Market Analysis – 27112920 – Forecourt equipment

Market Analysis Brief: Forecourt Equipment (UNSPSC 27112920)

Executive Summary

The global forecourt equipment market is currently valued at an est. $18.5 billion and is navigating a period of significant transformation. While growth in developing regions supports a modest 3-year CAGR of 2.8%, the market faces a critical inflection point due to the electric vehicle (EV) transition. This presents both the single greatest threat to traditional equipment demand and the most significant opportunity for suppliers who can pivot to integrated EV charging and modernized retail experiences. Strategic sourcing must now prioritize modularity and future-proofing to avoid stranded assets.

Market Size & Growth

The Total Addressable Market (TAM) for forecourt equipment is projected to experience slow but steady growth, driven by infrastructure build-outs in the Asia-Pacific region and upgrade cycles in mature markets. The primary growth catalyst is shifting from new petroleum sites to retrofits incorporating EV charging, advanced lighting, and digital signage. The three largest geographic markets are 1. North America, 2. Asia-Pacific, and 3. Europe.

Source: Aggregated estimates from industry analysis reports.

Key Drivers & Constraints

1. EV Transition (Driver/Constraint): The shift to electric vehicles is the dominant market force. It constrains demand for traditional fuel dispensers and tanks in mature markets but drives massive investment in DC fast charging infrastructure, electrical upgrades, and new canopy designs.
2. Consumer Experience & C-Store Integration (Driver): Fuel retailers are increasingly competing on customer experience. This drives demand for brighter and safer LED lighting, digital signage, contactless payment systems, and integrated solutions for car wash and convenience store operations.
3. Regulatory Pressure (Driver): Stricter environmental regulations globally mandate upgrades for vapor recovery, leak detection, and stormwater management, forcing replacement cycles and increasing compliance costs.
4. Developing Market Growth (Driver): Expansion of road networks and vehicle ownership in India, Southeast Asia, and Africa continues to fuel demand for new-build, traditional filling stations.
5. Input Cost Volatility (Constraint): Prices for steel (canopies), aluminum (signage), and semiconductor components (payment systems, dispensers) remain volatile, pressuring manufacturer margins and leading to price instability for buyers.

Competitive Landscape

Barriers to entry are High, characterized by significant capital investment for manufacturing, extensive service and distribution networks, stringent safety and environmental certifications (e.g., UL, ATEX), and established relationships with major oil companies.

⮕ Tier 1 Leaders * Dover Corporation (NYSE: DOV): A market giant through its OPW and Wayne Fueling Systems brands, offering end-to-end solutions from underground piping and tanks to dispensers and nozzles. * Vontier Corporation (NYSE: VNT): Owner of Gilbarco Veeder-Root, a dominant force in fuel dispensers, payment technology, and environmental monitoring systems. * LSI Industries Inc. (NASDAQ: LYTS): Leading provider of petroleum forecourt solutions, specializing in lighting, graphics, canopies, and integrated digital signage.

⮕ Emerging/Niche Players * Tritium (NASDAQ: DCFC) / ABB (SWX: ABBN): EV charging hardware specialists aggressively partnering with fuel retailers to integrate their technology into forecourts. * Franklin Fueling Systems: Specializes in the "wet stock" side of the business, including submersible pumps, piping, and fuel management systems. * WashTec AG (ETR: WSU): A global leader in the car wash equipment niche, a key component of the modern forecourt offering.

Pricing Mechanics

Pricing is typically project-based, comprising equipment costs, installation, and often civil engineering work. The equipment price build-up consists of raw materials (30-40%), labor and manufacturing overhead (20-25%), R&D/SG&A (15-20%), and supplier margin (15-25%). For large-scale rollouts, enterprise buyers can negotiate volume discounts, standardized specifications, and service-level agreements.

The three most volatile cost elements are: 1. Steel (Hot-Rolled Coil): Used for canopies and structural islands. Price has fluctuated significantly, with peaks over 40% higher than pre-pandemic levels before recently stabilizing. [Source - World Steel Association, 2023] 2. Semiconductors: Critical for payment terminals, digital displays, and dispenser controls. Shortages have driven component price increases of 20-300% over the last 24 months. 3. Aluminum: Used in signage and trim. LME aluminum prices have seen swings of +/- 30% in the last two years.

Recent Trends & Innovation

• Integrated EV & Fuel Solutions (Q1 2023): Major suppliers like Gilbarco Veeder-Root are now marketing comprehensive site solutions that combine traditional dispensers with DC fast chargers, managed under a single point-of-sale and site management platform.
• M&A for Diversification (Oct 2021): Vontier acquired DRB Systems, a leading provider of car wash point-of-sale and workflow software, signaling a strategic push by legacy players to capture more revenue streams within the forecourt ecosystem.
• "As-a-Service" Models (2023-2024): Emerging players are offering "Charging-as-a-Service" models, where they own and operate the EV charging equipment, selling electricity to the site host. This lowers the upfront capital barrier for fuel retailers.
• Advanced Site Analytics (2022-2024): Use of AI and IoT sensors to monitor customer traffic flow, dispenser uptime, and C-store purchasing behavior is becoming a key value-add from technology providers to optimize site profitability.

Supplier Landscape

Regional Focus: North Carolina (USA)

North Carolina presents a robust and evolving demand profile. The state's position as a major logistics hub with high traffic on corridors like I-95 and I-40 ensures steady demand for new-build and upgraded truck stops. Strong population growth in the Charlotte and Research Triangle regions supports retail fuel and C-store expansion. Crucially, Gilbarco Veeder-Root is headquartered in Greensboro, providing a significant local manufacturing base, R&D talent, and a simplified supply chain for projects in the region. State and federal incentives for EV infrastructure are accelerating demand for forecourt conversion projects, creating a dual market for both traditional and next-generation equipment.

Risk Outlook

Actionable Sourcing Recommendations

1. Mandate EV-Ready Infrastructure. For all new-build and canopy-replacement RFPs, require pre-installation of electrical conduit and structural support points for future Level 3 DC fast chargers. This forward-looking specification reduces future retrofitting costs by an estimated 20-30% per site and minimizes operational downtime. Partner with suppliers like LSI and Gilbarco who offer integrated designs for this dual-use infrastructure.
2. Implement a TCO Model for Lighting & Digital Assets. Shift procurement evaluation from upfront CapEx to a 5-year Total Cost of Ownership model. Prioritize suppliers offering extended warranties (5-10 years) on LED lighting and digital displays. This strategy can reduce long-term energy and maintenance costs by over 40% while improving site safety and appeal, justifying a potential initial price premium.