7 February, 2008 – In 2006, Germany's processed food and drinks industry was worth US$174 billion, an increase of 3.4 pct on the previous year. The fastest growing sectors were premium products, health/wellness and convenience, which leapt by 38%.
Market Summary
Germany’s food processing industry is one of the most important sectors in the country’s economy and the second largest in the EU.
Key factors in its success include it serves a highly affluent domestic market of over 82 million consumers, which is the largest in Europe. Its central geographical means German exporters benefit from an excellent transportation and logistics network to move their goods easily and cheaply to a host of neighbouring countries. Last year, Germany’s processed food exports exceeded EUR 40 billion, with its most main markets in the Benelux, Austria France, Spain and Italy.
Its food processing industry has demonstrated a compound annual growth of two pct since 2001, driven mainly rising domestic demand and increased exports.
Key divisions include meat products, dairy products, alcoholic beverages, confectionery, bakery products, fruits & vegetables and oils & fats.
EU expansion has also helped the sector with around 80 pct of the country’s agriculture exports going to EU countries. Eastern Europe markets are seen as a particular growth area thanks to rising disposable incomes and inferior food-processing sectors in these countries.
Germany’s seafood and fish sector is also growing and was valued at US$2.3 billion in 2006. Breaded and frozen fish fillets, fish sticks, fish salads, herring and salmon are its biggest sub segments. Others enjoying the largest growth include caviar replacement (101 %), crustaceans (25 %), frozen ocean fish (21 %) and foods containing crustacean products (19 %).
Market Structure
German food processors mainly buy their ingredients from local producers and/or local importers. Only large processors import ingredients directly from foreign suppliers.
Retailers usually purchase direct from the processor or from a buying organization. The HRI sector may purchase directly from the processor or from a wholesaler. Smaller HRI outlets generally purchase products from cash and carry operations.
Company Profiles
Trends
Household size is shrinking with 66 pct now consisting of 1-2 occupants. Demand for smaller packaging has therefore increased.
The country’s high levels of disposable incomes means consumers can purchase premium products, which currently have a 12.5 pct market share.
Demographic and lifestyle changes are affecting consumer trends. An increasingly older population has boosted demand for nutraceuticals, as well as health and functional foods. The organic sector, which was worth EUR 4.8 billion in 2006, is also growing in significance.
The rise in the number of women in the workforce has led to an increased demand in convenience and prepared foods
Research shows that while the whole German food and beverage sector grew by 6 pct between 2002-2005, sales among the three trend sectors of premium products, health/wellness and convenience grew by 38%.
Imports
Netherlands, Italy, France, Austria and Belgium are among the largest food exporters to Germany. A more detailed breakdown is listed below:
