Food Service Equipment Market Size, Share & Trends, COVID-19 Impact Analysis | 2021-2028

Food Service Equipment Market Size, Share & Trends, COVID-19 Impact Analysis | 2021-2028

Report Summary

In 2020, the global market for food service equipment market was valued at USD 34.68 Billion. The market is expected to grow at a 5.5% compound annual growth rate (CAGR), between 2021 and 2028. The market is driven by changing food habits, rising demand for take-out, and expanding hospitality industry. In the near future, market growth prospects are likely to be boosted by factors like increasing digitalization, the demand for eco-friendly and sustainable equipment, and strict consumer safety regulations. In response to changing requirements of customers for kitchen space outfitting, the market has evolved rapidly. The market for equipment in the end-use sector has been dynamic due to changing social norms and technological advancements.

The market will continue to grow due to the increasing number of innovative and technologically advanced products that have been introduced to it over the years. Appliance manufacturers have been able to provide technology-driven efficiencies to clients through rapid technological advances made possible by continuous Research and Development (R&D).

In response to the rise of casual restaurants in North America and Europe, the demand for these products has increased significantly. International regulatory bodies have established safety standards that require commercial kitchen appliances to be certified and tested by companies. These safety standards are intended to provide a safe environment for restaurant owners and consumers. The National Sanitation Foundation (NSF) is an American non-profit organization that performs product inspection, certification, and testing. They have developed equipment safety standards to ensure food safety and sanitation protocols are met by end-users. Food safety is a top priority. Standards have been established for material, equipment design, and equipment architecture.

Consumers are more aware of energy consumption and other eco-friendly initiatives, which makes it easier for them to choose energy-efficient appliances. This market is growing. To mitigate climate change’s increasing impact, energy consumption norms around the world emphasize reducing Green House Gas (GHG), emissions. Customers are choosing appliances with the ENERGY STAR symbol as a sign of energy efficiency. This helps cafes, restaurants and institutions save money on energy and reduce maintenance costs. According to the U.S. Environmental Protection Agency (EPA), food service equipment that bears the ENERGY STAR symbol can help end-users save approximately USD 5,300 per year or about 340 MMBTU, according to the 2018 Energy Star program.

Due to strict social distancing norms and shelter-in place rules imposed worldwide, the COVID-19 pandemic caused temporary closure of food service operations. The industry saw a decline in sales and production during 2020, which resulted to a decrease in growth. However, with the announcements of relaxations in lockdowns and the arrival of the first vaccines, the industry’s outlook is positive. Although the normalization of dine-in restaurants will take longer, customers are expected to be able to recover via off-premise take-out, online delivery, and other options. The market will continue to grow due to the increased footfall at food service restaurants and institutions kitchens.

Product Insights

Kitchen purpose equipment is expected to grow at the fastest rate between 2021 and 2028, with a 35.0% revenue share. To ensure smooth operation, it is essential to procure the right kitchen appliances when starting a business or renovating an existing one. In commercial kitchens, the growth of the kitchen purpose equipment market is dependent on the budget and space available. Manufacturers have increased their focus on the most recent technology and exterior design elements in order to meet the growing demand for kitchen appliances. Real-time monitoring of meals has been possible thanks to the growing trend of embedding sensors into kitchen equipment such as ovens, fryers, and cooktops.

Restaurants are also shifting to smaller kitchens due to increasing rents of commercial space. Food service equipment manufacturers are now compelled to improve their product designs, making them more compact, multipurpose, and quicker in function. In 2020, the refrigeration equipment segment represented a large share of the market for food service equipment. Modern refrigerators are becoming more popular in restaurants due to the rising demand for ready-to-eat and take-away food. Manufacturers have had to integrate bidirectional internet-of-things (IoT), connectivity into commercial refrigerators in order to remotely monitor and control food temperature.

End-user insights

In 2020, the FSR (full service restaurant) segment was responsible for the largest revenue share at over 40%. FSRs have a high market share due to digital dining trends. Food service operators are required to use modern equipment to reduce downtime and speed up preparation. Over the last few years, full-service restaurants have seen an increase in footfall due to the shift in dine-out culture. This applies both to formal events and informal gatherings during travel and tourism. FSR will likely continue to dominate the market over the forecast period.

 

Over the forecast period, the fastest growing segment will be the Quick Service Restaurants (QSRs). This is due to the growing working population and globalization through establishment of franchisees. QSRs place a strong emphasis on convenience, menu innovation, and pricing. The constant product innovation in food service equipment has been recognized as an additional stimulus that allows time-constrained customers to have faster access to high-quality cooked goods.

Regional Insights

Asia Pacific was the region with the highest revenue share, close to 35.0%, in 2020. It is expected to continue its dominance over the forecast period. The region’s rapidly expanding tourism sector and westernized dining habits are driving demand for food service equipment. Restaurants are now offering multiple cuisines to their customers due to increasing customer interest in trying new foods and discovering different tastes. In the Asia Pacific region, there will be a rising demand for appliances due to the increasing consumption of processed food.

North America was the dominant market in 2020, accounting for nearly 20% of the total revenue share. This is largely due to the presence of established brands like McDonald’s, Burger King Corporation and KFC Corporation. In the near future, the government plans to influence the tourism sector and immigration, which will help increase the appliance deployment rate in the region. The rising demand for home delivery and off-premise services in Latin America will drive significant growth during the forecast period.

Market Share Insights and Key Companies

Key players have to concentrate on business strategies like mergers and acquisitions that will benefit their businesses, as well as collaborations and mergers. To address food waste in supermarkets, hypermarkets and grocery stores, key manufacturers are working with solution providers. In 2018, AB Electrolux partnered with Karmalicious AB (a Swedish startup that develops food rescue apps), for a collaboration. The collaboration was intended to introduce a new, technologically advanced refrigerator for grocery stores in order to reduce food waste. AHT GROUP GmbH, a German food service manufacturer, was acquired by Daikin Industries, Ltd. in 2019. The acquisition allowed the company to increase its European presence. To gain an edge on the market, strategies like targeted marketing and new product launches are used. The following are some of the major players in the market for food service equipment:

  • AB Electrolux
  • Ali Group S.r.l. Socio Unico
  • Dover Corporation
  • Duke Manufacturing
  • Haier Group
  • SMEG S.p.A.
  • The Middleby Corporation
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