A growing market
In general, the refrigeration market is relatively insensitive to economic cycles, because we need chilled foods in both booms and recessions. But the market for refrigeration technology is still driven by a number of factors and megatrends.
Urbanisation and better living standards
Changing behaviour around food is one example of a trend affecting the refrigeration market. Urbanisation and higher disposable incomes in recent years have increased the need for chilled and frozen food. Investment needs are growing, fuelling demand both in traditional food retail and in entirely new retail categories. With online grocery shopping, refrigeration facilities in transport are also becoming more common.
Transition to environmentally friendly refrigerants
The European F-gas regulation is another factor driving demand for refrigeration. Historically, many refrigerants have been based on hydrogen-fluorocarbon compounds, known as F-gases. When these F-gases are released, or leaked, into the atmosphere, they contribute to the greenhouse effect in a similar way to carbon dioxide emissions. One difference, however, is that some of the F-gases are significantly stronger greenhouse gases than carbon dioxide. This is why the EU introduced the F-Gas Regulation on 1 January 2015. It progressively bans refrigerants with a high greenhouse effect. The new regulation aims to reduce F-gas emissions by almost 80% by 2030 compared to 2015 levels. Today, researchers and companies are working to develop alternative and synthetic refrigerants that do not damage the ozone layer and contribute less to the greenhouse effect. The EU resolution means that the refrigeration industry will undergo a major restructuring in the coming decades, with a strong need for investment in environmentally friendly refrigeration technologies. At the same time, most markets are far behind in making the technology shift. As a result, the transition can be intense in some places when the supply of F-gases decreases due to import restrictions. Beijer Ref is one of the players actively supplying the market with high-tech solutions for refrigeration and HVAC based on environmentally friendly refrigerants.
The middle class is growing
In the comfort cooling (HVAC) segment, there are several factors driving increased demand. Heat pumps and air conditioning in homes are becoming more common, even in the northern part of Europe. In the heating segment, the trend is to replace traditional oil and gas burners with much more energy-efficient air/water heat pumps. The growing middle class in Asia is also contributing to increased demand for comfort cooling. The same applies to Africa, where the middle class is expected to grow strongly in the coming years, meaning that significantly more people will be able to buy air conditioning.
Digitalisation generates impact
In pace with increased digitalisation, e-commerce is growing, including in Beijer Ref's industry. Artificial intelligence and new types of sales channels and operators will become increasingly common.