The cold rooms market in Germany, Italy, Spain, France, UK, Benelux and Austria recorded an increase in both quantity and value sales of 3.7% and 2.7% respectively. This upward trend is not expected to continue over the forecast period due to the overall stagnation of economy in the euro area. The market is expected to see an annual average growth rate of below 1% over the next three years, reflecting the economic situation in the EU and the expected forecast of gross domestic product (GDP) which is forecast to expand by 1.1% in 2020 and by 1.2 % in 2021.

German Cold Rooms Market Leading Sales in 2019

The total market for cold rooms in the Europe Top 7 (Germany, Italy, Spain, France, Benelux, UK and Austria) experienced an increase of 2.7% in terms of quantity sales, reaching 103,550 cold rooms sold in 2019, while the value sales reached EUR 368.1 million, experiencing an increase of 3.7%. The German market was the biggest in 2019 in terms of quantity sales, accounting for a 25.2% recording an increase of nearly 3%. The market was strongly influenced by the growth within the small cold rooms segment (<20 m³). This segment recorded a strong increase in 2019 of 4.9%. On the other hand the 100-400m³ segment recorded a decrease of 2.8%. This particular trend towards the small cold rooms in Germany is expected to continue over the forecast period. This segment is expected to see an average annual growth of around 1% over the forecast period, while the 100-400m³ is expecting to see a negative development. Both segments will strongly be influenced by the expected slowdown of the retail industry in Germany. The second best market in terms of quantity sales in 2019 was UK which accounted for 18.2%, followed by France with 14.6%, Italy with 13.4%, Spain which accounted for 12.3% and Benelux with around 10%.

Food Processing Industry Generating the Strongest Demand for Cold Rooms

In 2019 the food processing industry was creating the strongest demand for cold rooms in Europe with around 40% of the total number of cold rooms sold in 2019, followed by food service industry with 35.9%, while the specialized food retail industry accounted for a share of around 24%. The food processing industry is a mature sector which is experiencing a turbulent period due to the growing global demands for food safety, increasing food insecurity and consumer demand for higher quality and sustainability; however its importance in creating a strong demand for cold rooms is not expected to diminish over the forecast period.

Strong Trend Towards Customized Cold Rooms

In 2019 factory built cold rooms accounted for 28.4% of the total number of cold rooms sold, while customized i.e built on site cold rooms accounted for 71.6%.

The market is rapidly moving towards customized cold rooms and this trend is expected to reach its peak in 2022. The reason for this particular trend should be seen in meeting the demands of consumers (customization based on real needs and space) and price pressure. Control of installation quality for cold rooms built on site is not that strict, compared to factory built cold rooms.

Strong Fragmentation of the Market in 2019

In 2019 the cold rooms market was quite fragmented with domestic players holding the strongest positions. On the national level the market concentration is very high. In Germany for the Top 10 companies accounted for 76.9% of the total sales, in Italy even stronger 81.2%, France 77.1%, UK 70.2% and Spain 76.0%. However, when it comes to the total market (surveyed countries) the market concentration is not that strong. The Top 10 companies account for 48.2% of the total volume sales, indicating how strong the fragmentation of the market actually is, and that none of the companies established enough influence to move the industry in a particular direction.

The Industry is Facing Challenges

Whilst high costs and instability are likely to cause friction and potentially stop businesses from taking risks, the increase and variation in consumer demand continues to fuel the industry. The cold rooms market is set to see a modest increase over the forecast period at an annual average growth rate of around 1% to reach EUR 364.8 million in 2022.

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.