Small Caliber Ammunition Market Growth & Trends
The global small caliber ammunition market size is expected to reach USD 11.30 billion by 2030, according to a new report by Grand View Research, Inc. It is expected to expand at a CAGR of — 0.7% from 2022 to 2030. This growth can be attributed to rising defense expenditure by countries across the world. In addition, a rise in hunting and sporting activities is expected to aid the industry growth.
The components for small caliber ammunition include cartridge casing, propellant, bullet lead, bullet penetrator, primer, and primer. The raw material suppliers provide customer-specific customized solutions. Furthermore, factors influencing value addition in this stage include price, availability of materials, cost position, quality, delivery timelines, and product innovation.
The small caliber ammunition industry is witnessing a huge rise in stockpiling trends owing to the emergence of warlike situations across the globe, driven by rising geopolitical tension and terrorist activities in several economies. The stockpiling strategy primarily offers significant cost savings as it can be purchased in high volume at cheap prices. This is, in turn, providing growth opportunities to the industry players.
Developments and enhancement of military capabilities in Morocco, Algeria, Tunisia, and other African countries are anticipated to increase the procurement of small to large-sized weapon systems, which is likely to increase the demand for suitable caliber ammunition. Moreover, a rise in political disputes in the Middle East, Africa, and Central and South America is expected to support the demand for small caliber ammunition in the estimated time.
The small caliber ammunition manufacturers can only sell their products to an entity with a federal license, which can be either retailer, wholesaler, or an individual user. Distribution through the B2C channel is very rare in this industry, however, it does exist. If an individual user wants to obtain the product directly from the manufacturer, they must provide their federal firearms license.
Small caliber ammunition manufacturers procure the components from raw material suppliers either directly or through third-party distributors under competitively priced supply contracts or bidding arrangements. The product manufacturers procure raw materials from the suppliers to further offer customized solutions to their clients. They also enter into long-term contracts with raw material suppliers to maintain a robust supply.
Major small caliber ammunition manufacturers across the globe including General Dynamics and Northrop Grumman are vertically integrated across the value chain and are partially involved in the supply of raw materials. Moreover, these companies have established a wide distribution channel in the Middle East, African, and Asian countries through joint ventures, mergers, and agreements.
Request a free sample copy or view report summary: Small Caliber Ammunition Market Report
Small Caliber Ammunition Market Report Highlights
The .50 BMG caliber segment is expected to witness significant growth over the forecast period owing to the increasing procurement of machine guns and sniper rifles. The .50 BMG cartridge has a soft steel-core bullet and is used for practice in the M2, M3, and M85 machine guns
The defense application segment accounted for the largest revenue share in 2021 and is expected to dominate the market over the forecast period owing to the increasing demand from prominent military across the globe. Continuous upgrading and standardization of the bullets and other ammunition used by the defense sector will also result in the growth of this segment
Asia Pacific is expected to witness considerable growth over the forecast period. The region has witnessed an unprecedented surge in defense spending over the past decade. Rising geopolitical tension and border disputes between the regional powers have been the primary driving factors boosting defense spending in the region
The industry demand was hampered owing to the global outbreak of the COVID-19 pandemic in 2020. The subsequent economic impact of COVID-19 has curtailed the defense spending by the countries in 2020, thereby affecting the small caliber ammunitions demand
The market is characterized by acquisitions and joint ventures between major players and the government to establish long-term contracts. It is slowly moving towards consolidation due to increasing acquisitions in the market. Major players in the ammunition market exhibit an extensive product portfolio and are focused on product innovation in order to increase their market share and maintain their market position
Comments