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A Guide to Exporting Food and Beverage Products to Germany
With its strong economy, affluent population and increasing awareness of U.S. products, Germany is an attractive market for U.S. food and beverage exporters. Opportunities and rewards await U.S. suppliers with suitable products who are willing to devote the time and resources required to access and compete in the German market.
With 81 million people, Germany is the largest market in Western Europe. Average income and food expenditures are among the highest in the world. Germany is one of the world's leading food importers, with total annual agricultural imports of about $40 billion. In 1995, the United States exported more than $400 million worth of consumer-oriented products, including food and beverages, to Germany, and steady growth is expected to continue.
But the competition for the German market is intense. Domestically produced products and those from other European Union (EU) countries dominate the retail market, principally due to duty-free movement of intra-EU trade, geographical advantages, existing business ties and the requirement that food and beverage products comply with German/EU food laws and specific requirements regarding packaging and labeling.
Retailing Challenges
Few German retailers import products directly from the United States, or from other non-EU suppliers.
Due to their wide product range and high volume requirements, central buyers for the major retailers generally are flooded with offers from competing suppliers. These buyers want to avoid the added time and resources required to import products directly, especially new-to-market products that may not comply with German/EU requirements.
Retail buyers may be interested in importing products directly only if they possess specific attributes and offer significant advantages in terms of quality, price or promotional support.
Direct product sourcing by German retailers from other EU-member states has increased as more countries enter the EU (thus eliminating tariffs and quotas on trade with Germany) and national food laws have become more harmonized. Thus, U.S. exporters with food and beverage products that meet EU requirements and are already being exported to other EU markets should find it easier to gain access to the German market and possibly direct access to a major German retailer.
However, most U.S. exporters interested in selling consumer-ready food or beverage products to Germany should find a local importer to access the retail market.
The importation and distribution of food and beverage products in Germany, particularly for products from non-EU countries, are typically handled by specialized importers. These importers traditionally specialize in products or product groups (including those from particular countries) and frequently market nationwide, either through their own sales force or through a distribution network of independent sales agents. Given their product specialization, importers can be expected to have in-depth knowledge of specific importing procedures, sourcing requirements of individual retailers, and peculiar market characteristics.
A German importer can normally provide a number of services to U.S. exporters, including: arranging shipping and customs clearance, and assuring that imported products meet German/EU food law, labeling and packaging requirements.
They may also distribute and promote the product as well as assure it is allocated in-store shelf space. Many importers also package bulk shipments of agricultural products for retail sale. This is a common practice for imports of dried fruits, nuts and other "generic" products.
Have Patience and Do Research
Germany is a sophisticated market that values and rewards quality. U.S. suppliers of food and beverage products interested in developing a market in Germany should:
be committed to exporting;
ensure that the product and its packaging appeal to German consumers;
have a product that meets German/EU food law, packaging and labeling requirements, or be willing to adapt the product to meet them;
provide sufficient time to locate a suitable buyer/importer;
consider starting with small shipments, such as pallets instead of container loads; and
provide the German buyer/importer with product promotion support, especially for new-to-market or unfamiliar products.
Getting Started
There are a number of ways that U.S. exporters can find a local importer. To begin the search:
Contact your state department of agriculture and/or one of the four regional trade groups of state departments of agriculture. These groups work closely with interested U.S. firms in establishing contacts and assisting in exporting.
Exhibit products in one of the many trade shows held in Germany. Trade shows are used successfully by many U.S. exporters to determine if a product is suitable for the market and to locate a prospective German buyer/importer.
Contact the Foreign Agricultural Service (FAS). FAS assists U.S. exporters interested in marketing food and beverage products in Germany. The following FAS offices can provide information and assistance:
U.S. Agricultural Trade Office (ATO): This office, in Hamburg, Germany, coordinates FAS marketing activities in Germany and facilitates trade contacts between U.S. agricultural suppliers and German importers.
The ATO can supply U.S. exporters with basic market information, including lists of German agricultural importers, categorized by commodity sector. The ATO can also supply information about trade shows in Germany.
U.S. Agricultural Trade Office
Alsterufer 28, D-20354
Hamburg, Germany
Phone: 011 49-40-4146-07-0
Fax: 011 49-40-4146-07-20
Office of Agricultural Affairs: This office, located in the U.S. Embassy in Bonn, Germany, oversees all U.S. Department of Agriculture activities in Germany and has primary responsibility for issues involving German food laws.
Office of Agricultural Affairs
American Embassy,
Bonn, Germany
PSC 117, Box 385
APO AE 09080
Phone: 011 49-228-339-2133
Fax: 011 49-228-334-697
AgExport Services: The AgExport Services Division offers detailed information on export services provided by FAS.
AgExport Services Division, FAS
Stop 1052
1400 Independence Ave., SW
U.S. Department of Agriculture
Washington, DC 20250-1052
Phone: (202) 720-7103
Fax: (202) 690-4374
Germany's Retail Food and Beverage Sector
Germany's annual retail food sales total about $150 billion. The retail food trade is dominated by a relatively few, large companies. In 1995, the top five German food retailers accounted for two-thirds of total German retail food sales, and the top 10 for more than 80 percent.
Germany has about 76,400 retail food outlets. About one-third are classified as large (with food and non-food sales floors of 4,300 square feet or greater) and the rest as small (with sales floors less than 4,300 square feet). The large retail outlets are further classified, depending on their sales format, as hypermarkets, discount markets or supermarkets.
Hypermarkets and discount markets dominate German retail food sales, with 41 percent and 27 percent of all food sales, respectively, and also account for an increasing share of the total. Supermarkets account for 12 percent and small local shops for the remaining 20 percent of Germany's total retail food sales.
Small, convenience-type outlets also are a fast-growing segment of the retail food and beverage sector in Germany. Retail shops located in gas and train stations, kiosks and bakeries have led this trend. Sales (food and non-food) by convenience outlets total about $21 billion per year and will likely double in the next 10 years.
A recent change in the German law that sets retail store hours has prompted much debate. Beginning November 1, 1996, stores have the option to stay open longer--until 8 p.m. weekdays and until 4 p.m. Saturdays; stores are closed Sundays. Prior to the change, most stores had to close by 6:30 p.m. weekdays and 2 p.m. Saturdays. Most experts expect the longer stores hours to boost retail sales.
This article is based on a report prepared by FAS staff in Germany.
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