1 May 2006 - The German food service sector is very fragmented and highly competitive. Total turnover of the German food service market amounted to 41.5 billion Euro or 51.4 billion U.S. dollars in 2005, slightly more than in 2004. The gradual upswing in the German economy will also influence the food service sector and lead to increasing food & beverage consumption away from home. Based on the continuing trend for foreign-style foods, the German HRI sector offers good potential for U.S. suppliers.
Currency Conversion Rates
The value of the dollar has been decreasing against the Euro since 2002.This report includes the dollar equivalents for the reader’s convenience but all trends and analysis in this report refer to changes on a Euro basis.
Average Annual Currency Conversion Rates:
20011 U.S. $ =1.1166 Euro
20021 U.S. $ =1.0575 Euro
20031 U.S. $ =0.8840 Euro
20041 U.S. $ =0.8051 Euro
20051 U.S. $ =0.8078 Euro
I.MARKET OVERVIEW
Germany, with its 82.5 million people (or 18 percent of the EU 25 population), has the world’s third largest economy after the U.S. and Japan, and is the leading market for food and beverages in the European Union.Germany’s consumers spent Euro 195 billion (approximately US$ 241 billion) in 2005 on food and beverages, or 15 percent of total national expenditures.Of this amount, about 19 percent was spent in restaurants, canteens, and other places where food and beverages were served on-premise.The remaining amount was spent in retail food and beverage outlets.
Germany’s stagnant economy, however, has slowed retail sales, including sales of food products.In 2004, total sales (turnover) by retailers of food and beverage in Germany were approximately Euro 127 billion (or US$ 158 billion) compared to nearly Euro 124 billion (US$ 140 billion) in 2003.The Euro 127 billion generated in 2004 were primarily from the sale of food products.These items are usually sold by organized food retailers such as supermarkets, hypermarkets, discount stores, and small traditional retail stores.Bakeries, butcher shops, farmer’s markets, drugstores, gas stations, and kiosks also play a key role in Germany’s retail as well as food service sectors.
An additional Euro 65 billion in food and beverage sales were generated by restaurants, canteens, and snack shops (imbiss) where food and beverages are served on-premise.
In 2005 Germany imported US$ 721 million worth of consumer-oriented agricultural products from the U.S., substantially more than the US$ 648 million a year earlier.The increase in imports was mainly in fish and fish products, meat and meat products, tree nuts, fresh fruits, and pulses.Approximately one-third of all U.S. agricultural exports to Germany are in this category.
The major competitors in the consumer-oriented products market are from EU countries, particularly the Netherlands, France, Italy, and Spain.The U.S. is the second largest non-EU supplier of consumer-oriented products to Germany, after Turkey.
Key Demographic Trends
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The average German consumer can be characterized as relatively affluent and older.Increases in the number of working women and the number of single-person households, as well as the large immigrant population, are other notable demographic characteristics.
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Germany has one of the lowest birth rates in the world of only 1.4 babies per woman of childbearing age and that has led to an older age structure of the German populace.This trend is not expected to reverse in the foreseeable future.Currently, of Germany’s 82.5 million inhabitants, 35.4 million, or more than 40 percent, are 45 years of age or older.Given current demographics, by the year 2030, every other German will be 50 years of age or older.
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Along with an aging population, a rising number of single-person households and of women in the workforce has also had a substantial impact on food consumption.Currently there are about 14.4 million single-person households in Germany, about 40 percent of which are accounted for by persons under 45 years of age.
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The growing number of working women has increasingly contributed to Germany’s high average net household income.The percentage of working women in the 15-65 age group is 58.9 percent.
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The high share of single-person households and the rising number of working women has led to strong growth in the consumption of more convenient types of foods and beverages, such as frozen foods, snacks, prepared and other convenience foods.People spend less time preparing meals, which has increased the frequency of dining out and eating on the run.
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More than a decade after reunification, the income gap between the 67 million people living in the western German states and the 15 million in the former East Germany still exists.Average incomes in the eastern states are still markedly lower than in the west and the unemployment rate in the east is more than twice as high than in the west.
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A large immigrant population and the penchant by Germans to travel abroad have also influenced domestic food consumption behavior.
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About 7.3 million foreigners without German passports live in Germany, the majority of whom have been in Germany more than 10 years.These foreign populations, with their special products and cuisines, have exerted considerable influence on the consumption patterns of the entire nation.
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As “world class” travelers, many Germans have been exposed to a large variety of different cultures, which has also been translated into consumer preferences for certain foods.