Refrigeration Compressor Market

Market Overview

The global refrigeration compressor market size was valued at USD 30.2 billion in 2022 and is projected to reach USD 46 billion by 2031, registering a CAGR of 4.8% during the forecast period (2023-2031).

A refrigerator compressor is an important component in refrigeration systems that helps to keep temperatures low and the cooling process moving. It compresses refrigerant gas to enhance its pressure and temperature, producing a high-pressure, high-temperature gas. This high-pressure gas then passes through the condenser, releasing heat and condensing into a liquid. The liquid refrigerant then flows via an expansion valve, which reduces its pressure and temperature, before entering the evaporator, which absorbs heat from the surrounding environment, resulting in cooling.

The Refrigeration compressor market share is expected to grow substantially during the forecast period due to the increased demand for fast-moving products and growing disposable income. The global population is expected to be 8.5 billion in 2030, 9.7 billion in 2050, and 11.2 billion in 2100. According to the United Nations (U.N.), urban areas house more than 54% of the world's population, which gives work possibilities and raises people's income levels. Rapid urbanization and changing lifestyles and preferences have raised the demand for packaged Food and beverages among urbanized consumers. Frozen meals are inexpensive to obtain your daily dosage of fruits and veggies.

Market Dynamics

Global Refrigeration Compressor Market Drivers

Growing Demand for Fast-Moving Products

The refrigerator compressor market growth is attributed to the rising need for fast-moving consumer goods such as perishable goods, medicines, and ready-to-eat food items is a major driver in the refrigeration compressor industry. These items require efficient and dependable refrigeration systems to preserve quality and extend shelf life across the supply chain. Fruits, vegetables, dairy products, and seafood have a limited shelf life and require precise temperature regulation to avoid deterioration and retain freshness. The cold chain logistics business is critical in ensuring that these items are transported and kept at regulated temperatures from manufacturing to consumption. Refrigeration compressors, which power the refrigeration systems in refrigerated vehicles, reefer containers, and cold storage facilities, are critical components in cold chain logistics. These compressors keep perishable commodities fresh and safe for consumption during travel and storage by maintaining the proper temperatures.

Global Refrigeration Compressor Market Restraints

High Initial Investment

The high initial investment is a key limitation in the refrigeration compressor industry, particularly for enterprises with limited financial resources. The expenses of obtaining and installing refrigerated equipment, particularly compressors, might be significant, causing uncertainty or delay in implementing sophisticated refrigeration systems. According to a DOE analysis, commercial refrigeration equipment, especially compressors, can account for a large share of a business's energy use. Upgrading to energy-efficient refrigeration systems can result in significant long-term cost reductions. However, the initial expenditure might be too expensive for small firms. For example, depending on the size and capacity of the compressor, replacing obsolete refrigeration compressors with new energy-efficient versions might cost several thousand dollars per unit. Furthermore, the entire cost of replacing a refrigeration system may involve other costs such as installation, retrofitting, and infrastructural upgrades. These prices might make it difficult for small firms with little money to implement more modern and energy-efficient refrigeration technologies.

Global Refrigeration Compressor Market Opportunities

Cold Chain Infrastructure Expansion

A cold-chain infrastructure is a network of refrigerated facilities, transportation systems, and distribution systems that ensure the integrity and quality of temperature-sensitive items along the supply chain. The growing need for perishable commodities, medicines, and other temperature-sensitive products necessitates efficient and dependable refrigeration systems. With the advent of e-commerce and online grocery delivery services, the demand for cold-chain logistics has increased. Customers today demand fresh and perishable products delivered right to their door, necessitating a seamless cold-chain supply chain. Refrigeration compressors are crucial in maintaining proper temperatures throughout shipping, ensuring that perishable items are pristine.

Regional Analysis

The global refrigeration compressor market research is analyzed in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific Dominates the Global Market

The Asia-Pacific refrigerator compressors market is expected to lead and have the highest CAGR of 4,7% during the forecast period. This is because the region is becoming more industrialized quickly, its economy is growing quickly, and many new businesses are opening up there. India and China's economies are growing, causing many retail shops and outlets to grow. This is supposed to help the regional industry grow. The demand for refrigerators and compressors will increase because more people buy packed and canned foods. India is a good example of how refrigeration fans are becoming more popular in Asia. The farming sector of the country is large and varied. It makes many goods that need to be eaten quickly, like fruits, veggies, dairy products, and meat. There is a growing need for cold storage buildings with good refrigeration units to keep these products from going bad after harvest and to keep them fresh for longer. The National Horticulture Board (NHB) of India says that India's cold storage capacity has grown a lot in the past few years. By 2020, India will have about 39.1 million metric tons of built cold storage space to hold perishable goods and help the farming supply chain. Also, the rise in people's income in this area will greatly impact the demand for business freezer units over the next five years.

North America will likely grow rapidly at a CAGR of 4.56% because many big businesses and industries need refrigeration and refrigerator compressors. Also, the market will be driven by the need for a strong cold chain industry position in business transport systems with chilling facilities in the food and chemical sectors. Also, the growing number of cold storage warehouses in the area will help grow the business refrigerator compressor market. Also, there are well-established distribution routes for retail companies in the U.S. retail market, which means that retail providers of all sizes have many chances to grow. Also helping the market are small- to medium-sized business unit owners, individual or direct sellers, and big store operators. This is because more Food is being exported, consumers are becoming more aware, and more industries and businesses are using cooling technologies. In the past few years, the U.S. has become one of the top producers of food goods, and this trend is likely to continue over the next ten years. The WorldAtlas study says that in 2016, the country shipped Food worth US$ 72,682,349.79. Logistics firms and carriers in the country use refrigeration units to keep these foods fresh. So, over the next few years, there will be a steady rise in the need for freezer fans.

The European food retail business relies on refrigeration compressors to preserve perishable items and assure food safety. Refrigeration compressors keep display cases, refrigerators, and cold storage facilities at appropriate temperatures in supermarkets, hypermarkets, convenience shops, and other food retailers. Germany leads Europe's food and beverage market. QSR and fast-food growth boost Germany's refrigeration compressor sector. In 2020, German food retail sales rose 8.2% to EUR 227 billion, according to GTAI. This favorably affects refrigeration compressor sales nationwide and will likely continue over the projection period. Due to expanding consumer spending power, changing lifestyles, rising demand for packaged and frozen goods, and more retail facilities, the German refrigerator compressor industry will rise. The European Federation of Pharmaceutical Industries and Associations (EFPIA) said the pharmaceutical sector spent EUR 35.2 billion on R&D in 2019. This R&D expenditure shows dedication to novel medication research and emphasizes the need for reliable refrigeration systems to maintain pharmaceutical product integrity throughout storage and shipping.

The Latin America, Middle East, and African market is experiencing improvements in products that use less energy and are better for the environment. Countries in the Middle East and Africa are taking steps to lower their carbon output and meet international environmental standards. This has led to the use of refrigeration units with low Global Warming Potential (GWP) refrigerants. According to a study from the United Nations Food and Agriculture Organization (FAO), the number of cold storage facilities in the Middle East has been growing. As of 2018, the Middle East had about 2.34 million metric tons of cold storage built, an important part of the region's food supply chain.

Segmental Analysis

The global refrigeration compressor market is segmented based on product type, refrigerant type, application, and region.

Product type is further segmented into reciprocating, rotary, scroll, screw, and centrifugal for better understanding.

Reciprocating compressors hold the major share of the market. Reciprocating compressors, also called piston compressors, use a piston and cylinder to squeeze refrigerant gas. They are often used in smaller cooling systems and places where they only need to work sometimes. Reciprocating compressors work well when high pressure and low volume are needed.

There are many rotary compressors, like rotary vane and screw compressors. The refrigerant is squeezed by moving parts in these compressors. They are known for running smoothly and constantly, which makes them good for medium-sized to large-sized industrial refrigerator systems.

The market is subdivided into R410A, R407C, R404A, R134A, R290, R600a, and others based on refrigerant type.

R134A influenced the market. R134A is a hydrofluorocarbon often used in car air conditioners and industrial cooling systems. Even though its GWP is lower than some older refrigerants, it is still a strong greenhouse gas. 

R410A is a hydrofluorocarbon (HFC) refrigerant often used in heat pumps and air conditioning systems. It has become more common as a solution for older refrigerants like R22 that have a higher GWP. R410A has less effect on ozone loss, but its GWP is still high.

The segment can be bifurcated by application into Food and beverages, pharmaceuticals, chemical, HVAC, automotive, and others.

Food and beverages own the highest market share. Refrigeration compressors are widely used in the food and beverage industries. Examples of applications include cold storage warehouses, refrigerated shipping, dairy processing, meat processing, beverage production, and commercial refrigeration in supermarkets and restaurants. Efficient refrigeration systems are required to maintain the freshness and quality of perishable commodities, as well as to ensure food safety and increase shelf life.

Refrigeration compressors are used in the pharmaceutical business for cold storage and delivery of temperature-sensitive drugs, vaccines, and biopharmaceuticals. Precise temperature control is critical for pharmaceutical product efficacy and durability throughout storage and delivery.

Recent Developments

• In July 2023, Nidec acquired Houma Armature Works, a motor and generator service provider headquartered in the United States.
• In July 2023, Emerson introduced the first integrated manifold solution for respiratory therapy devices in the healthcare industry.
• In July 2023, Mitsubishi Electric's M.E. Innovation Fund invested in Hydroleap Pte. Ltd.