Germany is the largest retail market for food and beverages in Europe, driven by its large population of 83 million consumers, the biggest in Europe, and the 19^th greatest population worldwide (Source: World Economic Outlook, International Monetary Fund). Not only Germany’s agri-food market is supported by the country’s large Gross Domestic Product of $3.4 trillion in 2019 (Source: World Economic Outlook, International Monetary Fund), the fourth major economy globally, but also to a significant number of tourists. In fact, the number of international overnight stays in Germany reached 89.9 million in 2019, and the country ranked first as a cultural travel destination for Europeans as well as an international trade fair target across the world.

In addition to the high number of visitors, Germany has an increasing diversified culture with 20.8 million people in Germany having a migratory background. The country is mostly attractive for talents and businesses from around the world. This is mainly due to the competitive business environment and job opportunities in various fields. Germany ranked in the seventh place among 141 countries on the global competitiveness index in 2019, and presented the 16^th highest GDP per capita in 2020 (Source: International Monetary Fund). The expanding multicultural population, along with a rise in tourists, and a high per capita GDP continue to drive demand for high-value processed food. Germany is the world’s second largest importer of consumer-oriented agricultural products, making it a net importer of the main categories of food and placing the country as the most important European market for foreign producers (Source: The Food & Beverage Industry in Germany, Germany Trade    & Invest).

The food and beverage industry is the fourth largest sector in the country, contributing in €180bn in added value in 2017, with about more than 6,000 companies in the sector, mostly small- and medium-sized companies. Food retailing revenue reached €243bn in 2017, with the growing population with a higher average income (Source: The Food & Beverage Industry in Germany, GTAI Germany Trade & Invest). The sales of the German food service market reached €78.4bn in 2017, reflecting the second most important distribution channel in the country.

In terms of production, the largest industry segment are meat and sausage products with a share of 24%, followed by dairy products with 15%, baked goods with 10% and confectionery with 8% (Source: The Food & Beverage Industry in Germany, GTAI Germany Trade & Invest).

Despite being saturated and highly competitive, the German food retail market presents significant sales potential for Lebanese agri-food producers. As of the end of 2020, Arab foreigners in Germany reached about 1.2 million people, with a growing number of Lebanese expatriates at around 41,000 individuals (Source: Bevölkerung und Erwerbstätigkeit, Statistisches Bundesamt), thus representing an important market for Lebanese agri-food products.

Products with high growth potential

Meat and Meatless products: The meat and sausage segment is the main food industry in the country. Organically-produced meat and sausage has been increasing, while some meat processors are introducing meat-free products, as well as vegetarian and vegan cold cuts and sausages. German businesses produced almost 39% more substitute products for meat in 2020 than in 2019 (Source: German Federal Statistical Office). Noting that the production of meat products in accordance with Halal requirements continues to gain traction (Source: The Food & Beverage Industry in Germany, GTAI Germany Trade & Invest).

Dairy products: There are growth opportunities in the health and wellness division of the dairy sector. Merchandises with export potential include dessert formulas, as well as dairy products with natural ingredients such as reduced-fat yogurt and calcium. Natural yogurt has in particular witnessed strong growth especially for the Greek-style yogurt which is becoming more important among Germans. Lactose-free dairy products also have a strong consumer base.

Confectionary and snacks: Exports of confectionary products to Germany have been increasing in recent years, with growth mostly witnessed in the savory snacks and fine pastries.  Sugar-free, low-sugar and fat-free alternatives remain strongly demanded by consumers in Germany.

Beverages: Germany continues to be the largest market in Europe in terms of soft drink and alcoholic beverages, with coffee being the most popular drink. Carbonated fresh juice, energy drinks and beverages, known for vitamin or mineral enriched, kept on outperforming the average growth of the beverages industry. Despite a decrease in the consumption of beer, its value remains significant with a per capita consumption of 101 liters in 2017. The healthy trends are creating positive prospects for producers in niche segments, including organic beverages, functional drinks and smoothies, while growth categories in alcoholic beverages include craft beer variations,  as well as organic beer, wine and spirits (Source: The Food & Beverage Industry in Germany, GTAI Germany Trade & Invest). Fair trade products such as coffee and fruit juices also are a growing trend with their sales tripling between 2012 and 2018.

Bakery products: bakery products with high growth potential include healthy baked snacks, international delicacies, premium pastries and wholegrain products. Additional opportunities lie in gluten-free baked products as well as in Mediterranean products, in addition to convenience and ready-to-eat baked goods such as bagels, wraps and sandwiches.

Frozen and convenience food: Germany offers to producers the biggest frozen food market in the continent. Frozen bakery products represent 23% of all frozen food followed by frozen vegetables (14%) and ready-to-eat meals (12%). High growth potential is in the frozen fruits segment, bakery and snacks section.

The increased consumption of packaged and frozen food as well as the rise in demand for healthier food, both provide an opportunity for Lebanese foods to enter the mainstream market in Germany. A large portion of the Lebanese Mezze and “mouneh” products are primarily vegetarian and vegan-friendly. As a result they can be promoted as ready-to-eat meals and healthy convenience food.

Consumer Profiles

Understanding the consumer’s profiles and preferences is crucial for exporters who consider entering the German food and beverages market given the country’s wide cultural diversity and consumption patterns.

Based on a study from 2017, there are six foodie segments in Germany:

• 12% of the nationally representative sample are categorized as “foodies”, who pay close attention to each food dimension, are passionate about their cooking much stronger than any other segments, and are willing to devote a considerable amount of time to healthy and creative meal preparation.
• “Light foodies” are a group that represents about 21% of the German population, and has similar trends as the “foodies” but with less emphasis on eating in company, novelty preferences, and attending culinary events.
• The “Average Nutrition Enthusiasts” (21.7%) are consumers who placed importance of pleasure and interest, cooking method and quality aspects, along with significant emphasis on foodie events and festivals like food shows, food fairs, wine festival and tasting, and food trade shows.
• “Traditionalists” represent 17.1%, rarely dine out with friends. They are less likely to seek new food experiences or to try unfamiliar foods. However, they appreciate food quality, freshness, prices, healthiness, and food labels. They place importance for products offered at discount super markets.
• The “uninterested” the group, which represents a share of 9.5%, and pays little attention to each foodie dimension, is far less interested in attending culinary offerings, dinning out with friends and  family members, or even in  cooking, and is  comfortable purchasing take-away or ready-to-eat foods.
• The remaining are classified under “uninvolved”. (Source: Segmenting Foodies in Germany: Actionable Insights for Agro-food Marketers, Anoma Gunarathne, Sarah Hemmerling, Naemi Krestel, Anke Zühlsdorf, Achim Spiller 2017)

Based on their products and additional market research, Lebanese suppliers should take into consideration  which consumer segments to target efficiently when entering the German market.

What does Germany import? And from where?

According to the ITC Trade Map, in 2020 Germany imported around $52.9bn worth of processed food and agro-based products, the third leading importer of such products after the U.S. and China. The majority of imported goods (around 85%) originated from other EU countries.

Top imported products include:

• Dairy food, birds’ eggs, and natural honey: forming 18% of total imported agri-food products, and largely composed of dairy products, especially cheese. These are mainly imported from Netherlands (30%), France (13%), Austria (9%), Italy and Denmark (8% each)
• Beverages, spirits and vinegar: establishing 16% of total imported agri-food products, and largely composed of wine, water, spirits and vinegar. These are mainly imported from Italy (21%), France (18%), Austria (11%), Netherlands (8%) and Spain (7%)
• Preparations of vegetables, fruits, nuts or other parts of plants: constituting 11% of total imported agri-food products, and largely composed of fruits and nuts, prepared or preserved, fruit juices, other vegetables prepared or preserved, tomatoes prepared or preserved and jams. These are mainly imported from Netherlands (20%), Italy (13%), Turkey (10%), Poland (7%) and Brazil and Austria (6% each)
• Cocoa and cocoa preparations: having a share of 10% of total imported agri-food products. These are mainly imported from Netherlands (24%), Belgium (14%), Cote d’Ivoire (12%), Poland and Switzerland (8% each)

Germany – Lebanon Trade

Germany ranked in the 13^th top destinations of Lebanese agri-food exports in 2020 (Source: ITC Trade Map). Lebanese exports to Germany grew at a CAGR of 9% between 2010 and 2020.

Based on ITC Trade Map data, top exported Lebanese agri-food products include:

• Preparations of vegetables, fruits, nuts (51%)
• Miscellaneous edible preparations (13%)
• Beverages, spirits and vinegar (12%)
• Animal or vegetable fats and oils (10%)

Based on ITC Export Potential Map, Lebanon has the potential to increase its agri-food exports to Germany in:

• the nuts and seeds segment
• pickled products
• Chocolate and other cocoa preparations