Small Caliber Ammunition Market Size, Share, and COVID-19 Impact Analysis, by Caliber (223 Remington, 308 Winchester, 9mm Luger, 45 Auto/ACP, 380 ACP, 357 Magnum, 10 Gauge, 12 Gauge, 40 S&W, 20 Gauge, 22LR, 50 BMG, 6.5 Grendel, 7.62*39/54r, 5.56*45, 0.338 Lapua, 30-06 Springfield, and Others), By Application (Commercial (Shooting Sports & Hunting and Self-defense), Military, and Homeland Security), By Bullet Type (Lead, Copper, Brass, and Others), and Regional Forecast, 2023-2030

The global small caliber ammunition market size was valued at USD 8.00 billion in 2022 and is projected to grow from USD 8.11 billion in 2023 to USD 9.78 billion by 2030, exhibiting a CAGR of 2.72% during the forecast period. North America dominated the small caliber ammunition market with a market share of 55.5% in 2022. Moreover, the small caliber ammunition market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 5,042.2 million by 2029, driven by growing demand for environment-friendly ammunition leads to the development of green ammunition.

Small-caliber ammunition is used for various purposes, including self-defense, target shooting, hunting small game, and even military applications. Small caliber ammunition is the combination of cartridges and bullets fired or dispersed from a weapon, particularly from a gun. It contains gunpowder and primers for blastoff or explosion. These are the canisters used with fuses, boosting charges used in different gun types, small arms, and artillery. Such ammunition is produced utilizing a diversity of materials such as brass, steel, and others. The increase in the procurement of ammunition by the armed forces, local enforcement agencies, and border security forces is driving the market growth. Furthermore, the surging usage of ammunition for sports and hunting activities in North America, especially in the U.S., is expected to propel the development of the ammunition has the potential growth of the market across the region.

COVID-19 IMPACT

Defense Industry Witnessed Steady Growth Owing to COVID-19 Pandemic

The COVID-19 pandemic moderately impacted the defense and commercial ammunition industry, but the market has showcased moderate growth in 2020 & 2021 due to use of small guns in the U.S. people fir their self-protection in the lockdown is anticipating the market growth.

• The U.S. firearm sales surged in March 2020 and reached 120,000 per day. A sudden increase in gun and ammunition sales was fueled by the growing concerns about personal safety and a fluctuating economy.


• According to the Federal Bureau of Investigation (FBI), firearm background checks were at an all-time high during the COVID-19 outbreak. The National Instant Criminal Background Check System (NICS) showed 14 million checks between March 2020 and June 2020.


• Due to the COVID-19 pandemic, people in the U.S. felt insecure, thus increasing the number of first-time gun and ammunition owners. The National Shooting Sports Foundation (NSSF) estimates that in the first quarter of 2020, 40% of the firearms were purchased by first-time buyers.


• The gun and ammunition industry witnessed unmatched challenges due to COVID-19 pandemic (all countries except the U.S.). Janes.com, an open-source defense intelligence company in the U.K. forecasts that defense expenditures in European countries will be around USD 288.8 billion in 2021, reflecting a 0.97% decrease from the previous year.

LATEST TRENDS

Growing Demand for Environment-Friendly Ammunition Leads to Development of Green Ammunition

Nowadays, companies and military agencies are looking forward to designing and developing environment-friendly ammunition. In an effort to protect the ecosystem, the U.S. army has been involved in the designing and development of biodegradable bullets, with its focus being on reducing soil contamination. The hazardous materials used in ammunition, such as lead, create soil contamination; hence, companies and government agencies are focusing on eliminating lead by using polymer-cased ammunition. This also reduces the weight and costs of ammunition for guns.

For instance, in July 2020, according to U.S. Army Publication, the U.S. Army was searching for ammunition solutions to comply with lead contamination-associated environmental regulations. The Army Research Laboratory of Combat Capabilities Development Command and Purdue University are involved in the development process of environment-friendly primary explosives with its application in small, medium, and large-caliber ammunition and gun propellant ammunition.

Development of Advanced Tracer Ammunition and Frangible Ammunition Drives the Market Growth

Ammunition is often designed and developed by considering its applications in mind. In the current decade, the design and development of advanced ammunition such as copper FMJ (copper full metal jacketed), frangible ammunition, and tracer ammunition. Copper or zinc full metal jacketed ammunition is used for commercial, military, and homeland defense applications where accuracy plays a great role. Frangible ammunition is mostly used for Close-Quarter Military Battle (CQB) training for self or homeland defense. It is mostly used for shoot-to-injure applications in military and homeland security operations. These are non-toxic in nature, have less muzzle velocity, and are lightweight.

Tracer ammunition is also gaining popularity in the armed forces. In this, the bullet travels through the air, emits an intense light, trails smoke, and helps to see the bullet’s path. These types of ammunition were recently used by the military and civilians for a better shooting experience. For instance, in September 2021, Ammo Inc. was awarded a contract to design and manufacture SoT (signature-on-target) tracer ammunition to support military operations by the U.S. Department of Defense.

DRIVING FACTORS

Increasing Usage of Guns for Personal Safety to Propel Market Growth

Small caliber ammunition is majorly used for civilian applications such as sports shooting, hunting, personal safety, and others. Increasing instances of mass shootings, especially in the U.S. and Australia, growing terrorism activities, and rising demand from defense forces are driving the market growth. In August 2020, there was a shooting incident in a social gathering at 3,300 blocks of Dubois Place southeast that killed a girl and injured 19 other people. Handguns are used primarily by military officers and policemen as sidearms. The U.S. has a huge market for civilian firearms, and thus, there is a rise in demand for the ammunition necessary for pistols and revolvers.

In addition, an upsurge in the manufacturing of handguns, shotguns, light machine guns, short-range rifles, and large gun imports and exports across the globe are also aiding the growth of the market. Furthermore, the growing number of mass shooting instances every year in the U.S. has heightened personal security concerns among citizens. As per the data released by Gun Violence Archives (GVA), there were 366 mass shooting incidents recorded in the U.S. till November 2019 that killed 406 people.

Military Modernization Programs in Major Countries to Boost Market Growth

The rising threat of terrorist activities, political unrest across the globe, and geopolitical tensions in the Asian and Middle Eastern countries have led to the procurement of next-generation ammunition and associated equipment to enhance the defense capabilities of countries. An increase in ammunition procurement and military modernization programs in several countries, such as China, Saudi Arabia, Russia, and India, is boosting the growth of the market.

Military spending for R&D activities and increasing ammunition procurement contracts have significantly surged across the world, specifically in the U.S. Increasing defense budgets of developing countries for enhancing military strength is auguring well for this market. For example, in the defense budget 2020, the U.S. Department of Defense allotted USD 201.6 million for the procurement of small ammunition for the U.S. Army. These factors will drive the small caliber ammunition market growth.

RESTRAINING FACTORS

Differences in Economic, Legal, and Political Regulations to Restrict Market Growth

Governmental rules & regulations regarding the ownership of guns and ammunition vary among countries. As a result, the Original Equipment Manufacturers (OEMs) of small arms and ammunition encounter challenges posed by the stringent government norms and extensive certification processes. India has some strictest gun laws in the world. In India, prospective gun owners have to show they are trained and must secure them in a knocked down condition in gun lockers. These strict gun laws impact key players’ contracts and procurement processes across countries. The international trade of small caliber ammunition is highly controlled by many regulatory authorities such as law enforcement agencies and homeland security. Therefore, this hampers the market growth.

In the U.S., after the 2016 Presidential election, there was a continuous decline in gun sales, which affected the market. Previously, the U.S. government imposed stringent regulations on firearm ownership. According to Grifford’s Law Center, buyers had to undergo background checks to get ammunition and firearm licenses in the states of New Jersey, Illinois, Connecticut, and Massachusetts. These factors are expected to hinder the growth of the market during the forecast period.

SEGMENTATION

By Caliber Analysis

5.56*45 and 7.62*39/54r Caliber Segment to Gain Momentum Increasing Use Of Handguns And Rifles 

Based on caliber, the market is segmented into 223 Remington, 308 Winchester, 9mm Luger, 45 Auto/ACP, 380 ACP, 357 Magnum, 10 Gauge, 12 Gauge, 40 S&W, 20 Gauge, 22LR, 50 BMG, 6.5 Grendel, 7.62*39/54r, 5.56*45, 0.338 Lapua, 30-06 Springfield, and others. Among these, the 22LR caliber segment holds the highest small caliber ammunition market share during the forecast period owing to the increasing use of caliber in handguns as well as rifles worldwide. The increasing use of handguns and rifles for commercial and military applications will further drive the segmental growth.

The 5.56*45 and 7.62*39 segments will continue to grow with the highest CAGR during 2023-2030. These are the popular rifle caliber ammunition used by military forces in different countries. Increasing defense expenditures and procurement of advanced rifles are expected to drive the adoption of these calibers.

The 9mm Luger segment is the most widely used handgun cartridge in the U.S. Handguns are widely used in hunting, sports shooting, and self-defense. The growing demand for pistols for a variety of utilizations is set to increase the demand for the 9mm Luger caliber.

By Application Analysis

High Adoption of Handguns and Rifles in Military and Homeland Security Operations to Drive Growth 

Based on application, the market is classified into commercial and military & homeland security. The commercial segment is further grouped into shooting sports and hunting and self-defense. The military & homeland security segment accounted the highest market share in 2022. Increasing demand for small caliber ammunition in military modernization programs and increasing defense expenditures from several countries across the globe boost the growth of the market.

The commercial segment is projected to grow with a significant CAGR during the forecast period. This growth is attributed to the increasing demand for small caliber ammunition for sports and hunting activities in North America, especially in the U.S. The presence of a large number of shooting ranges and rising personal security concerns are fueling the growth of the market. Amid the ongoing COVID-19 pandemic, the U.S. has showcased the surge in gun and ammunition purchases due to personal safety concerns to 8.4 million first-time gun buyer registrations.

By Bullet Type Analysis

Increasing Demand for Copper Bullets for Hunting and Sports Shooting to Propel Market Growth

By bullet type, the market is classified into lead, copper, brass, and others. The copper bullet segment is anticipated to showcase remarkable growth owing to the extremely consistent performance and lightweight features of copper bullets. In addition, copper bullets provide accuracy and deeper penetration. Due to the high demand for environment-friendly ammunition and the utility of accuracy in commercial and military & homeland security segments, the copper segment is anticipated to drive the segmental market growth.

The lead segment is estimated to hold a considerable market share during the forecast period due to applications of lead bullets in a variety of activities such as hunting, self-defense, shooting cans or bottles, or shooting target points. Due to environmental risks of soil contamination, the utility of lead in ammunition manufacturing has been reduced over the forecast period.

REGIONAL INSIGHTS

The market has been segmented into North America, Europe, Asia Pacific, and Rest of the World.

The North America is the dominating region in the global market. The presence of key players in North America, which includes Olin Corporation, Northrop Grumman Corporation, and General Dynamics Corporation is also projected to boost the market growth.

Asia Pacific will witness substantial growth during 2023-2030. The growth is attributed to the rising number of terrorist activities in Asian countries.  Growing political conflicts, and increasing investments from several countries in defense operations and military modernization programs across the region. In 2020, the defense budgets of China, India, Japan, and South Korea were USD 237 billion, USD 61 billion, USD 49 billion, and USD 44 billion, respectively.

In Europe, the presence of key players, such as BAE Systems plc, Nammo AS, RUAG Group, and KNDS N.V., will drive the regional market growth. Growing investments in Europe from private defense companies for the development of advanced calibers are anticipated to boost the market growth.

The Middle East & Africa is set to register remarkable growth during the forecast period. This growth is owing to the increasing expenditure on defense and the strengthening of military forces by several countries such as Saudi Arabia, Turkey, and Israel. Latin America is estimated to grow with a significant CAGR owing to rising defense spending from Brazil and Argentina.

KEY INDUSTRY PLAYERS

Key Players Focus on Business Expansion Strategies by Securing Contracts with Defense Forces

The key Original Equipment Manufacturers (OEMs) are majorly focusing on business expansion through contracts with defense forces of different countries. In April 2020, for instance, Nammo AS signed a contract worth USD 68.3 million with the Swedish Defense Materiel Administration for the delivery of small caliber ammunition. This enables the Swedish Armed forces to strengthen their military training program. The contract covers deliveries from 2020 to 2022. In addition, in July 2020, Fiocchi of America invested USD 15 million to expand its existing production facility in Southwest Little Rock, U.S. The plant produces components for ammunition and will be converted into a full-production facility, mainly for center-fire ammunition and has the accounted for the largest market share.

LIST OF KEY COMMPANIES PROFILED:

• Aguila Ammunition (Mexico)


• BAE Systems (U.K.)


• Denel SOC Ltd (South Africa)


• General Dynamics Corporation (U.S.)


• Nammo AS (Norway)


• Northrop Grumman Corporation (U.S.)


• Olin Corporation (U.S.)


• RAUG Group (Switzerland)


• Remington Arms Company LLC (U.S.)


• Sellier & Ballot (Czech Republic)


• Vista Outdoor, Inc. (U.S.)


• Elbit Systems Ltd. (Israel)


• KNDS N.V. (France)


• Thales Group (France)

KEY INDUSTRY DEVELOPMENTS:

• February 2023 - U.S. Army has awarded the contract to Winchester Ammunition to production, test, and supply 5 million 6.8mm Next Generation Squad Weapon (NGSW) cartridges.


• December 2021 - The U.S. Army awarded a contract to Winchester Ammunition to development of manufacturing processes for the 7.62 mm cartridge. The contract valued around USD 13 million.


• April 2020 – The Swedish Defense Materiel Administration awarded a contract to Nammo AS to delivery of small caliber ammunition to Swedish Armed Forces. Under the agreement the valued of the contract was around USD 6.5 million.


• January 2020 – The Israeli Ministry of Defense (IMOD) awarded a contract to Elbit System to Supply Small Caliber Ammunition. The contract valued was around USD 144 million.


• April 2019 – The U.S. Army awarded a contract to Northrop Grumman to supply small-caliber ammunition. Under this contract the company will supply 5.56mm, 7.62mm and Cal. 50 cartridges to U.S. Armed Forces. The contract valued worth around USD 194 million.

REPORT COVERAGE

The market research report provides an in-depth technical analysis of the market and majorly focuses on key aspects such as leading market players, COVID-19 effect on the market, leading technological trends, and research ideology of the product. Besides this, the report offers insights into the current market trends and highlights key industry developments & trends. In addition, the report analyzes factors that will contribute to the growth of the market during the forecast period.

REPORT SCOPE & SEGMENTATION