Increasing Defense Expenditure: Top Driving Engine of Small-caliber Ammunition Market

The incidence of issues around the world related to terrorism, wars, and armed conflict have created a continuing demand for ammunition, globally.  This has resulted in the recent global trend of increasing defense budgets by countries around the world, with the intention of boosting military strength, modernizing the armed forces, and procurement of modern equipment.

According to the Stockholm International Peace Research Institute (SIPRI), there has been a 2.6% rise in military expenditure around the world, for security and development interests. This is likely to have a direct impact on the demand for ammunition, thus driving the growth of the small-caliber ammunition market.

The global market for small-caliber ammunition reached ~US$ 5 billion in 2018, and its applications in the military industry accounted for ~two-third revenue share of the market. This trend is unlikely to change during the forecast period, even as the rate of growth for this period over the forecast duration is expected to be 4.5%.

The modernization of defense programs and upgrading & replacement of outdated equipment to incorporate technologically-advanced systems is important on the end use level, which is a major driver behind the increased demand for ammunition in the global market. Regional instability and conflicts in pockets around the world, especially in Asia Pacific, are likely to propel the growth of the small-caliber ammunition industry in the coming years.

small caliber ammunition market infographic

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Guns for Sports and Hunting Activities Gaining Ground

The increasing use of guns in the commercial sector for both, hunting and sports has continued to fuel their demand steadily, globally. The use of firearms in the commercial sector also includes shooting sports using a variety of rifles and handguns. With a variety of shooting sport activities witnessing increasing popularity, the use of small-caliber guns has been gaining traction, which, in turn, has also encouraged the growth of the global small-caliber ammunition market with major players manufacturing specialized products for sports.

The rise in the use of small-caliber ammunition and firearms in hunting activities is mainly attributed to their accuracy, and manufacturers in the small-caliber ammunition landscape are launching innovative product to target this sector. For instance: Hornady Manufacturing Company, a prominent player in the small-caliber  ammunition market, in 2018, announced the launch of its Precision Hunter line of ammunition, marketed to have the highest levels of accuracy and performance uniformity, for diverse hunting needs.

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Public Safety Concerns to Positively Influence Small-caliber Ammunition Market Growth

According to the United Nations Office on Drugs and Crime, 464,000 deaths were caused by homicide in the year 2017, worldwide. Public safety concerns due to the rise in crime rates and homicides around the world is a very significant underlying trend that is influencing the growth of the small-caliber ammunitions market. 

Small-caliber firearms, due to their convenience, continue to be the weapons of choice, including handguns and rifles for law enforcement agencies around the world. This widespread adoption of small-caliber firearms, has, in turn, had a positive impact on the growth of the small-caliber ammunition market.

Law enforcement held the second-highest share of the small-caliber ammunition market as of 2018, and this trend is likely to continue for the duration of the forecast period.

Full Metal Jacket Ammunition to Remain Popular Choice

Among the common options for small-caliber ammunition, full metal jacket ammunition continues to remain widespread, as these are manufactured for most types of rifle and handgun cartridges. Their reliability in the feeding process, effectiveness, and their main attribute of less fouling in the barrel, improving accuracy and smoothness, makes them a popular choice in small-caliber ammunition.

As of 2018, full metal jacket ammunition held more than half the global market share, and this trend is likely to continue through the forecast period from 2019 to 2027, with tracer and incendiary ammunition flowing closely.

small caliber ammunition market segmentation

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Competitive Analysis of the Landscape

The landscape of the small-caliber ammunition market is fairly fragmented, with well-established and prominent players slowly being joined by emerging market players who occupy ~30% of the global market share. Some of the prominent players include - Northrop Grumman Corporation, Nammo AS, and General Dynamics Corporation, among others.

There has been a spurt of innovation in the small-caliber ammunition market in recent years, with developments made by companies to secure their position in the market landscape. These developments include new product innovations, acquisitions, and investments to expand portfolio and geographical presence. Some of these key developments include:

  • Fiocchi Munizioni S.P.A, a leader in small-caliber ammunition, offering a wide range of products across applications, in 2019, announced the launch of 7 new hunting shotgun cartridges. This range includes 12, 20, and 410 gauge shotgun cartridges, designed for hunting. This news comes ahead of the hunting season in 2019, giving the company an edge over its competitors.
  • Hornady Manufacturing Company, in 2018, announced the 224 Valkyrie with new 88gr ELD® Match bullet, to deliver highest-in-class ballistic co-efficients.
  • Northrop Grumman Corporation, a leading global security company, in 2018, announced the acquisition of Orbital ATK Inc., a global leader in aerospace and defense technologies. This is set to establish a strong position for Northrop Grumman Corporation in the defense industry.
  • Nammo A.S., an international aerospace and defense company, in 2019, announced its acquisition of MAC LLC, a manufacturer of lightweight polymer cartridge cases for small- and medium-caliber ammunition.
  • Nammo A.S. in 2019, also announced a collaboration with Boeing, a major player in precision guided munitions, to produce the next generation of extended range artillery projectiles. These two developments will strengthen the position of Nammo A.S. in the global ammunition market.

Analysts’ POV

Authors of the study on small-caliber ammunition estimate that, during the forecast period of 2019-2027, the market is likely to grow at a CAGR of 4.5%. The pervasive influence of technology is expected to have a big impact on the market, with manufacturers looking into technological solutions and collaborations for product innovation, to capitalize on this trend.

For stakeholders, success in the small-caliber ammunition market is likely to depend on expansion into international markets and consolidating their presence in the landscape. Market players will have to adapt to the evolving landscape by collaborating with technology and defense solution providers, and aligning their strategies, to meet the needs of various end users of small-caliber ammunition, globally.

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Small-caliber Ammunition: Definition/Overview

  • Ammunition designs have evolved over time as different types of weapons have been developed. A majority of modern small arms use cartridges as ammunition. Increasing military spending and growing number of incidences of cross-border conflicts and terrorist activities across the world are major factors anticipated to drive the global small-caliber ammunition market during the forecast period.
  • In addition, rise in the sales of different small-caliber weapons such as pistols, assault rifles, machine guns, and light machine guns, worldwide, is estimated to augment the demand for small-caliber ammunition during the forecast period.
  • In recent years, the small-caliber ammunition market has witnessed the presence of manufacturers developing ammunition with small calibers of different sizes for use in both, commercial and military applications. Moreover, the rising interest of people in activities such as hunting and shooting, and rising concerns about personal defense, are major factors likely to drive the market for small-caliber ammunition during the forecast period.

Global Small-caliber Ammunition Market: Regional Overview

  • North America is expected to hold the maximum share of the global small-caliber ammunition market during the forecast period, due to the early adoption of small-caliber ammunition in the region.
  • South America and the Middle East & Africa hold a minor market share each. However, these regions are projected to provide lucrative opportunities to the small-caliber ammunition market during the forecast period.
  • Increase in the adoption of different small-caliber ammunition for various military and defense applications is an emerging trend in Asia Pacific. China and India are expected to be a major contributors to the small-caliber ammunition market in the region in the next few years. The rising use of small-caliber ammunition for civil and defense purposes is likely to drive the small-caliber ammunition market during the forecast period. This is due to the easy availability and ease of use of small-caliber ammunition in applications ranging from sports, hunting, and military purposes.

Global Small-caliber Ammunition Market: Trends

  • The global small-caliber ammunition market has been expanding at a steady pace over the last decade, both, in terms of volume and revenue, owing to the rising demand for arms and weapons, worldwide. Technological advancements in the market, rising need for terrorism combats, and increasing geopolitical issues are fueling the global small-caliber ammunition market.
  • Rising need to prevent terrorist activities and safeguard domestic security is compelling governments across the world to constantly upgrade their arms and small-caliber ammunitions. International military organizations and national military forces are expected to continue generating demand for advanced small-caliber ammunitions during the forecast period.

Global Small-caliber Ammunition Market: Drivers, Opportunities, and Restraints

  • Defense expenditure in prominent countries such as India, China, and Japan has witnessed a significant increase in the last few years, with an objective to boost military strength, modernize the armed forces, and firmly safeguard national sovereignty, security, and development interests. For instance, according to a legislature in China, the country has increased its military expenditure by a modest level over the last few years. As of March 2018, China had the world’s second-highest defense budget of around US$ 175 Bn, which was 8.1% higher than that of the previous year.
  • Moreover, the increasing preference for different types of non-lethal weapons by riot-control forces and law enforcement agencies, worldwide, to reduce collateral damage is projected to drive the global small-caliber ammunition market in the near future.
  • On the flip side, companies are required to comply with rules and regulations imposed by various departments, such as the Department of Homeland Security, Department of State, and Department of Commerce. Violation of any law can lead to heavy penalties and can cause roadblocks in doing business. This restraint is projected to have a medium impact on the global small-caliber ammunition market in the next few years.

Global Small-caliber Ammunition Market: Key Segments

The global small-caliber ammunition market has been segmented based on type, caliber, end-use industry, and region.

  • Type
    • In terms of type, the global small-caliber ammunition market has been segregated into full metal jacket ammunition, tracer ammunition, incendiary ammunition, armor piercing ammunition, and others.
    • Full metal jacket ammunition was the dominant segment of the global small-caliber ammunition market in 2018.
    • The rising demand for small-caliber ammunition led by increasing military spending, ongoing military modernization programs, and rising incidences of cross-border conflicts & terrorist activities across the globe are major factors driving the global small-caliber ammunition market.
  • Caliber
    • Based on caliber, the global small-caliber ammunition market has been segmented into below 7 mm, 7–9 mm, 9–12 mm, and 12–14 mm.
    • Increasing terrorist activities across different parts of the globe, including countries of the Middle East & Africa (such as Iraq, Iran, Nigeria, and Syria), and current attacks on countries of APAC (such as Pakistan, Afghanistan, India, and Sri Lanka), are prompting local government agencies, police, and the military to procure small-caliber ammunition of different calibers.
  • End-use Industry
    • In terms of end-user industry, the global small-caliber ammunition market has been classified into commercial, military, and law enforcement.
    • The military segment dominates the global market, and it is projected to continue its dominance throughout the forecast period.

Small-caliber Ammunition Market - Scope of the Report

Transparency Market Research’s recent report on the small-caliber ammunition market offers a detailed analysis for a forecast period of 2019 to 2027. It provides historical data and insights into the current scenario of the small-caliber ammunition market, along with an analysis of the drivers, restraints, opportunities, and threats faced by stakeholders within the market. This report also analyzes how the underlying trends will influence the growth of the small-caliber ammunition market during the forecast period. The study takes a systematic approach to studying and analyzing the historical data and growth developments in the future of the small-caliber ammunition market. This report is designed to help readers understand the competitive analysis of the small-caliber ammunition market, and gauge the future trajectory of progression.

The report consists of a blend of qualitative and quantitative analysis of data, essential for players in the small-caliber ammunition market to formulate strategies for the future. The report, in its scope, offers readers a Porter’s Five Forces Analysis and a Value Chain Analysis. This report includes an in-depth assessment of the various competitors in the small-caliber ammunition market, their product portfolios, revenues, strategies, and key developments.

In this report, readers gain an all-inclusive outlook on the key dynamics that are influencing the evolution of the small-caliber ammunition market that can help players assess the growth of the competitors in the field.

Segments of the Small-caliber Ammunition Market

This study by Transparency Market Research on the small-caliber ammunition market categorizes the information into type, caliber, end use, and region.

Readers will find data and analytics on how the changing trends will impact the evolution and dynamics of the small-caliber ammunition market, on a regional and component level.

Type

Caliber

End Use

Region

 

 

 

 

Full Metal Jacket Ammunition (FMJ)

Below 7 mm

Commercial

North America

Tracer Ammunition

7-9 mm

Military

Europe

Incendiary Ammunition

9-12 mm

Law Enforcement

Asia Pacific

Armor Piercing Ammunition

12-14 mm

 

Middle East and Africa

Other Ammunition

 

 

South America

Key Questions Answered in the Small-caliber Ammunition Market Report

  • What are the drivers and deterrents in the small-caliber ammunition market?
  • What opportunities present themselves to players in the small-caliber ammunition market?
  • What are the underlying trends of the small-caliber ammunition market that are expected to influence the growth of the market?
  • Are there any specific strategies followed by key players in the small-caliber ammunition market to help themselves consolidate their position?
  • What are the factors expected to impact the evolution of the small-caliber ammunition market?
  • What will be the revenue share of each of the different components of the small-caliber ammunition market?
  • Which region will dominate the small-caliber ammunition market at the end of the forecast period?

Research Methodology

The research methodology employed by TMR for this report on the small-caliber ammunition market consists of primary and secondary research, the latter in greater proportion. With an extensive internal repository and access to an external proprietary database, this report helps address specific details and questions on the small-caliber ammunition market.

Sources of the information for primary and secondary research for the small-caliber ammunition market include interviews with key opinion leaders, statistics from governmental organizations, annual reports of companies, research papers and journals, and paid data bases as well. Analysts also utilized a top- down method for calculating the numbers and a bottom-up approach for verifying the accuracy of the same.

This detailed assessment on the small-caliber ammunition market provides an analysis of the competitive landscape, based on the extensive examination of various avenues related to this industry. Analysts’ conclusions on the small-caliber ammunitions market and how it is set to grow are based on qualitative insights from carefully vetted primary and secondary sources.

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