Overview 

Germany is the second largest importer and third largest exporter of consumer oriented agricultural products worldwide, and by far the most important European market for foreign producers.  The retail market’s key characteristics are consolidation, market saturation, strong competition and low prices.  Germany is an attractive and cost-efficient location in the center of the EU.  While many consumers are very price sensitive, the market also provides many wealthy consumers who follow value-for-money concepts.  These consumers are looking for premium quality products and are willing to pay higher prices.  Germany still has the lowest food prices in Europe, and German citizens spend only about 12 % of their income on food and beverages.  Low food prices are a result of high competition between discounters and the grocery retail sale segment.  

Key market drivers and consumption trends 

• Fair trade and organic products have become more important on the German grocery market.  Germany is the second largest organic market in the world (behind the U.S.) and presents good prospects for exporters of organic products (for more information, please see the GAIN report: US Organic Food Exports will more than double in 2019.
• Ageing population and increased health consciousness of consumers are fueling the demand for health and wellness products, as well as functional food products.  
• Increasingly high-paced society and the rising number of single households are driving the demand for convenient ready-to-eat meals, desserts and baking mixes.   
• Ethnic foods, beauty and super foods, clean label foods, “free from” products (e.g. gluten or lactose free) and locally grown products are further trends that attract more and more German consumers.   
• An increasing share of consumers view their purchasing decision as a political or life-style statement (no GMO, only free-range eggs, vegetarian or vegan diet).  
• Consumers increasingly require traceability and information about production methods. 
• Germany remains a price-focused market, but the share of consumers who are willing to pay for quality increases. 
• COVID-19 related lock-down measures fueled home cooking. The Ministry of Agriculture recently published a nutrition report indicating that 30 percent of Germans are cooking more than before the crisis.  It remains to be seen if this trend persists once the pandemic is over.