Industry Overview

Germany's 82 million inhabitants make the food and beverage market the largest in Europe. The sector ranks fouth among the local producing industries and has a workforce of over 550,000 in the almost 6,000 predominantly small and medium sized enterprises.
Germany's main trading partners in the food and beverage industry are other EU countries followed by Russia, the United States and Switzerland. Even though part of the local demand is satisfied with domestically produced goods, the country is a net importer in major groups of food and drink products. In the past ten years, food imports have steadily increased, thus underlying the rising demand for foreign as well as exotic foods.

Our Industry in Numbers

• Second largest food producer in Europe with a total sales of EUR 163 billion in 2011
• Exports of processed foods and agricultural commodities amounted to EUR 58.5 billion in 2011
• Imports of processed foods and agricultural commodities to the value of EUR 69.3 billion in 2011, making Germany a net importer of food & beverage products.
• Largest sector sub-segments in 2011: meat (23.0%), dairy (15.9%), baked goods (9.0%), and confectionery food (7.8%)
• Industry analysts forecast growth of 3.0% in 2012, with growing demand for convenience, health and wellness food products.

Market Potential

Given the large size of the German market, the existing opportunities in the food and beverage sector are very attractive to exporters worldwide. Especially the increasing demand for wellness, convenience food and organic products in the past years, represents a large potential for foreign companies active in these market segments.

German consumers are generally well informed. They expect high quality and low prices for their food and beverage products. The domestic food and beverage sector has profited from the fast economic recovery in Germany and the growing demand for food products made in Germany brought the export quota to an all-time high. Moderate growth was recorded in the meat and sausage products, confectionery, baked goods, and non-alcoholic beverage segments. The German food service market is also expected to grow significantly in 2012.

Market Access

The German food & beverage industry can still be regarded as fragmented and competitive. Food imports from other countries within the European Union fall under the "free movement of goods" principle. This means that products that are imported by other EU-countries may be brought into Germany even if they violate German food laws. If this is the case, importers must obtain a permit from the Federal Office for Consumer Protection and Food Safety (BVL) in order to sell the product in Germany. The duties to be paid for food brought from outside the European Union are subject to European legislation as well. The tariffs for different food products are published in TARIC, the Online Customs Tariff Database.

FOOD SAFETY - The legal framework on food safety was established by the European Union. The European Food Safety Authority plays a key role in the risk assessment of food. Many developments of the previous years were aimed to increase transparency and consumer confidence, by providing better information on food ingredients. Traceability of food products is also of utmost importance. For example, the country of origin must always be listed on food labels and all intermediaries (suppliers, distributors, etc.) that joined the food chain must be included as well. Companies trading food of animal origin from one country of the European Union to another need a special permit that is issued by the Federal Agency for Agriculture and Food (BLE).

NOVEL FOODS - Novel food imports in Germany must undergo a safety assessment before being brought into circulation. Importers of novel foods must apply for a license to sell these products at the Federal Office for Consumer Protection and Food Safety (BVL). As the responsible federal authority, the BVL will perform the necessary testing and send the results to the European Commission and the Member States for final approval. Detailed guidelines for the import of novel foods can be found at the Federal Institute for Risk Assessment (BfR).

PRODUCT PACKAGING - Exporting companies should be aware that product packaging is very important to German consumers since they are highly environmentally conscious. Manufacturers, importers, distributors and retailers must make sure that their packaging materials for their food products comply with the EU's and Germany's domestic regulations in terms of recycling and disposal. There are several dual system companies licensed in Germany offering various waste disposal schemes. Foreign exporters are free to choose which dual system they join. It is not mandatory to display any dual system membership seal on sales packaging.

Distribution Channels

Few German retailers import products directly from other countries. Most food retailers rather buy from central buyers/distributors specialized in the import of food & beverages. In general, these wholesalers have specialized in products or product groups; some are even experts in food products from a specific country of origin. These specialized importers have in-depth knowledge of all importing requirements such as the necessary product certificates, labeling and packaging and also take care of the shipping, customs clearance, warehousing and distribution of the products within the country. It is advisable that foreign exporters find a local representation in order to place and promote their products successfully within Germany.

The German retail food sector is dominated by five large retailers that claim more than 75 percent of the market. In 2011, the overall market share of discounters offering a limited selection of mainly private label goods at low prices remained stable at 41percent. As mentioned above, all these retailers rely on specialized distributors/wholesalers for their products. However, some supermarkets will sometimes contract directly with a foreign supplier and appoint an importing company of their choice to bring the products into Germany accordingly.

Especially for foreign food and beverages companies, another useful way of finding the right distribution for their products is to participate in the various food trade fairs taking place in Germany. Trade shows like ANUGA, the Green Week or BioFach in Germany enjoy an exceptional reputation among industry experts worldwide. Participating in any of these events facilitates the direct contact with German food brokers, importers and wholesalers.

Supporting Institutions

Foreign companies looking for German food importers, wholesalers or distributors can find further information at the Federation of German Food and Drink Industries (BVE), the Federal Association of the German Retail Grocery Trade (BVL) as well as at the different food market segments industry associations.

The BVE represents the interests of 21 branch associations and 50 food and beverage companies in Germany. It is one of the first stops for foreign companies looking for information and contacts in the German food and drink industry. The BVE's main responsibility is to represent the interests of its members at both national and international levels. The BVL serves as the federal organization for the food retail trade in Germany and represents all sales channels and companies in the field. The association's role is to safeguard the sector's interests with regard to legislation, the public authorities and the general public in Germany and Europe.

Information about the different industry-related trade fairs being held in Germany can be found in the database of the Association of the German Trade Fair Industry (AUMA).