After a 15 year delay Greenfreeze finally comes to the US
Author: Simon Maddrell
Date published: 14 Jul 2009
Euromonitor International has identified future product development in Greenfreeze refrigeration appliances as GE's innovation-led strategy to improve its declining US market share.
Wind of environmental change
With Greenfreeze hydrofluorocarbon (HFC) free refrigeration appliances available since 1992 and an approximate 300 million units sold since conception, according to Greenpeace, one has to ask why it has taken so long for the concept to be utilised by the US. Quite simply, it was not due to a lack of environmental want, although the wind of environmental change has been much stronger since Obama's election victory, but rather regulatory issues surrounding the technology. Concerns over the products' flammability from the Environmental Protection Agency and manufacturers' lack of stomach for the bureaucracy in trying to secure certification led to the delay. The marketing and advertising of any new US Greenfreeze technology refrigeration units is likely to focus on the elimination of HFCs and the positive effect on the environment and manufacturer, and market share will be won or lost on a successful environmental 'must have' campaign.
With the obvious energy efficiency and environmental claims that come with any Greenfreeze refrigeration unit, the case for first mover advantage is clear, especially when considering refrigeration appliances accounted for over 35% of retail RSP sales of all LKAs in 2008, according to the latest published figures from Euromonitor International. GE is a step ahead in terms of R&D, looking to launch its Monogram-branded Greenfreeze refrigerators, subject to approval, in the US market in 2010. However, taking into account the company's declining share in refrigeration appliances over the past four years, it is little wonder innovation is so essential to alleviating a further slide.
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| US refrigeration appliances growth by category – 2005-2008 |
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| Euromonitor International |
| RSP value in US$ millions |
Innovation key to alleviating GE's market position
Euromonitor International has tracked the stagnating market share in refrigeration appliances for GE over the past three years, with a stellar performance in fridges offsetting the decline in freezers. Taking this out of the equation paints a much bleaker picture. With GE's strategic direction firmly focused on Energy Star certified products, expanding the Monogram brand to include Greenfreeze technology appears to be an astute medium-term value-enhancing direction for the company. With GE's investment now focused on innovation in Greenfreeze technology, it is highly likely that Whirlpool, Electrolux and Haier will be ready to follow suit in the not too distant future as the medium-term view for the category is that it will almost certainly need further investment and innovation to alleviate a turbulent economic situation and a poor demographic dividend over the long term.
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| General Electric retail volume market share by refrigeration category – 2005-2008 |
| Category |
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| Euromonitor International |
Industry stimulus
It is not just consumer environmental concerns, appliance manufacturers or government legalisation driving potential growth of Greenfreeze, but also food and beverage manufacturers. 'Refrigerants Naturally' is a corporate initiative to reduce the use of HFCs, and is supported by IKEA, PepsiCo, McDonald's, Unilever, Carlsberg and Coca-Cola. As part of this initiative, companies are striving to create HFC-free vending machines, display cases and beverage coolers. In a positive step for the movement, last autumn Ben & Jerry's successfully petitioned the EPA to allow a test run of Greenfreeze refrigerators at its stores in Washington DC, Boston and Vermont. With consumers, the US government, appliance manufacturers and food and beverage producers all jumping on the bandwagon, it is possible that GE could start to improve its stagnating share in the US refrigeration market in 2010. In all likelihood this will not however add significant value to the GE appliances division, in light of the proposed sell-off.
For more insight please contact Sitanta Ni Mathghamhna, Domestic Electrical Appliances Analyst at: sitanta.mathghamhna@euromonitor.com