JUNE 2022 l The Wholesaler l PHCPpros.com
NO SINGLE APPLIANCE
in modern society is more essential than a water heater. And although taken for granted today, it wasnt long ago that households and businesses across North America relied on a stove or open re to heat their water before using it for cooking, bathing or cleaning. Weve come a long way indeed, but todays manufacturers have no intention of slowing down innovation or meeting the consumer appetite for it. Manufacturers are not only fo- cusing on developing innovative product features but also eiciently developing sales and distribution systems, notes Persistence Market Research (PMR). Rising consumer focus on online product research be- fore making a purchase will increase the opportunity for manufacturers. In its 2022 report on tankless water heaters, the research rm estimates that global demand for tankless water heaters is poised to expand at a healthy compound annual growth rate of close to 6 per- cent over the next 10 years and cross a valuation of $6.3 billion in 2031 (https://bit.ly/3t0ySFF). We spoke to several tankless water heater manufacturers - A. O. Smith, Aerco, Bosch Heating and Cooling, Bradford White, Bradley Corp., Diver- sied Heat Transfer (DHT), Essency, Intellihot, Navien, Noritz, Rheem, Rinnai and Stiebel Eltron - to get their views on industry trends and where they see the tankless industry going in the future. More specically, we started by asking what their market outlook is for this year and next, and what con- tributes to that view. The response was overwhelmingly positive for both residential and commercial markets.
Disposable Income, Housing Construction Drive Market Growth
A few of the manufacturers we spoke with cited an uptick in how consum- ers are spending as a result of pent- up consumer demand, fueled by a healthy housing market. Growing disposable income of the middle- class urban population and rising aspirations toward better lifestyle are some of the major factors estimated to drive demand for tankless water heaters, notes PMR As new housing construction is on the rise, the market outlook for tankless water heaters also will see increased steady growth for 2022 and 2023, says Chia Lin, product manager at Navien. He adds that, in fact, many manufacturers are strug- gling to keep pace with demand. Andrew Tran, marketing manager at Noritz America, agrees: Were still anticipating a great nish to the 2022 year in terms of residential due to the real estate market being so hot and tankless being a complimentary purchase. Regarding the commercial market, David Federico, senior director of marketing at Rinnai America Corp., says that continued recovery from declines caused by the COVID-19 pandemic results in additional in- vestment in their facilities. Chris Bove, DHT's national sales manager of business development, adds: Due to COVID-19 and current government leadership, govern- ment spending has infused capital, allowing the large-scale rebuilding of plumbing infrastructure of gov- ernment-owned housing complexes and large expansions in health care. However, its not only about dis- posable income or a hot housing market. Consumers have been push- ing for higher-eiciency appliances for a long time now, and things are coming to a head in terms of plac- ing action behind their words. Its not surprising, considering that 20 percent of the energy used inside of a home goes toward heating water, notes the U.S. Department of Ener- gy's Energy.gov site. The percentage varies within commercial settings but is still signicant. With growing signicance on stringent energy eiciency norms and increasing consumer awareness, demand for tankless water heaters is expected to register signicant growth, PMR says.
Energy-Eiciency and Decarbonization Drivers
Almost all the manufacturers we spoke with pointed to consumer awareness and demand around energy eiciency as the driving force within the industry. Dan Moroid, director of product management at Bosch Heating and Cooling North America, notes that
NO SIGN OF SLOWING DOWN
As consumers demand more innovation and efficiency, tankless water heater manufacturers are ready and willing to heed the call.
BY LINDA P. NOIR