This market characterization report is an output of the Phase II research for the Foodservice Water Heating Systems Advancement Plan, finalized in October 2024.1 The Advancement Plan described the research needed to support the development of the Foodservice Water Heating Systems Market Transformation Initiative (MTI) Plan. CalMTA’s Foodservice Water Heating MTI will focus on electrification of water heating in full-service and quick-service restaurants and in cafes, with a focus on promoting the adoption of heat pump water heaters (HPWHs) as the primary hot water source. This report examines the California market for water heating systems in the foodservice sector, including the characteristics of restaurant establishments and existing water heating equipment, supply chain dynamics, workforce and stakeholder roles, and the operational, financial, technical, and regulatory factors influencing equipment selection and replacement decisions.