified in commercial sectors, especially foodservice industry.
Key Factors Shaping the Refrigeration and Air Conditioning Compressors Market
Increasing Trading of Frozen Food in the Global Refrigeration and Air Conditioning Compressors Market
Growing capital investment for food preservation during transportation, distribution, and production is expected to drive the food shipment industry. Increasing applications of refrigeration and air conditioning compressors in horticulture and seafood processing is expected to boost the demand for refrigeration and air conditioning compressors.
Furthermore, to reduce the wastage of food products, the cold supply chain infrastructure is growing at a significant rate across the globe creating demand for refrigeration and air conditioning compresses. Owing to the strong cold supply chain infrastructure and warehouses in emerging economies, the food trade is increasing at a significant rate. This leads to the growing demand for commercial refrigeration systems and products in the industry.
Introduction of Packaged Solutions and Value-added Services for Refrigeration and Air Conditioning Compressors
Manufacturers and distributors of refrigeration and air conditioning compressors are focusing on the development of packaged systems for refrigeration and air conditioning compressors. Packaged systems are all-in-one cooling and heating solutions with various components housed in a single cabinet. Packaged systems are a popular choice for homes with limited space as they take up less room than split systems.
Service providers and distributors are focusing on providing custom packaging solutions and other value-added services, which can help original equipment manufacturers and clients to create a lean supply chain. Value-added services are designed to accommodate customers’ businesses and operational requirements.
Further, manufacturers of refrigeration and air conditioning compressors are involved in the strategic cooperation agreement with consumer appliance manufacturers across the globe.
- For instance, in November 2017, Bitzer (one of the prominent compressor manufacturers), announced a new 10-year contract with Maersk Container Industry (MCI), a prominent manufacturer of refrigerated transportation equipment.
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Governmental Initiatives to Support the Utilization of Eco-friendly Refrigerants
Several government agencies and organizations are focusing on the reduction of HCFC emissions from refrigerants, which is expected to be the prime factor for the growth of the global refrigeration and air conditioning compressors market.
- For instance, under the Title VI of the Clean Air Act, implemented by the Environment Protection Agency (EPA), the U.S. was mandated to reduce the consumption of HCFCs (R-22) by 90% below the baseline by January 1, 2015.
According to the EPA guidelines, the consumption of HCFCs is required to drop 99.5% by 2020 and replaced by alternative natural refrigerants. Prominent players in the market have already launched upgraded products to meet these standards while some tier-III category players are striving to achieve compatible technologies through several activities, such as R&D and partnerships.
Various government and non-government organizations offer rebates to refrigeration and air conditioning compressors manufacturers and food service providers for energy-efficient products and services. Energy Star, a U.S. Environmental Protection Agency (EPA) voluntary program, offers business and individual rebates, and also helps in protecting the environment by specifying superior energy-efficient norms.
Refrigeration and Air Conditioning Compressors Market Structure Analysis
- The global refrigeration and air conditioning compressors market represents a fairly consolidated competition landscape, where a majority of key players maintain their strategic focus on the development of solid distribution partnerships and joint ventures, targeting a firmer global footprint.
- The refrigeration and air conditioning compressors market has been relatively moderate in size, which remains a key factor for its dynamic competitive nature.
- Prominent manufacturers of refrigeration and air conditioning compressors are currently prioritizing R&D and new product launches in North America, Europe, East Asia, and South Asia.
- Portfolio extension is also identified to remain one of the key developmental strategies adopted by manufacturers of refrigeration and air conditioning compressors.
- For a stronger foothold in target markets, manufacturers of refrigeration and air conditioning compressors will continue to rely on inorganic strategies, such as mergers and acquisitions.
- Deeper understanding of the market trends and preferential shifts of end-use segments across various regions are likely to create a bottleneck for prominent players, looking forward to untapped opportunities in the refrigeration and air conditioning compressors market.
Refrigeration and Air Conditioning Compressors - Heading Towards a Greener Future
HVAC systems play a critical role in reducing food degradation and extending the shelf-life of food products. Apart from being an integral aspect of the food transportation industry, HVAC systems are primarily used across the commercial and residential sectors worldwide. In recent times, owing to the evolving landscape of regulations and growing awareness over comfort, ozone depletion, and energy savings, the demand for optimized compressor technologies and systems witnessed a significant growth.
Furthermore, rapid adoption of low global warming potential (GWP) refrigerants or natural refrigerants has been noticeable in household as well as commercial refrigeration equipment. In the view of increasing stringency of regulations pertaining to HVAC systems and growing environmental concerns, refrigeration and air conditioning compressor manufacturers are continuously focusing on enhancing efficiency of their products.
These manufacturers are further likely to place their bets on the production of highly efficient compressors that not only have lower environmental impact but also comply with the evolving regulations.
Technology Driven Modern Compressors Aim to Break Efficiency Barriers
From scroll technology to the advent of variable speeds, HVACR compressors have experienced significant advancements in last few decades. Recently developed compressors are pushing efficiency limits more than ever, owing to the adoption of new and advanced technologies. Modern compressors have demonstrated improved efficiency and low footprint on the environment, in addition to fulfilling the customer’s demands.
The market players active in the global refrigeration and air conditioning compressor market are focusing on achieving maximum system efficiency by deploying, modulation, vapor compression, oil-free, and magnetic bearing technologies. In addition, the adoption rate of natural refrigerants that have a low global warming potential has increased at a steady pace in the last few years.
For instance, the phase-down of R22, especially in the developed countries such as the US to curb environment degradation resulted in a significant growth in the adoption of alternative refrigerants including, R410a, R407c, and R404 among others.
The food transportation industry is one of the key end-use industry within the refrigeration and air conditioning compressor market. However, the modern refrigeration landscape is rapidly evolving owing to regulations laid down by government agencies. Within the food and beverage industry, industrial refrigeration systems play an imperative role in safeguarding the quality of food products.
Thus, the demand for technologically advanced and efficient commercial refrigeration compressors from the food industry witnessed a significant growth in recent years and the trend is expected to continue in the foreseeable future.
Surge in Demand from Supermarkets Propels Growth in North America
The thriving commercial sector in nations including the US and Canada have significantly increased the demand for refrigeration and air conditioning compressors. The growing number of supermarkets in the US has further heightened the demand for advanced refrigeration systems that comply with government regulations.
Moreover, the growing consumer awareness over environment safety, climate change, and energy-savings has boosted the demand for efficient compressor technologies: a trend set to continue in the coming years. The surge in number of cold supply facilities coupled with increase in trade of frozen foods have created lucrative opportunities for market players in the region.
Evolving Regulations Steer Manufacturers towards Developing Efficient Compressors
Owing to the uncertain nature and rapidly evolving regulatory landscape, manufacturers operating in the refrigeration and air conditioning compressor market are strongly focusing on research and development to enhance the performance of the compressors.
For instance, the Department of Energy (DOE) ordered manufacturers to reduce energy consumption by 30-50 % in the upcoming stand-alone equipment. Thus, in their efforts to fulfil the requirement of the DOE, manufacturers turned their attention towards enhancing their compressor technologies. For instance, LG devoted a significant amount of resources towards the development of new compressors and launched a duty rotary compressor and a two-stage scroll compressor in 2018.
In addition, the launch of the third generation Copeland Scroll two-stage compressor developed by Emerson was primarily aimed to enhance comfort and increase energy-savings. Thus, key players operating in the refrigeration and air conditioning compressor market are likely to prioritize the production of cost-effective and energy-efficient compressors in the coming years.
How Growth Will Unfold
Manufacturers operating within the global refrigeration and air conditioning compressor market are likely to tune their product development strategies based on the evolving regulations. Further, in their efforts to develop ‘smart compressors’, market players will lean towards the adoption of novel technologies and mechanical innovations.
In addition, the overall growth of the commercial sector and increasing trade volume of frozen food are some of factors that are tipped to propel the growth of the global refrigeration and air conditioning compressors market in the coming years.
By Cooling Capacity
- Less than 5 kW
- 5 to 30 kW
- 30 to 100 kW
- 100 to 300 kW
- 300 to 500 kW
- 500 to 1000 kW
- Above 1000 kW
By Product Type
- Rotary Vane
By Refrigerant Type
- Medical & Healthcare
By End Use
- Air Conditioning
- North America
- Latin America
- East Asia
- South Asia
- Middle East and Africa