(Last updated: 5 Sep 2011)

Trends and opportunities

The market

Germany’s fruit and vegetable market is of particular interest for foreign companies: just one-fifth of consumed fruits and a third of consumed vegetables are locally sourced. More than half of Germany’s fruit and vegetable imports come from Spain and Italy, the rest from France and the Netherlands.

Sales of processed fruits and vegetables (excluding fruit juices) reached €3.7 billion in 2009. Fruit preparations (38 per cent market share) and jellies and jams (36 per cent) dominated the processed fruits market. Frozen vegetables (71 per cent) and canned vegetables (21 per cent) are the most important sub-segments of the vegetable industry.

Around 54 per cent of all fresh fruit and vegetables in Germany are sold through discounters. They are the most important distribution channel for fresh fruit and vegetables in Germany.

(Source: Germany Trade and Invest, The Food and Beverage Industry in Germany, issue 2011/2012, page 6) 

Due to Australia’s small market presence in Germany, there is little existing demand for Australian produce. However, potential does exist for committed exporters who are willing to develop this segment jointly with selected importers and retailers.

In general, there is a growing trend for pre-packed produce, ready for the retail outlet shelves, cooling counters and freezers. Exporters to Germany are supplying more value-added products such as pre-packed produce in small, attractive consumer packages such as baby vegetables, and double packs of 2 x 125 grams of tropical fruit salad.

A growing trend is the year-round availability of fruit with varieties stocked over longer periods.

The German fruit sector is traditionally supplied via specialised importers. Generally, supermarket chains and discounters don’t import directly from a supplier, however, there is an emerging trend for supermarkets to contract directly with an overseas supplier, and with customs clearance, storage and distribution being handled by an appointed importer. 

Opportunities

During the off-season (September-May), opportunities exist for Australian exporters to supply fruit to Germany.

Other opportunities include supply of stone fruits from late November to February and for citrus and apples from April to May. Lower priced related varieties, such as Pink Lady apples could provide an interesting possibility to be developed together with strong German importers/distributors.

The organic market in Germany has been growing for many years. It is the largest in the EU. In 2009 the subsector generated €5.8 billion. In 2010, approximately 2,350 shops operated in Germany selling solely organic produced products.

Fruit juices

With 37 litres per capita consumption of fruit juice and nectars, Germany is one of the biggest fruit juice markets in the world. Within the EU as the biggest fruit juice market in the world, Germany has a market share of 28 per cent. In addition, Germany has almost 400 fruit juice producers – most are small and medium-sized companies.

The 10 biggest fruit juice companies are responsible for 80 per cent of Germany’s total assets of fruit juice.

About 60 per cent of fruit juices in Germany are sold as private label, mostly in discounters. 30 per cent of fruit juices are sold in supermarkets and the rest is sold in beverage markets, very often in reusable bottles. About 2.2 billion litres of the 3.2 billion litres sold in 2009 were juices and the rest were nectars and lower fruit content drinks. Almost all juices are sold as ambient: the chilled juice sector still has to be developed.

The not from concentrate (NFC) market share is about 20 per cent, 80 per cent is from concentrate (FC). The three major products are apple, orange and multi-vitamin juices which have about 70 per cent of the market share. A German speciality is the Apfelsaftschorle. This is carbonated nectar with a fruit content of 60 per cent apple juice and mineral water. The total turnover is about 800 million litres, and per-capita consumption is about 10 litres.

(Source: Foodnews)

Packaging of juices

In 2009, PET with about 45 per cent of the market share was equal to the carton. The returnable glass system of the VdF had seven per cent of the market share and three per cent was other packaging.

(Source: Foodnews)

Five predictions for 2011

1. Fruit juice as a generic product is price-sensitive, therefore due to the current raw material prices, fruit juices will lose market share to less expensive products
2. Apfelsaftschorle will remain at its high level
3. Special products with a regional flair and authentic apple juices will increase
4. NFC will gain a bigger market share, chilled juices could grow
5. PET will increase constantly, the carton will decrease, and the reusable glass system will further decrease on an already low level

(Source: Foodnews)

Vegetables

In 2010, Germans consumed about 7.61 million tonnes of vegetables. This means a per capita consumption of 93.3kg.  The following were the most popular types of vegetables consumed:

• Tomatoes – 24.6 kg
• Carrots and red beet – 8.0 kg
• Onions – 7.6 kg
• Cucumbers – 6.8 kg
• Cabbage, red and white – 5.4 kg
• Beans and peas – 3.0 kg
• Brussels sprouts and broccoli – 2.6 kg
• Lettuce – 2.7 kg
• Savoy cabbage, Chinese cabbage and cabbage turnip – 2.4 kg
• Celery and leek – 2.1 kg
• Asparagus –1.5 kg
• Spinach –1.0 kg
• Mushrooms – 1.8 kg
• Other vegetables – 23.7 kg

(Source: German Ministry for Food, Agriculture and Consumer Protection)

According to market research done by GfK, every household in Germany bought about 3.3kg of organic vegetables, an increase of eight per cent compared to 2009. Hence the percentage of organic vegetables sold in Germany grew to 5.5 per cent in 2010. The biggest group of organic vegetables are carrots, which currently account for 22 per cent of all carrots sold in Germany.

Competitive environment

Germany has a lower price structure than the UK or France, however, high quality is expected and this provides a strong challenge to potential Australian suppliers who have to meet the stringent volume and consistency requirements of German importers.

Competition in Germany is intense not only from within Europe but also from Africa and South America. The main competition for off-season produce comes from South Africa, Chile, Brazil and New Zealand.

The main vegetable suppliers to Germany are the Netherlands, Spain, Italy, France and Belgium.

Tariffs, regulations and customs

Germany is part of the harmonised trade system of the European Union (EU).  A Common Customs Tariff is applicable to goods from non-EU countries, including Australia. Most duties are ad valorem (per cent), based on the GATT Valuation Code (approximate CIF value). Produce from other EU member states enters Germany duty-free while Australian produce carries full duty and high transportation charges.

Before shipping any goods to Europe, you should obtain a written customs duty ruling, known as Binding Tariff Information (BTI) from the customs service in the destination country. Getting the BTI is free and will ensure there is no conflict over customs or excise duty.

Once your goods have landed in Germany, a variety of costs can be added to the product price. This is mostly covered by the importer/distributor and needs to be carefully considered in export price calculations. Costs include:

• For import duties - 0.5 per cent to 6 per cent 
• For fruit importers, depending on the degree of involvement, logistics and cost coverage provided: 5 per cent to 20 per cent commission.  New import/distribution models, however, could mean lower commissions through more direct trading 
• Up to 10 per cent mark-up imposed by discounters 
• Up to 30 per cent mark-up imposed by supermarkets 
• Promotional material required for supermarkets and retail chains when new lines or products are introduced 
• Seven per cent Value Added Tax (VAT) on basic foodstuffs (19 per cent VAT on luxury goods)

Customs procedures in Germany are governed by the laws of the EU and of the Federal Republic of Germany. Except for minor procedural regulations, customs laws in the EU is completely harmonised in the form of a customs code that is legally binding on all EU member states. Goods traded within the EU are not subject to any customs duties.

All imports of plants or parts of plants are subject to EU phytosanitary regulations and a phytosanitary certificate is required to accompany all shipments into Europe/Germany. The Australian Quarantine and Inspection Service (AQIS) manages the inspection and phytosanitary certification program for Australian suppliers. All shipments need to be accompanied by an inspection certificate. Exporters should check first with AQIS Phyto and then their German agent/importer, prior to shipping.

Tax and duty

When exporting to Germany, various aspects have to be considered: 

• customs and taxes
• quality and environmental standards
• trademark and competition rules are just a few of them

In general, the importer is responsible for clearing the items to put the goods in circulation in Germany. Exporters need to be informed on prerequisites of penetrating the German market, if only for pricing purposes. In reference to customs duties for goods which are exported to Germany, the goods' country of origin is of utmost importance.

Within the Single European Market, a community-wide system of VAT collection is in place. National VAT is levied on the product at the place of production. Buyers can deduct it as input tax in their home country, provided that the supplier has got a valid value added tax identification number.

Customs duty and tax are collected by the German customs authorities.

Industry standards

German fruit and vegetable industry standards are governed by European Union (EU) regulations for imports. Further information should be obtained from the local AQIS office.

Since the implementation of the EU single market policy, imports from listed third countries (non-EU countries such as Australia) are permissible only at the external borders of the EU and thus only at certain points of entry (including seaports Bremerhaven, Hamburg and Frankfurt airport).

The EU directive relating to genetically modified (GM)-free foods has been in force since October 1998. The ‘non-GM’ label certifies that all the ingredients contained in the product are GMO-free. German retailers have begun to remove GM-affected foods from their shelves.

Due to a few contamination scandals most of the retailers request comprehensive testing documentation from the suppliers. The certification by International Foods Standards (IFS) is a prerequisite in order to do business with some distributors.

Specifications for labelling, packaging, quality and other factors vary greatly depending on the type, kind, state of product, the final usage and the individual requirements of the importer or customer. Produce within the EU is packed and handled preferably on standardised EURO-pallets. A typical lorry supplying retail chains carries 24-26 pallets.

Exact specifications should be obtained directly from the importer. German importers will not tolerate diversions from exact specifications and demand absolute compliance with EU/German standards.

Marketing your products and services

Market entry

In order to successfully enter the German fruit and vegetable industry, Australian firms should consider the following:

• Obtaining necessary EU export certification through AQIS.
• Identifying suitable market sectors and importers for your products.
• Visiting the market and meet with interested importers.
• Cultivating strong relationships with German importers and maintain regular contact. This will assist in defining upcoming windows of opportunity, new market developments, changes in legislation, and labelling.
• Keeping them well informed about developments/changes, promotional strategies. A highly controlled supply chain management from growing to shelving, coupled with a dependable German importer, is crucial to success.

In order to market your products in the German fruit and vegetable industry, you should consider the following:

• Visiting the market regularly and following up on visits.
• Preparing comprehensive promotional packs (possibly bi-lingual, English/German) profiling your company, your products and seasonal availability.
• A joint approach with a retailer (after a relationship with the importer has been formed). This may be considered as a promotional and educational step to develop the market further.
• Actively promoting your product in the market.  Participation in food-related trade exhibitions such as Fruit Logistica in Berlin and ANUGA in Cologne is recommended. There is also an industry-driven campaign, called ‘5 am Tag’ (5 a Day), promoting the consumption of five servings per day of fruit and vegetables to German consumers.
• Forming a strong export promotion body (eg. the NZ-ZESPRI model), which is well perceived and supported by German media and industry.
• Developing value-added products in conjunction with your German importer/retailer.
• Emphasising Australia’s clean, green environment for the specific purpose of niche-marketing organic produce.

It is essential that Australian exporters work closely with importers to ensure that their products are ready for the German market and comply with local regulations for particular products, packaging and labelling. As packaging varies greatly with different products, exact specifications need to be obtained from the respective importers.

Consideration should be given to export via specialised consolidators who have already entered the German fruit and vegetable industry.

German consumers are generally well informed, expect high quality (at low prices) and seek new products. German supermarkets and chain outlets tend to promote fruit when supply is high and prices are low due to market saturation; therefore the supermarkets tend to determine consumption levels. Consumers only tend to buy fruit if it's amply stacked on fruit shelves - small quantities don’t attract attention in the fresh section of the markets. 

Although there are trading platforms for fruit and vegetables such as online food markets, a large majority of trading is still conducted via direct communications between companies. Food retailing via the Internet is still very minimal in Germany and personal contacts and interactions are still crucial factors in this industry. 

Trade fairs

Fruit Logistica is held annually in Berlin. It is the leading international meeting place of the fresh produce trade.

Distribution channels

Specialised fruit and vegetable trading-houses traditionally import most of the fresh produce into Germany. German importers work hand in hand with retailers and other outlets for fresh produce.

Supermarket chains and discounters generally do not import direct. Sometimes, however, supermarkets will contract direct with an overseas supplier, with customs clearance, storage and distribution being handled by an appointed importer.

Moreover, prices for the product lines which discounters tend to sell, tend to be low for all food retailers because non-discounters are forced to match discounter prices.

Transport

Imported fresh produce enters Germany via sea through Bremerhaven, Hamburg and the Netherlands or via air through Frankfurt or Cologne airport (high priced produce).

Specialised importers are equipped to handle incoming fresh produce in a very efficient and qualified manner, with integrated temperature controlled storage, logistics and transportation (ie. air, water, rail or truck) to the final German destination. 

Links and industry contacts

Fruit and vegetable–related resources

Anuga – www.anuga.de
Fruit Logistica – www.fruitlogistica.de
German Fruit Trade Association (Deutscher Fruchthandelsverband) – www.dfhv.de
German Ministry for Agriculture – www.ble.de
Organic Europe – www.organic-europe.net/default.asp

Government, business and trade resources for Germany

European Union Customs – http://europa.eu.int/comm/taxation_customs/customs/index_en.htm
German Australian Chamber of Commerce and Industry – www.germany.org.au 
German Customs – www.zoll.de
German Government – www.bundesregierung.de/en

Logistics

Frankfurt Airport – www.fraport.de
Frankfurt Perishable Center – www.fpc-frankfurt.de
Port of Hamburg – www.hafen-hamburg.de

Media

Fruit Trade Magazine (Fruchthandel Magazin) – www.fruchthandel.de
Central Market & Price Report Office (Zentrale Markt- und Preisberichtstelle) – www.zmp.de
In German only/subscription service

Contact details

The Australian Trade Commission – Austrade – is the Australian Government’s trade and investment development agency.

Through Austrade’s network of offices in over 50 countries, we assist Australian companies to succeed in international business, attract productive foreign direct investment into Australia and promote Australia's education sector internationally.

For more information on how Austrade can assist you, contact us on:

Australia ph: 13 28 78 | Email: info@austrade.gov.au

A list of Austrade offices (in alphabetical order of country) is also available.