Danish Royal Visit to Germany 2015

Hamburg & Munich

19 - 21 May 2015

Tasty Living

Food, Beverage, Gastronomy, Dining, and Tourism

The food market in Germany has seen significant growth in recent years. German consumers are focusing on healthy life-style, bio/organic products, high quality and food safety. Danish cuisine, food and beverage have a strong brand in Germany – among tourists who have visited Denmark and among consumers who appreciate high quality products.

Germany is the biggest market for Danish food exports. It is, however, a competitive market offering both challenges and opportunities. The German consumers have big demands regarding quality and price. They can choose among 170.000 products, so the competition is strong in the German market.

First of all, the German food industry is among the strongest sectors in Germany. The food industry is the fourth biggest industry in Germany and in 2013 employed approx. 555.000 people in almost 6000 companies. These are mainly small and middle sized companies where quality and food safety are important issues.

The most important industries, for the domestic market as well as the export markets, are the meat industry and the dairy and bakery industries. Due to reliable delivery, high quality and very competitive prices the “Made in Germany” stamp is appreciated worldwide. The industry exports approximately 30% of the total production.

The German consumer and the trends

Even though Germans are known as very price-conscious consumers, they have in recent years become more quality-conscious and they value quality, health, sustainability, naturalness and origin. The German society is changing in many aspects. Demographical changes are visible: the population is getting older, more women are working, the number of single households is increasing. Individualism and healthy living is gaining ground. This is changing consumer behaviour, posing new demands but also opportunities for producers in the food sector.

Germany is the biggest market in Europe for organic products. The average German consumer spends approximately 86 EUR per year on organic products. The total turnover of organic products is currently at 4% of the total turnover in the food industry. But it is growing, and the number of organic supermarkets is growing fast, especially in the bigger cities. Most distributors have their own private label for organic products. Often it is combined with a regional aspect, which is considered very positive among German consumers.

Another trend is the segment of Gourmet. The German consumers have become wealthier, and the demand and interest for unique products is growing. This is clearly seen in the increasing number of small and medium sized Gourmet. Also in the traditional distribution you can see that these products are getting more and more available.

Geographic differences

With 16 “Bundesländer” Germany is a big country, and there are also big differences regarding taste, buying behaviour, and living standards. Especially the difference between the north and the south is visible. Many Danish producers have realized that it can be much harder to enter the market of Southern Germany if products are not adapted to the local situation and taste. On the other hand, when you succeed there are very big opportunities waiting.

Distribution channels

The German retail business (Lebensmitteleinzelhandel = LEH) is the most important distribution channel for the whole industry. Also important is Food Service (Ausser-Haus-Markt) as a distribution channel. The distribution channels are highly concentrated and characterized by very big companies. The dominant players are Edeka, Rewe, Lidl, Aldi and Metro.

Opportunities for Danish producers

German distributors are in general very positive towards Danish producers. Danish producers have a reputation of delivering high quality products combined with high food safety and they are seen as innovative.

Many Danish producers are competitive regarding their products. But as mentioned earlier the German market is very price sensitive. Furthermore, it is important that Danish companies understand the differentiated German culture, know how to do business in Germany and speak the German language. It is mostly expected that German is spoken at business meetings.

Patience is normally required as well as sound finances and presence on the market. Adaptation of packaging and marketing are often necessary. In addition, marketing contributions and listing fees to distributors are common.