Food Service Equipment Market Size Analysis Report By Product (Kitchen Purpose, Refrigeration, Ware Washing, Food Holding & Storing), By End-user (FSR, QSR, Institutional), And Segment Forecasts, 2019 - 2025

Industry Insights

The global food service equipment market size was estimated at USD 31.64 billion in 2018 and is expected to expand at a CAGR of 5.0% during the forecast period. Factors such as changing lifestyle, increased demand for refrigerated products, increased import and export activity in food and beverage sector, and evolving food consumption trends are contributing to the growth. The need for technologically advanced products, Wi-Fi and Internet-enabled devices, and multi-function appliances is increasing amongst people. High traction for smart kitchen and connected equipment is expected to boost the demand.

Food service equipment differ in size and range depending on the type of hospitality businesses and their requirements. Government regulations and increasing cleanliness and hygiene requirements in commercial kitchens across the hotels and restaurants are expected to have a positive impact on the product demand. Growing awareness about energy consumption and evolution of freezers and refrigerators to comply with the new energy requirements is enabling consumers to adopt energy-efficient products. 

Various government regulations and standards have made it mandatory for manufacturers to meet the Environmental Protection Agency (EPA) standards. The enhanced digitization and accelerated adoption of technologically advanced products are creating a shift in consumer lifestyle. This transition is creating requirements for kitchen equipment, which is encouraging several manufacturers to discover novel ways to meet the customer demand. High demand for energy-efficient products is the major factor driving the manufacturers to develop advanced products, which is driving the volume sales of appliances with energy star certification.

Technological additions that are being adopted by restaurant owners such as free Wi-Fi, online food ordering facility, targeted social media campaigns and other technological advancements have boosted the demand for hotel and restaurant service by customers. Increasing demand for hotel and restaurant service has in turn boosted the product sales.

Increasing popularity of Internet of Things (IoT) is driving the demand for devices with internet connectivity. Customer-facing technology is gaining the most attention in the restaurant business as apps and mobile ordering systems are developed to ease the work of customers and meet the rising demand for innovation. Advanced instruments offer various features, such as sensors and controls, efficiency, pre-programmable features, and interactive cooking, which is responsible for the growth of the market.

In addition to various developments in the food service equipment market, there has been an increase in the number of hotels, nursing homes, hospitals, fast food joints, and restaurants. This is expected to boost the product demand over the forecast period. The variety and types of restaurants such as day dining, fine dining, specialty and various bars, pubs, lounges, conference rooms, ball rooms, and food courts have contributed to the growth of the hospitality industry.

Product Insights

Kitchen purpose equipment segment accounted for over 39.8% of the overall market share in terms of revenue in 2018 and is expected to lead the market over the forecast period. The segment is further classified into cooking and beverage preparation equipment. Increasing need for modern kitchen amenities and shift in consumer preference for modular kitchen is boosting the demand. Smart kitchens and various innovations in the industry are helping the kitchens in restaurants and hotels become efficient and manageable. Restaurants of various sizes are moving towards smart appliances and connected kitchens to reduce training and staff shortage and to boost energy saving and quality.

Refrigeration is expected to be the second dominant segment over the forecast owing to the increasing demand from commercial and industrial kitchen. International food trade has given rise to trading of processed, canned, and frozen food which requires proper refrigeration equipment to transport these items. Stringent regulations and increasing environmental concern over the use of refrigerants with high global warming potential is expected to provide several growth opportunities for advancement in commercial refrigeration equipment.

End-user Insights

According to the end-user, the market is classified into Full Service Restaurant (FSR), Quick Service Restaurant (QSR), institutional, and others. Full service restaurant is estimated to be the largest revenue generating segment over the forecast period. However, the market for the quick service is expected to expand at the highest CAGR of 5.8% from 2019 to 2025. In modern quick service restaurants, fast food is prepared with highly processed methods in bulk with standardized cooking procedures. This factor is anticipated to drive the demand for cooking equipment in fast food services.

The demand is highly influenced by the restaurant operators' decision to purchase new equipment versus opting for repair and maintenance of existing instruments. In an expanding economy, food service establishments generally opt to buy new products. However, the replacement sales are strongest in the areas where the installed base of equipment is largest (i.e. hotels, motels, and restaurants). Other factors that influence product demand include the trade-off between repair and replacement, the age of equipment, and the eco-friendly aspects of newer equipment.

Regional Insights

North America is expected to be the key region for the market growth owing to the high product penetration and an increasing need to adopt the latest technology. Rising working population and demand for fast food are driving the growth. The number of hotels and restaurants has increased substantially due to the changing lifestyle of people and their demand for ready-to-eat and packaged foods. The region accounted for over 30% of market share in terms of revenue in 2018 and is anticipated to register a CAGR of over 4.7% over the forecast period.

Asia Pacific is projected to be the fastest growing region owing to the presence of robust economies such as China, India, and Japan. The standard of living of people in the developing countries has resulted in the growth of the hotel and restaurant business. Moreover, rising number of nuclear families, need for processed food in developing countries, and increasing production in India and China is contributing to the regional growth. Growth in hotel and food industry in India is expected to contribute to the overall market.

In Africa, ware washing is gaining importance owing to a shift in consumer spending patterns, proliferation of stores offering credit card payment facility, and rapid urbanization.

Food Service Equipment Market Share Insights

Some of the key market players include AB Electrolux; Ali Group; ITW; Middleby Corporation; Dover Corporation; and Manitowoc Company Inc. These players are involving in R&D activities to develop products compliant with new energy standards and regulations mandated by the government authorities.

Shifting consumer preferences from conventional to technologically advanced products are enabling key players to offer innovative kitchen appliances. In September 2016, AB Electrolux launched two product ranges, namely, the mastery range and new laundry range which includes innovative kitchen products and washing machines and dryers. In February 2016, Falcon Foodservice Equipment, a subsidiary of Ali Group introduced the F900 Series which comprises of professional catering equipment.

The companies are also focusing on developing strategic partnerships and acquisitions to gain a competitive advantage. For instance, in December 2018, Middleby Corporation announced the acquisition of Crown Food Service Equipment, Ltd., the company involved in manufacturing of steam cooking equipment for commercial food service industry. Vendors are also focusing on initiating a cost reduction program within small appliances segment to restore profitability.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global food service equipment market report on the basis of product, end-user, and region:

• Product Outlook (Revenue, USD Million, 2015 - 2025)

  • Kitchen Purpose

  • Cooking Equipment

    • Food & Beverage Preparation Equipment

    • Refrigeration

  • Ware Washing

  • Food Holding & Storing

  • Others

• End-user Outlook (Revenue, USD Million, 2015 - 2025)

  • Full Service Restaurant (FSR)

  • Quick Service Restaurant (QSR)

  • Institutional

  • Others

• Regional Outlook (Revenue, USD Million, 2015 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

  • Latin America

  • Middle East & Africa