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BSRIA: How does Refrigeration Change in Europe?

BSRIA, Building Services Research and Information Association, conducted an interesting analysis on how the health emergency has affected the world of refrigeration in particular that related to food.

 

Following the health emergency, unemployment has increased in Europe, inflation has increased and a strong contraction of the economy is expected for the years 2020 and 2021.

 

The emergency led to a change in the patterns of food consumption by citizens. In many countries the service of gastronomy has undergone a significant negative impact; online shopping has experienced and is still experiencing a strong development even in those countries that traditionally did not associate it with the purchase of food, such as Italy, France and Spain; in terms of products, there has been a strong shift in purchases towards frozen products, which are easily accumulated and long-lasting. According to BSRIA, online shopping for food products will continue to have a certain relevance even over the months.

 

These new behavior patterns as well as the needs related to the health emergency in general also have an impact on the refrigeration sector linked to food and pharmaceutical goods.

 

This refrigeration segment can be divided into three main categories:

 

  • Production: food & beverage sector, pharmaceutical sector (41% of the total market considered);
  • Distribution: refrigerated warehouses, refrigerated transport (9% of the total market considered);
  • Consumption: supermarkets, hypermarkets, discount stores, neighborhood shops (50% of the total market considered).

 

This supply chain has a value of around € 9.9 billion in Europe (EU28) in 2019

 

Production has a value of around € 4 billion. It includes applications ranging from small powers (<5kW) to large 2 MW installations. It sees the use of a wide variety of technologies and applications: condensing units, centralized systems, racks, etc.

 

Distribution is characterized by evaporators with small capacities (0.2 kW) and large exchangers for a total of 0.9 billion.

 

Finally, consumption sees the widest variety of technologies: it goes from small plug-in displays to refrigeration units, to large commercial displays, to integral air or water-cooled units. Value estimated by BSRIA: € 5 billion.

 

The change in purchasing habits in terms of products and methods caused by the pandemic, together with the regulations on energy efficiency, refrigerated gases and noise pollution are the framework in which the sector will develop in this period. These drivers necessarily lead the sector towards the development of technologies such as heat recovery, greater use of electronics to make systems more efficient, remote control and, where possible, automation. Among the types of shops that have experienced and are experiencing a revival there is the convenience store or nearby store, the uncontested territory of the condensing units, for which an increase in installations is expected in the short and medium term.

 

In terms of refrigerants BSRIA highlights the following trends:

 

  • HFOs are spreading as alternatives to HFC R404A and R134a;
  • The use of new HFC / HFO blends are currently increasing but could return to contract, giving way to pure HFO;
  • Natural refrigerants are becoming increasingly popular as alternatives to synthetic refrigerants;
  • There is an increasing diffusion of water as a refrigerant especially for medium temperatures;
  • After widespread use in racks, CO2 is also making its way into condensing units from 15 kW upwards;

 

Among supermarkets, the attitude towards the transition to more eco-sustainable alternatives is very varied with Lidl and Carrefour which in Europe guide the transition both towards HFC free solutions and towards the adoption of covers on refrigerated furniture.

 

What are the forecasts for 2021? Making predictions in this situation is extremely difficult. According to the results of a survey conducted by BSRIA:

 

  • the HORECA sector has been the most affected of all. Company closings are expected and this will lead to an increase in the second-hand market for some refrigeration appliances;
  • Retail sector has postponed many investments which will however be made either in late 2020 or in 2021;
  • The situation is very different between the EU countries, with Germany, the Netherlands and the northern countries that have maintained a relatively steady economy and countries like France, Spain and Italy that have suffered a lot;
  • Business forecasts are more uncertain than ever and depend on the uncertainty of a possible second pandemic wave. By the end of the year, however, activity decreases of 10-20% could be achieved;
  • As for food retail, the traditional model of the supermarket in the shopping center and malls may no longer be the winning model;
  • Neighborhood stores continue to grow and are experiencing a revival;
  • Online shopping continues to progress and this will certainly affect logistics with greater demand for warehouses and delivery vehicles.

 

BSRIA: How does Refrigeration Change in Europe?

Author, Riccardo Tigani   Linkedin Page
General Manager at Linea3C Srl

20th July 2020

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