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Small Caliber Ammunition market

The vast majority of modern small arms use cartridges as ammunition. In the field of small-caliber ammunition, the terms ‘cartridge’ and ‘round’ are synonymous: both refer to a single complete unit of ammunition.


Components for small caliber ammunition

The components for small caliber ammunition include cartridge casing, propellant, bullet lead, bullet penetrator, primer, and primer.

Modern small-caliber cartridges are generally comprised of:
1. A projectile, or bullet, which is fired from the gun. It typically consists of a ‘core’ and ‘jacket’.
2. Propellant, which, when ignited, generates the gas pressure that propels the projectile out of the barrel.
3. A primer, which contains chemical compounds designed to be ignited by a firing pin. The primer then, in turn, ignites the propellant.
4. A cartridge case, which contains the components of a complete round of ammunition and, when the weapon is fired, blocks the escape of gases in a way that causes pressure to build up behind the projectile

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.

Small Caliber ammunition types

Small caliber ammunition is .50 caliber and below. Conventional small caliber ammunition in production and deployment consists of 5.56 mm, 7.62 mm, 9 mm, 10- and 12-gauge, .22 caliber, .30 caliber, .38 caliber, .45 caliber, .300 Winchester Magnum (WinMag) and .50 caliber.

The 5.56 mm cartridge is used in the M16 Rifle, M4 Carbine and M249 Squad Automatic Weapon. The 7.62 mm cartridge is used in the M240 Machine Gun, M24 Sniper Weapon System, M110 Semi-automatic Sniper System and the M14 Rifle.

The 9 mm cartridge is fired in the M9, M17 and M18 Pistols. The M2010 Enhanced Sniper Rifle uses the .300 WinMag cartridge. The M2 Machine Gun and the M107 Sniper Rifle use .50 caliber cartridges.

The remaining small caliber ammunition is used in a variety of pistols, rifles and shotguns.

Small caliber ammunition in research and development consists of Lightweight Case, advanced armor-piercing capabilities, reduced range ammunition, one-way luminescence trace ammunition, lead free primer, all-purpose tactical cartridge and next generation projectiles.

Three categories of small caliber ammunition are currently in use. War reserve ammunition is ammunition with overmatch capability that supports individual and crew-served weapons during combat operations; training standard ammunition is dual-purpose and can be used to support both training and operational requirements; and training-unique ammunition is designed specifically for use in training and is not authorized for use in combat (i.e., blank, dummy-inert, close combat man marking and short-range training ammunition).


Small Caliber Ammunition Global Market

The global ammunition market is huge. The global small caliber ammunition market is projected to grow from $8.00 billion in 2022 to $9.41 billion by 2029, at a CAGR of 2.35% in forecast period.

The market is growing rapidly every year because of many factors, such as increased procurement by the military, security forces, and the threat of terrorist activities worldwide. There have been hundreds of incidents of shooting and terrorist attacks globally in the last decade.



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.

Growing number of cross-border conflicts and the rising gun demand for recreational shooting activities will drive the ammunition industry trend. In 2022 the invasion of Ukraine by Russia demonstrates the unstable international relations among a few countries. The rising Indo-China tensions and other conflicts in the Asian region will further create a need for reinforcing military forces. Increased spending in air force and naval expansion in the region will influence the demand for ammunition.

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.

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.

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.

Defense Industry Witnessed Steady Growth Owing to COVID-19 Pandemic

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 ammunition demand

The gun and ammunition industry witnessed unmatched challenges due to COVID19 pandemic (all countries except the U.S.). 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 growing concerns about personal safety and a fluctuating economy. 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 firearms were purchased by first-time buyers.

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.



Growing Demand for Environment-Friendly Ammunition Leads to the 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 Drive 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.



Differences in Economic, Legal, and Political Regulations to Restrict 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.



By Caliber Analysis

5.56*45 and 7.62*39/54r Caliber Segment to Gain Momentum

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
2022-2029. 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 & hunting and self-defense. The military & homeland security segment held the highest market share in 2021. 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.

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.

By Bullet Type Analysis

Increasing Demand for Bullets for Hunting and Sports Shooting to Propel 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, selfdefense, 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


Geographical Insights

The market has been segmented into North America, Europe, Asia Pacific, and rest of the world. The presence of key or prominent players in North America, which includes Olin Corporation, Northrop Grumman Corporation, and General Dynamics Corporation is also projected to boost the market.

Asia Pacific will witness substantial growth during 2022-2029. 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.


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.

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.

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

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.


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)


June 2020 – Thales Group signed a 10-year contract with the Australian government for the production and supply of strategic munitions. The value of the Strategic Domestic Munitions Manufacturing (SDMM) contract is worth USD 686.7 million.

June 2020 – The U.S. Department of Defense (DoD) signed a contract with Winchester Ammunition for the delivery of 9mm frangible ammunition. The value of the contract is worth USD 38 million. The ammunition will be used for indoor/outdoor Close Quarter Battle (CQB) training.



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