The current state of the European refrigeration industry
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Refrigeration
The current state of the European refrigeration industry
Presented by Greg Corty
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Making buildings better
European Refrigeration
The current state of the refrigeration industry
How will the industry meet the challenges?
Serving industry
since 1955
Greg Corty
30th June 2020
Webinar
www.bsria.co.uk
BSRIA capabilities
BSRIA WMI has:
➢ 50 + years of research and consultancy experience in the building industry
➢ 35+ years experience of publishing market studies in Air Conditioning, Heat Pumps, and
Refrigeration. BSRIA is a member of the International Institute of Refrigeration
➢ Published several multiclient studies on refrigeration markets worldwide
BSRIA’s services are fully independent which enables us to provide outputs that offer truly objective
analysis and opinion
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Agenda
➢1 The current crisis
➢2 The product market in key refrigeration sectors
➢3 Market drivers and challenges
➢4 What next for refrigerants?
➢5 Focus: What next for food retail?
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The current situation:
A lasting crisis upon Europe
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The state of the economy
Unemployment rises in Europe as Sharp contraction expected in global
coronavirus ends labour market recovery output this year: the years 2020 and 2021
will be lost for growth
Deflation fears as eurozone price growth
falls to four-year low
German industry records historic 18%
tumble in output
The economy on life support
ECB boosts bond-buying stimulus
package by €600bn
Germany’s €130bn stimulus will
boost recovery, says Bundesbank
Covid crisis likely to mask economic
fallout of no-deal Brexit
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6
Changes in consumer patterns encouraged by COVID-19
Online grocery shopping becoming the Frozen food experiencing a surge (France)
Coronavirus: Southern Europe discovers
new norm Over 9 year Over 1 year Over last 2 months
digital shopping (2011-2020) (2019-2020) (mid-Feb to mid-Apr)
Estimated % share before COVID-19
France
UK
Germany
CANNED FOOD DELICATESSEN SALTED FROZEN FOOD
Change in supermarket shopping during
COVID-19
Source: SimilarWeb
“For the next at least 12 months the internet
will be a really important part of anyone’s
business and you’d be crazy not to embrace it”
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7
How will it impact the refrigeration industry?
The refrigeration industry is segmented between a few key sectors of application.
Applications for European refrigeration market, 2019, % value
Total:
EUR 9.9 bn
Production Distribution Consumer
41% 9%
50%
Cold storage
Food processing Cold rooms Super/Hypermarkets
Breweries, dairies, wine Convenience stores
Marine Restaurants/leisure sector
Petrochemical
Engineering/electronics
Pharmaceutical
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8
The product market in key refrigeration sectors:
Production area
Distribution area
Consumer area
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Refrigeration in production area (EU 28)
Industrial refrigeration is characterised by several types of evaporator applications
Refrigeration Refrigeration market in production area, value, EUR million, 2019
Remote
Air-cooled condensers / dry Evaporator units: condensers
coolers - Unit coolers Condensing units
Different types: - Variable retention time
tunnel freezers (VRT)
- air cooled
- Commercial refrigerators
- dry cooler Compressor racks
- Spiral & plate freezers
- gas coolers
- Ice makers
- adiabatic
- Milk tanks Industrial
- evaporative
- borehole/ground sink packages
Evaporator units
From small capacities
(Refrigeration in distribution area (EU 28)
A large proportion of the distribution area is made of unit coolers
Products Refrigeration market in distribution area, value, EUR million, 2019
Evaporators / Unit coolers: Heat exchangers
From small capacities (0.2 Condensers
kW) to large HEX for process, Evaporator units
Evaporators
cold stores, expedition Condensing units
Fluid/fluid HX
platforms (>100 kW)
Compressor racks
Distributor made
Industrial Remote
Manufacturer made
packages condensers
(Commercial refrigeration Compressor racks
power up to about 450 kW)
Installer made
350 kW
Total: EUR 0.9 bn
Source: BSRIA
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11Refrigeration in consumer area (EU 28)
Evaporator units such as display cases account for a large share
Refrigeration market in consumer area, value, EUR million, 2019
Products
Condensing units Remote
Condensing units: Evaporator units: condensers
Uncased units - Commercial refrigerators
/ freezers
Cased units – including split Compressor racks
units - Beer / wine coolers
Silenced cased units - Remote display cases
Monoblocks - Integral display cases:
20 kW - Air cooled
- Water-cooled (water
loop self contained)
Evaporator units
Total: EUR 5.0 bn
Source: BSRIA
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12Market drivers and challenges
www.bsria.co.ukThe European refrigeration market
Restraints
European refrigeration market, EUR million 2015-2019
10,200 Social /
proximity
10,000
Social /
9,800 shopping
patterns
9,600
Technology /
9,400 energy
efficiency
9,200
Political /
9,000 legislation
8,800
Environment /
climate
8,600 change
2015 2016 2017 2018 2019
• Europe EUR 9.9 billion in 2019 Environment /
COVID-19
• CAGR of 2%
Drivers
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14What next for refrigerants?
www.bsria.co.ukA reminder: the EU F-gas Regulation
F-Gas Regulation (EU) No 517/2014: phase-down of HFC in CO2 equivalent tonnes
100%
93%
63%
45%
31%
24% 21%
Baseline period
2009 2012 2016 2018 2021 2024 2027 2030
The EU F-gas Regulation implements the Kigali Amendment, with a stricter agenda:
- More stringent phase-down schedule than the Montreal protocol
EU F-gas quotas (tonnes CO2eq): -69% 2024, - 79% by 2030 (Kigali Amendment: -45% by 2024 only)
- Different 100% HFC base years : EU F-gas ref years 2009-2012 // Kigali ref years 2011-2013
- Bans on HFC in new equipment
- Measures to prevent leakage of F-gases
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16The EU F-gas regulation – Bans on HFC in new equipment
The EU F-gas Regulation focuses on refrigeration where higher GWP apply
Sector Products Ban HFC Year
with:
Domestic refrigeration Domestic refrigerators and freezers GWP ≥150 2015
Commercial refrigeration Refrigerators and freezers (hermetically GWP ≥2500 2020
sealed)
GWP ≥150 2022
Commercial and industrial refrigeration Stationary refrigeration equipment GWP ≥2500 2020
Multipack centralised refrigeration GWP ≥150 2022
systems (≥40 kW) except in the primary
refrigerant circuit of cascade systems
where F-gasesRefrigerants in refrigeration
Refrigerants
Potential for main refrigerants in Refrigeration
- HFC Refrigerants are declining HFC HFO CO2 R290 Others
- HFOs are popular alternatives to both R404A and Condensing units
R134a Compressor racks
- New HFC/HFO blends are also on the increase, Display cases (integral)
but they are expected eventually to recede in
favour of pure HFOs
- Natural refrigerants such as CO2 and propane
have already made a breakthrough
- After widespread use in compressor racks, CO2
should now progress in condensing units of 15
kW or more
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18Choice of refrigerants by key retailers
Centralised decision-making is key to drive low-GWP refrigerants
No noticeable
initiative
Cascade R448A/CO2
in one supermarket
Initiative must come 55% energy used is
from store owners from renewable
sources
Some uptake of
transcritical CO2 HC in all stores
All display cases Increased the number of
have doors HFC-free systems
R404A
R134a Display cases with doors
in 355 stores
Starting to implement
R448A/R449A CO2 condensing units in
R452A convenience stores
R513A
CO2
R290
High GWP Low GWP
Uptake of HFC-free refrigerants
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19Focus: What next for food retail?
www.bsria.co.ukRefrigeration market forecast –before and after the crisis
Forecast Refrigeration market real growth, EU (28), in volume mln €
11,000
Refrigeration forecasts up to 2021
Refrigeration is an industry correlated to GDP,
and in particular to private consumption.
10,000
New forecasts take into account:
- Scenario 1 = the virus continues to recede,
- Scenario 2 = a second wave of rapid
contagion erupts later in 2020.
9,000
Nov 2019 projections
Singe hit scenario
No return by 2022 to the level of income that
Double hit scenario
would have been expected in normal
8,000
circumstances. 2017 2018 2019 2020 2021
Source: BSRIA
Note: million € at constant prices 2017
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21How will it differ between countries?
The difference between countries:
- An estimate -15% is expected for refrigeration in Europe
- France, Italy, United Kingdom = strong and lasting decline
- Germany, and Nordic countries = business as usual?
Livestock processed, EU (28), volume Vegetable production, EU (28), volume
Italy Italy
6% Netherlands Rest
Rest 20%
6% 29%
30% Poland
8%
UK
6%
Spain
Germany
20%
6%
France
20% France
Germany 8%
24% Netherlands Poland
8% 9%
Source: FAO
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22Market Feedback
Survey results There is a difference between refrigeration sectors. The
Business worst hit has been food services
environment We can expect several bankruptcies in the HoReCa sector,
A brief survey was carried with a lot of second-hand appliances reaching the market
out with key stakeholders: The retail sector has postponed investment, but they will
still take place later in the year
- Contractor associations
- Manufacturer The situation differs among EU countries: EU countries
associations - Germany, the Netherlands, Scandinavia: these
- European suppliers of countries are still going strongly
refrigeration products - France, Italy, Spain, the UK: these have been worst
and components hit by the lockdown and its aftermath
- Some key specifiers
The future? There is no obvious scenario for 2021: while the virus may
come back, activities in food services and the leisure / travel
sector are likely to remain subdued
We are facing a W-shape recovery, with a further
depression expected by the end of 2020
By the end of the year, we will reach -10% to -20% activity
level
Source: BSRIA
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23The future of food retail
The traditional hypermarket is threatened – will alternative shopping models continue to grow?
Food retail Retail parks
➢The traditional model of large stores,
often in retail parks, might be Will they
continue to
threatened
exist?
➢Convenience stores expected to
continue to grow at the expense of “Click & drives” Will they Will they
continue to unsettle the
large super / hypermarkets Convenience stores
thrive, driven traditional
by online supermarket
➢Internet shopping continues to 81% 19% shopping? model?
progress, driving deliveries or pick up
stores requiring more cold stores
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24Conclusions
The current crisis will mean a recession over 2020,
particularly for food services, but likely recovery
from 2021
The Pandemic likely to result in a further push in
changing the way we shop
Drivers such as energy efficiency and new
refrigerants will mean product innovations will
continue
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25New projects
www.bsria.co.ukNew Projects - Refrigeration
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27Contact details
Greg Corty
HVAC&R Senior Researcher
Old Bracknell Lane West, Bracknell, Berskshire RG12 7AH UK
T: +44 (0)1344 465600 M: +33 (0)6 65 21 46 62
E: Greg.Corty@bsria.com W: www.bsria.co.uk
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