NAICS 423740 Quarterly Industry Report
Refrigeration Equipment and Supplies Merchant Wholesalers
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 423740Sector: Wholesale Trade (42)Updated: Q1 2026
About This Report
This Fair Market Value industry report for NAICS 423740 integrates data from the U.S. Census Bureau[5] economic surveys, Bureau of Labor Statistics[6] employment data, and SBA size standard publications[7]. Our research team tracks foodservice industry expansion, refrigerant regulation changes, and commercial equipment demand to provide valuation context for refrigeration wholesale operations. Updated quarterly, each data point is traced to its originating government or institutional source.
Industry Snapshot
Key metrics for the refrigeration equipment and supplies merchant wholesalers industry.
Industry Definition & Overview
Refrigeration Equipment and Supplies Merchant Wholesalers (NAICS 423740) encompasses establishments primarily engaged in the merchant wholesale distribution of refrigeration equipment, excluding household-type refrigerators, freezers, and room air conditioners. Product categories include commercial reach-in and walk-in coolers, commercial freezers, refrigerated display cases, ice machines, beverage coolers, condensing units, compressors, cold storage equipment, and commercial refrigeration parts and supplies.
The commercial refrigeration wholesale channel serves foodservice operations, grocery stores, convenience stores, cold storage facilities, and institutional buyers. Equipment sales often involve technical specification, installation support, and ongoing maintenance parts supply. According to the U.S. Census Bureau[5], household refrigerators and room air conditioners are classified under NAICS 423620, and air-conditioning systems fall under NAICS 423730, creating clear classification boundaries.
Refrigerant management has become increasingly important as environmental regulations phase down high-global-warming-potential refrigerants in favor of lower-GWP alternatives. Distributors must track refrigerant certification requirements and maintain EPA-compliant handling procedures. The transition to natural refrigerants like CO2 and propane in commercial applications is reshaping product lines and requiring distributors to stock new components and train service technicians. Energy efficiency standards for commercial refrigeration equipment continue to tighten, driving equipment upgrade cycles and replacement demand among foodservice operators and retail grocery chains. Supermarket refrigeration system retrofits represent a particularly active segment as grocery operators convert from older high-GWP systems to compliant alternatives.
What's Included in This Industry
- Commercial walk-in cooler and freezer wholesale distribution
- Refrigerated display case wholesale operations
- Ice machine wholesale distribution
- Beverage cooler wholesale operations
- Commercial condensing unit wholesale distribution
- Refrigeration compressor wholesale operations
- Cold storage equipment wholesale distribution
- Refrigeration parts and supply wholesale operations
- Drinking fountain (refrigerated) wholesale distribution
- Commercial refrigeration control wholesale operations
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Wholesale Trade | 42 |
| Subsector | Merchant Wholesalers, Durable Goods | 423 |
| Industry Group | Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers | 4237 |
| NAICS Industry | Refrigeration Equipment and Supplies Merchant Wholesalers | 42374 |
| National Industry | Refrigeration Equipment and Supplies Merchant Wholesalers | 423740 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 423730 | Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers | Warm air heating and air-conditioning equipment wholesalers distribute HVAC systems classified separately from the commercial refrigeration equipment here |
| 423720 | Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers | Plumbing and heating equipment merchant wholesalers distribute plumbing fixtures through parallel wholesale channels serving different contractor trades |
| 423620 | Household Appliances, Electric Housewares, and Consumer Electronics Merchant Wholesalers | Household appliance merchant wholesalers distribute residential refrigerators and freezers excluded from this commercial refrigeration classification |
| 423440 | Other Commercial Equipment Merchant Wholesalers | Other commercial equipment merchant wholesalers distribute restaurant cooking equipment that complements commercial refrigeration in foodservice installations |
| 333415 | Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing | Air-conditioning and refrigeration equipment manufacturing produces the commercial cooling systems distributed through refrigeration wholesale channels |
| 423710 | Hardware Merchant Wholesalers | Hardware merchant wholesalers distribute general hardware items through wholesale channels that serve some of the same commercial building customers |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 13.2% | 156 |
| 2 | Florida | 9.5% | 113 |
| 3 | Texas | 8.2% | 97 |
| 4 | New York | 5.7% | 68 |
| 5 | North Carolina | 5.4% | 64 |
| 6 | Pennsylvania | 4.4% | 52 |
| 7 | Georgia | 4.1% | 49 |
| 8 | New Jersey | 3.1% | 37 |
| 9 | Illinois | 3.0% | 35 |
| 10 | Tennessee | 2.7% | 32 |
% Of Establishments
0%
13%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
40
Total SBA Loans
$7.7M
Total Loan Volume
$191K
Average Loan Size
10 yrs
Average Loan Term
10.85%
Average Interest Rate
144
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: The SBA[7] classifies Refrigeration Equipment and Supplies Merchant Wholesalers under NAICS 423740 with a size standard of 125 employees. Most commercial refrigeration distributors operate as specialized regional businesses. Qualifying firms can access SBA lending programs[8] for inventory financing, warehouse and showroom expansion, and working capital to support the technical sales and installation support services that commercial refrigeration distribution requires. Eligible businesses can access SBA 7(a) loans[9] for working capital, equipment, and acquisition financing, while 504 loans[10] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Newtek Bank, National Association | 8 | $4.0M | $500K |
| 2 | Northeast Bank | 16 | $1.3M | $79K |
| 3 | PCB Bank | 8 | $1.2M | $150K |
| 4 | Zions Bank, A Division of | 8 | $1.2M | $149K |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 423740?
NAICS 423740 covers merchant wholesalers distributing commercial walk-in coolers, freezers, refrigerated display cases, ice machines, beverage coolers, condensing units, compressors, and refrigeration parts. Per the U.S. Census Bureau[5], household-type refrigerators and room air conditioners are excluded and classified under 423620.
How is NAICS 423740 organized within the classification system?
This code belongs to Industry Group 4237 (Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers), Subsector 423 (Merchant Wholesalers, Durable Goods), and Sector 42 (Wholesale Trade). It shares Industry Group 4237 with 423710 (hardware), 423720 (plumbing), and 423730 (HVAC).
What is the SBA size standard for NAICS 423740?
The SBA[7] sets the size standard at 125 employees for Refrigeration Equipment and Supplies Merchant Wholesalers. Firms below this threshold qualify as small businesses for federal contracting and SBA financing.
Which NAICS codes are most closely related to 423740?
HVAC wholesalers (423730) distribute air-conditioning systems separately. Commercial equipment wholesalers (423440) handle restaurant cooking equipment. Household appliance wholesalers (423620) cover residential units. Per Census Bureau NAICS references[11], the commercial refrigeration focus distinguishes 423740 from household and HVAC codes.
What industries interact most with refrigeration equipment wholesalers?
Full-service restaurants (722511) and limited-service restaurants (722513) are major customers. HVAC contractors (238220) install and service systems. Per Bureau of Labor Statistics[6] data, foodservice industry expansion and grocery store construction drive commercial refrigeration wholesale demand.
What specific activities are included in NAICS 423740?
Activities include distributing walk-in coolers, commercial freezers, refrigerated display cases, ice machines, beverage coolers, compressors, condensing units, refrigeration parts, and cold storage equipment. Distributors manage refrigerant supply and EPA compliance requirements. Per Census Bureau definitions[5], household refrigerators and air-conditioning systems are excluded.
Can refrigeration equipment wholesalers access SBA loans?
Yes. Distributors with fewer than 125 employees qualify for SBA loan programs[8] including 7(a) loans for inventory financing and working capital, 504 loans for warehouse and showroom facilities, and microloans for delivery equipment. High-value commercial refrigeration inventory requires significant working capital.
Where are refrigeration equipment wholesalers concentrated in the United States?
Distribution operations follow foodservice and grocery industry concentrations, with locations in major metropolitan areas across the country. Sun Belt states with large hospitality sectors like Florida, Texas, and California support heavy commercial refrigeration distribution. Food processing regions in the Midwest and Southeast also host significant refrigeration wholesale operations serving cold storage and food manufacturing customers.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Bureau of Labor Statistics bls.gov
- [7]SBA size standard publications sba.gov
- [8]SBA lending programs sba.gov
- [9]SBA 7(a) loans sba.gov
- [10]504 loans sba.gov
- [11]Census Bureau NAICS references census.gov
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