Sector Trend Analysis – Health and wellness trends in Germany

July 2019

Executive summary

With 82.8 million inhabitants, Germany is the largest consumer market in the European Union (EU), in size as well as in spending power. The German economy is the largest in the EU representing approximately 20% of the EU's gross domestic product (GDP).

German consumers recognize the importance of maintaining their physical and mental health and this has driven sales of wellness linked foods such as natural products, organics and nutraceuticals.

The health and wellness trend in Germany presents many opportunities for Canadian manufacturers and suppliers. There is growing demand for healthier options in the market as the population ages and as younger consumers are encouraged to better care for themselves.

Sales of health and wellness products have shown substantial growth in Germany. This sector is expected to remain popular as German consumers continue to opt for more natural options, as health becomes a status symbol for the newly old, and the number of young people who are interested in preventing illness has shown growth in recent years.

Trade

Germany is the world's third largest agri-food and seafood importer, with imports totaling US$97.2 billion in 2017, an increase of 6.7% since 2015. The EU is Germany's largest import source at 69.5%, followed by Asia (9.2%), South America (6.9%), and North America (3.7%). Brazil was Germany's largest non-EU import source at US$3.2 billion. Imports from Canada amounted to US$293.4 million, ranking 42nd among non-EU suppliers.

In 2017, Germany imported US$60 billion in consumer-oriented agricultural products from US$56 billion in 2015, a 7.7% growth over this period. 21% of imported products came from the Netherlands, followed by Italy (10%), Spain (8%) and France (7%). Canada supplied a mere 0.1% or US$62 million of consumer-oriented products in 2017.

Key demographic indicators

Germany has a population of 82.8 million people and a GDP of US$3.7 trillion, making Germany the largest country and economy in the EU. Germany is the fourth largest economy in the world and accounts for over a fifth (21.3%) of EU GDP.

Germany's population is largely urban with 73.7% of the population living in urban areas. Germany's rural population is in decline after reaching a peak of 21.9 million in 2005. Between 2017 and 2030, it will decline by 23%. In contrast, the urban population will continue to expand to reach 61.7 million by 2030.

German population of main metropolitan areas
City Population
Berlin 3,613,495
Hamburg 1,830,584
Munich 1,456,039
Cologne 1,080,394
Frankfurt 746,878
Stuttgart 632,743
Düsseldorf 617,280
Dortmund 586,600
Essen 583,393
Leipzig 581,980
Source: Statistisches Bundesamt Deutschland (2017 estimate)

The German population is one of the oldest in the world with a median age of 46 in 2017, increasing to 48.1 by 2030. Germany is also aging at a faster rate than the EU average, where the median age was 40.0 years in 2017 and is expected to climb to 43.7 by 2030.

The number of citizens in the 15-64 range is expected to fall as a share of total population from 65.7% in 2017 to 60.4% in 2030. Between 2017 and 2030, the population aged 65+ is expected to grow by 3.9 million or 21.6% of total population to reach 21.5 million.

Household composition in Germany
Total number of households (in million) 40.1
Average Size of the households 2.2 Persons
Households of 1 person 39.2%
Households of 2 persons 29.0%
Households of 3 or 4 persons 23.6%
Households of 5 persons and more 3.7%
Source: OECD, 2014

Consumers

Consumers in Germany are health conscious, sensitive to environmental issues, and willing to pay higher prices for more natural, less processed, and environmentally friendly products, such as organic foods, over conventional agri-food products.

German consumers also have an appetite for locally produced food and beverages. "Buy local" in Germany refers to regional products that are attached to a smaller territory. According to Mintel, 75% of German consumers prefer "regional products" if they have the choice. Most already buy such products on a regular basis, and 70% claim that they are even prepared to pay a premium for them.

Pricing plays an important role in food purchasing decisions. However, German consumers continue to opt for new health and wellness products and premium products in the market and have not demonstrated a huge shift in spending habits on food and beverages. Given that health and wellness related products usually have a higher price point, German consumers scrutinize and pay more attention to their claims. Companies clearly label their products and communicate messages that highlight product performance, benefits in order to outweigh price considerations and position their products in the functional categories.

Historic health and wellness expenditure per capita by type in Germany in US$
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Health and wellness by type 317.9 323.9 327.1 329.1 338.7 1.6
Naturally healthy (NH) 124.3 126.0 127.8 129.6 133.3 1.8
Better for you (BFY) 81.7 82.9 81.5 80.2 83.0 0.4
Fortified/functional (FF) 55.1 55.8 56.0 55.8 57.0 0.9
Organic 45.8 47.1 48.2 49.5 51.0 2.7
Free from 11.0 12.0 13.5 13.9 14.5 7.2

Source: Euromonitor, 2018

*CAGR: Compound Annual Growth Rate

Market data

Historic health and wellness market retail sales by category in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Total health and wellness 25,596.7 26,163.1 26,559.2 27,037.9 27,955.1 2.2
HW beverages 11,087.0 11,200.2 11,310.7 11,571.5 11,987.9 2.0
HW packaged food 14,509.7 14,963.0 15,248.5 15,466.4 15,967.2 2.4

Source: Euromonitor, 2018

*CAGR: Compound Annual Growth Rate

Historic health and wellness market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Total health and wellness 25,596.7 26,163.1 26,559.2 27,037.9 27,955.1 2.2
Naturally healthy (NH) 10,010.1 10,178.9 10,377.2 10,646.1 11,000.3 2.4
Better for you (BFY) 6,576.4 6,696.3 6,621.2 6,590.1 6,849.9 1.0
Fortified/functional (FF) 4,434.5 4,509.4 4,550.6 4,587.9 4,701.1 1.5
Organic 3,690.2 3,807.1 3,917.8 4,069.0 4,210.8 3.4
Free from 885.5 971.4 1,092.4 1,144.8 1,193.1 7.7

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Forecast health and wellness market retail sales by category in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Health and Wellness by Category 28,883.3 29,812.1 30,748.4 31,686.9 32,611.1 3.1
HW Beverages 16,481.3 16,966.8 17,442.5 17,902.0 18,341.5 2.7
HW Packaged food 12,402.0 12,845.3 13,305.9 13,784.9 14,269.6 3.6

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Forecast health and wellness market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Health and wellness by type 28,883.3 29,812.1 30,748.4 31,686.9 32,611.1 3.1
Naturally healthy (NH) 11,398.2 11,773.1 12,146.0 12,521.5 12,899.7 3.1
Better for you (BFY) 7,030.6 7,211.6 7,382.1 7,545.2 7,701.2 2.3
Fortified/functional (FF) 4,840.0 4,998.5 5,173.4 5,359.1 5,550.6 3.5
Organic 4,371.0 4,534.9 4,702.7 4,869.1 5,020.1 3.5
Free from 1,243.4 1,293.8 1,344.2 1,392.0 1,439.5 3.7

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Naturally Healthy

Naturally healthy beverages

In Germany, naturally healthy (NH) beverage products range from premium through standard to economy. NH tea and NH bottled water achieved the strongest retail value growth of 2.0% and 2.9% respectively among the main categories in 2017. Off-trade value sales of naturally healthy beverages grew by a CAGR of 1.1% from 2013 to 2017 to reach US$7.2 billion in 2017.

Historic naturally healthy beverages market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
NH hot drinks 1,117.8 1,111.9 1,136.0 1,152.7 1,205.3 1.9
NH soft drinks 5,836.2 5,839.6 5,864.6 5,924.5 6,046.0 0.9
NH fruit/vegetable juice 2,259.5 2,218.0 2,145.7 2,107.3 2,089.2 −1.9
NH non-cola carbonates 331.8 314.8 305.8 299.8 298.0 −2.7
NH Ready To Drink (RTD) green tea 62.8 63.3 65.7 71.0 77.9 5.5
Total naturally healthy beverages 6,954.0 6,951.6 7,000.6 7,077.2 7,251.3 1.1

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

NH hot and soft drinks and RTD green tea are expected to perform well for the forecasted period of 2018 to 2022, with a CAGR of greater than 2.6% in each category. In 2022, sales are expected to be more than US$8.3 billion. Despite general price sensitivity, especially in fresh food, packaged food, and beverages, German consumers seem to be increasingly prepared to accept a certain price premium in the health and wellness beverages category.

Forecast naturally healthy beverages market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2012
NH hot drinks 1,261.1 1,317.3 1,372.0 1,425.0 1,481.4 4.1
NH soft drinks 6,201.1 6,363.0 6,524.1 6,690.6 6,861.5 2.6
NH fruit/vegetable juice 2,109.4 2,135.7 2,160.8 2,187.6 2,214.3 1.2
NH non-cola carbonates 296.9 296.8 297.8 299.8 304.0 0.6
NH RTD green tea 85.6 94.1 103.5 113.6 123.6 9.6
Total NH beverages 7,462.1 7,680.3 7,896.1 8,115.6 8,342.9 2.8

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

From January 2013 to December 2017, there were 3,281 beverage products launched in Germany with an NH claim. Of total launches, 39.8% were new products, 38.2% were new variety/range extensions, while 17.8% were new packaging, 3.3% relaunches and 0.9% new formulations.

Naturally healthy new beverage products launched in Germany from January 2013 to December 2017
Launch type 2013 2014 2015 2016 2017 Launch count
New product 224 273 396 208 204 1,305
New variety/range extension 224 180 265 280 305 1,254
New packaging 74 80 195 116 120 585
Relaunch 11 15 28 30 23 107
New formulation 6 4 14 4 2 30
Total products 539 552 898 638 654 3,281
Source: Mintel Global New Products Database (GNPD), 2018

In the review period, 100 companies across Germany launched naturally healthy beverage products. The companies to launch the most products were Voelkel, DM Drogerie Markt and Alnatura. Voelkel launched 119 naturally healthy beverage products between 2013 and 2017.

Top naturally healthy beverage companies, from January 2013 to December 2017
Company 2013 2014 2015 2016 2017 Launch count
Voelkel 8 16 40 29 26 119
DM Drogerie Markt 2 0 17 42 19 80
Alnatura 15 4 28 13 15 75
PepsiCo 3 5 16 14 13 51
Dirk Rossmann 8 18 7 9 9 51
Lidl 10 11 8 7 8 44
Ulrich Walter 12 10 13 7 7 49
NORMA 20 7 12 13 6 58
Pukka Herbs 7 1 28 4 3 43
Nestlé 8 8 14 9 2 41
Source: Mintel GNPD, 2018

Packaged food naturally healthy

The rise in health concerns and diet-related conditions in Germany has led more consumers to improve their dietary habits and to seek better quality food. The naturally healthy category benefits greatly from the "clean labelling" trend (withdrawal of preservatives, colourants and other additives) which began in British and French modern grocery retailers.

Historic naturally healthy packaged food market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
NH cereal bars 135.5 139.2 141.2 147.4 154.6 3.4
NH dairy 166.8 171.0 180.4 189.1 196.2 4.1
NH fruit snacks 43.3 57.3 72.6 80.6 86.2 18.8
NH fruit and nut bars 21.8 28.6 35.5 43.4 50.4 23.3
NH high fibre food 1,104.0 1,130.0 1,150.8 1,172.6 1,196.1 2.0
NH honey 417.5 405.7 449.2 439.0 433.9 1.0
NH olive oil 275.1 285.6 302.6 326.4 344.3 5.8
NH rice 10.6 10.9 11.2 11.5 11.9 2.9
NH nuts, seeds and trail mixes 881.5 998.9 1,033.2 1,158.8 1,275.4 9.7
Total NH packaged food 3,056.1 3,227.3 3,376.6 3,568.9 3,749.0 5.2

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Forecast of naturally healthy packaged food market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
NH cereal bars 162.4 170.2 178.1 185.5 193.4 4.5
NH dairy 202.4 207.9 212.7 217.1 221.2 2.2
NH fruit snacks 93.4 101.8 111.5 122.8 135.6 9.8
NH fruit and nut bars 57.2 63.6 69.2 74.4 78.7 8.3
NH high fibre food 1,227.5 1,259.7 1,290.7 1,320.1 1,347.9 2.4
NH honey 431.9 432.7 435.3 439.3 444.0 0.7
NH olive oil 359.5 373.6 386.7 398.8 410.1 3.3
NH rice 12.3 12.7 13.0 13.4 13.7 2.7
NH nuts, seeds and trail mixes 1,389.5 1,470.7 1,552.7 1,634.5 1,712.3 5.4
Total NH packaged food 3,936.1 4,092.8 4,249.9 4,405.9 4,556.8 3.7

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

German consumers' attraction to health and wellness products is partly due to government education programs, media advertisements featuring healthy lifestyles and a growing body consciousness. This rise in health awareness has stimulated consumer interest in healthy foods and related products, leading food processors to look at marketing food and drinks on a health platform as a means of differentiation.

The health and wellness trend in Germany is not only expected to last over the longer term, but also to grow; new product launches with enhanced health features are likely to lead to future growth in all categories.

Naturally healthy packaged food products launched in Germany from January 2013 to December 2017
Launch Type 2013 2014 2015 2016 2017 Launch count
New product 84 122 169 97 88 560
New variety/range extension 37 48 74 63 70 292
New packaging 9 12 28 20 36 105
Relaunch 3 7 10 4 18 42
New formulation 2 6 1 1 0 10
Total products 135 195 282 185 212 1,009
Source: Mintel GNPD, 2018

Naturally healthy is the largest health and wellness category in Germany, claiming 39% of total per capita expenditure value sales in 2017 while showing relatively slow growth. The reason for this slow growth is not a lack of consumer interest in the category, but rather its relative maturity compared to other health and wellness categories. Germany enjoys the highest annual per capita spending on NH food and beverages in the EU.

Top companies of naturally healthy packaged food in Germany from January 2013 to December 2017
Company 2013 2014 2015 2016 2017 Launch count
Cosmoveda 4 0 5 4 7 20
Unilever 0 1 4 7 8 20
Helador 1 5 10 1 1 18
Arla Foods 0 2 1 7 6 16
Purefood 0 4 1 4 7 16
Dr. Klaus Karg 0 6 7 1 0 14
Sonnentor 8 3 0 1 1 13
Almette 1 3 3 2 4 13
Foodforplanet 0 4 3 5 0 12
Bäckerei Stiebling 2 5 1 1 2 11
Source: Mintel GNPD, 2018

Better for you

From 2013 to 2017, 8,172 food and beverage products were launched in Germany with better for you (BFY) claims. Of the total launches, 39.0% were new products, 35.3% were new variety/range extensions, and 17.0% were new packaging.

Better for you packaged food products launched in Germany from January 2013 to December 2017
Launch Type 2013 2014 2015 2016 2017 Launch count
New product 516 519 842 622 689 3,188
New variety/range extension 511 530 565 593 682 2,881
New packaging 191 233 335 307 326 1,392
Relaunch 75 118 115 96 139 543
New formulation 63 33 27 28 17 168
Total products 1,356 1,433 1,884 1,646 1,853 8,172
Source: Mintel GNPD, 2018

Retail sales of BFY packaged food and beverages in Germany were steady at a CAGR of 2.6% from 2013 to 2017. Despite the competition from other health and wellness categories, especially from organic and naturally healthy products, the BFY packaged food and beverage category remained very attractive to many German consumers.

Because of the large size of the category and the high number of sub-categories, the competitive environment in BFY packaged food remained very fragmented. The largest companies were Lidl, DM Drogerie Markt and Netto Marken discount, which all enjoyed high awareness and a positive reputation among German consumers in the categories where they were active. It is worth noting that top companies for these types of products are supermarkets and the launched products are mainly private label brands.

German retailers have been some of the fastest adopters of private labels in Western Europe over the last two decades. Private label manufacturers in Germany have been very efficient in tracking and responding to new trends initiated by national brands, thus narrowing the gap between innovative private labels. German consumers have recognized the advantages of private labels providing a similar level of quality to that of branded products at competitive prices.

Top companies of better for you packaged food and beverages in Germany from January 2013 to December 2017
Company 2013 2014 2015 2016 2017 Launch count
Lidl 11 18 24 36 52 141
DM Drogerie Markt 16 17 30 26 36 125
Netto Marken-Discount 17 35 12 26 31 121
Aldi Süd 15 32 21 24 22 114
Aldi Nord 33 28 22 6 18 107
Edeka Zentrale 18 18 21 16 21 94
NORMA 26 13 24 18 12 93
Dirk Rossmann 12 27 19 11 21 90
Alpro 10 16 23 20 19 88
Penny Markt 15 24 15 26 8 88
Source: Mintel GNPD, 2018

Better for you Beverages

BFY beverages recorded 2.6% CAGR from 2013 to 2017; reduced sugar beverages remained the largest category in BFY beverages in sales. With increased awareness about healthier living, more consumers are beginning to look for healthy variants of beverages, particularly within soft drinks, which are traditionally associated with high sugar content. Rising rates of obesity, diabetes, and cholesterol levels, especially among children and adults, are driving consumers to eagerly look for healthy beverages.

BFY reduced caffeine beverages declined by a CAGR of 2.9% to register sales of US$269.2 million in 2017. Reduced caffeine beverages almost exclusively consist of reduced caffeine coffee in Germany, which have declined in sales year over year since 2013.

Historic better for you beverages market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
BFY Reduced caffeine beverages 295.6 278.5 266.9 260.3 263.2 −2.9
BFY Reduced caffeine hot drinks 256.8 238.7 227.0 220.2 222.4 −3.5
BFY Reduced caffeine soft drinks 38.8 39.7 39.9 40.1 40.8 1.3
BFY Reduced sugar beverages 1,494.0 1,535.3 1,545.0 1,624.0 1,722.4 3.6
BFY Reduced sugar hot drinks 68.4 69.5 69.5 70.2 70.5 0.8
BFY Reduced sugar soft drinks 1,425.5 1,465.9 1,475.4 1,553.8 1,651.9 3.8
Other low calorie cola 1,169.5 1,217.9 1,229.3 1,308.8 1,401.8 4.6
Total BFY beverages 1,789.6 1,813.8 1,811.9 1,884.3 1,985.6 2.6

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

BFY beverages are expected to record a CAGR of 4.1% from 2018 to 2022, to reach sales of US$2.4 billion by 2022. According to Euromonitor International, growth opportunities in this very mature category will remain limited, and only be able to improve sales in certain niche categories.

Forecast better for you beverage market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 *CAGR % 2018-2022
BFY Reduced caffeine beverages 265.8 270.4 276.9 284.5 290.1 2.2
BFY Reduced caffeine hot drinks 224.2 227.9 233.2 239.6 243.8 2.1
BFY Reduced caffeine soft drinks 41.6 42.6 43.7 44.9 46.3 2.7
BFY Reduced sugar beverages 1,793.0 1,872.5 1,954.1 2,038.0 2,129.0 4.4
BFY Reduced sugar hot drinks 70.6 70.8 70.7 70.5 70.5 0.0
BFY Reduced sugar soft drinks 1,722.4 1,801.7 1,883.4 1,967.5 2,058.5 4.6
Other low calorie cola 1,467.1 1,539.4 1,613.8 1,690.7 1,774.9 4.9
Total BFY beverages 2,058.8 2,142.9 2,231.0 2,322.5 2,419.2 4.1

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Better for you packaged food

BFY reduced fat packaged food is the most significant product area in the category, accounting for sales of US$4.0 billion in 2017. The meagre 0.5% CAGR from 2013 to 2017 had a marked impact on the overall performance of BFY packaged food. This slight increase was partly due to stronger competition from organic and FF reduced fat packaged food.

BFY packaged food saw a slight growth from 2013 to 2017, however a CAGR OF 1.5% to reach sales of US$5.2 billion is forecast in 2022. EU food labelling legislationFootnote 1 is forcing food manufacturers to indicate the amount of trans-fat and added sugars in their products. Consumers view BFY products as being highly processed and are more likely to purchase organic products with natural ingredients in line with a more health-orientated lifestyle.

Historic of better for you packaged food market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
BFY Reduced fat packaged food 4,006.8 4,095.2 4,022.5 3,921.7 4,080.1 0.5
BFY Reduced salt food 5.3 5.4 5.5 5.6 5.8 2.3
BFY Reduced sugar packaged food 774.8 781.9 781.4 778.5 778.3 0.1
BFY sugar-Free boiled sweets 172.2 172.9 177.7 182.1 186.9 2.1
BFY sugar-Free toffees, caramels and nougat 105.8 105.6 105.2 104.0 102.4 −0.8
Total BFY packaged food 4,786.8 4,882.5 4,809.3 4,705.8 4,864.2 0.4

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Forecast of better for you packaged food market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
BFY Reduced fat packaged food 4,171.4 4,248.5 4,308.1 4,357.2 4,393.5 1.3
BFY Reduced salt food 5.9 6.1 6.2 6.4 6.5 2.5
BFY Reduced sugar packaged food 794.5 814.1 836.8 859.1 882.0 2.6
BFY sugar-Free boiled sweets 195.1 204.5 214.6 224.4 233.9 4.6
BFY sugar-Free toffees, caramels and nougat 101.8 101.8 102.1 102.8 103.6 0.4
Total BFY packaged food 4,971.8 5,068.7 5,151.2 5,222.7 5,282.0 1.5

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Fortified / Functional

The overall category achieved 1.5% CAGR from 2013 to 2017 to reach sales of US$4.7 billion. Despite fortified/functional beverages encompassing a wide range of health related claims, energy drink players remained the growth leaders in the Fortified/Functional (FF) beverages category.

FF packaged food is expected to see very stable development. While the category is expected to see growth in niche positioning, the major obstacles are the competition from naturally healthy products and organic products, which are expected to increase. Furthermore. While these offer completely different benefits, they are likely to cannibalise products from other higher-priced categories.

Fortified / Functional beverages

The proportion of sales taken by FF beverages continued to grow in Germany. While in 2013, sales of FF drinks was worth US$1.7 billion, in 2017, this figure grew considerably to US$2.0 billion in 2017 at a CAGR of 3.8%.

Historic of fortified / functional beverages market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Fortified/functional beverages 1,788.8 1,861.8 1,906.8 1,972.5 2,073.7 3.8
FF hot drinks 307.7 304.1 305.0 308.5 317.6 0.8
FF instant coffee 6.9 6.5 6.4 6.3 6.3 −2.2
FF fruit/herbal tea 157.6 151.9 150.3 151.2 154.9 −0.4
FF other hot drinks 143.2 145.7 148.3 151.1 156.4 2.2
FF chocolate-based flavoured powder drinks 135.2 137.6 140.0 142.7 147.8 2.3
FF plant-based and malt-based hot drinks 7.9 8.1 8.3 8.4 8.6 2.1
FF soft drinks 1,481.1 1,557.7 1,601.8 1,664.0 1,756.1 4.3
FF bottled water 91.0 96.5 97.3 93.9 91.1 0.0
FF energy drinks 936.4 1,005.0 1,055.9 1,124.3 1,211.6 6.7
FF fruit/vegetable juice 132.8 132.3 130.8 130.4 132.7 0.0
FF sports drinks 320.9 323.9 317.7 315.4 320.8 0.0
Total FF beverages 4,434.5 4,509.4 4,550.6 4,587.9 4,701.1 1.5

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

FF beverages are expected to see a CAGR of 3.5% from 2018 to 2022 to reach sales of US$5.5 billion in 2022. The health and wellness trend is expected to continue in the German market with FF soft drinks and FF energy drinks expected to remain the main drivers of growth.

Forecast of fortified / functional beverages market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 *CAGR % 2018-2022
Fortified/functional beverages 2,168.8 2,272.6 2,387.3 2,508.8 2,633.4 5.0
FF hot drinks 325.6 335.4 346.6 358.5 368.8 3.2
FF instant coffee 6.2 6.1 6.1 6.0 6.1 −0.4
FF fruit/herbal tea 157.6 161.3 165.5 170.4 175.1 2.7
FF other hot drinks 161.8 168.0 175.0 182.1 187.6 3.8
FF chocolate-based flavoured powder drinks 153.0 159.0 165.8 172.7 178.1 3.9
FF plant-based and malt-based hot drinks 8.8 9.0 9.2 9.4 9.6 2.2
FF soft drinks 1,843.2 1,937.2 2,040.7 2,150.3 2,264.5 5.3
FF bottled water 87.9 85.8 84.4 83.3 82.8 −1.5
FF energy drinks 1,294.3 1,381.3 1,475.9 1,573.3 1,673.7 6.6
FF fruit/vegetable juice 134.3 136.4 138.5 141.0 143.7 1.7
Total FF beverages 4,840.0 4,998.5 5,173.4 5,359.1 5,550.6 3.5

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

From January 2013 to December 2017, 1,389 beverage products were launched in Germany with a FF claim. Of total launches, 47.9% were new products, 32.8% were new variety/range extensions, 13.7% were new packaging, 4.5% were relaunches and 1.2% were new formulations.

New fortified / functional beverages products launched in Germany from January 2013 to December 2017
Launch type 2013 2014 2015 2016 2017 Launch count
New product 72 99 177 132 185 665
New variety/range extension 70 69 90 103 124 456
New packaging 14 34 42 39 61 190
Relaunch 15 8 10 10 19 62
New formulation 3 0 1 6 6 16
Total products 174 210 320 290 395 1,389
Source: Mintel GNPD, 2018
Top companies of fortified / functional beverages products launched in Germany from January 2013 to December 2017
Company 2013 2014 2015 2016 2017 Launch count
Innocent 0 2 8 14 7 31
Net to Maren-Discount 6 8 11 2 4 31
Lidl 2 8 3 3 14 30
NORMA 6 12 3 3 6 30
Eckes-Granini 3 7 2 10 6 28
Dirk Rossmann 7 4 3 7 6 27
Valensina 2 2 3 9 8 24
Aldi Süd 3 2 6 3 9 23
DM Drogerie Markt 2 1 5 7 7 22
Aldi Nord 2 2 5 0 8 17
Source: Mintel GNPD, 2018

Fortified / Functional packaged food

Forecast of fortified / functional packaged food market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
FF baby food 346.5 359.0 372.1 378.7 378.3 2.2
FF breakfast cereals 429.6 420.3 416.1 425.2 432.9 0.2
FF bread 41.3 42.1 42.2 42.4 42.7 0.8
FF confectionery 988.2 1,001.1 1,010.1 1,003.7 1,010.6 0.6
FF dairy 814.2 798.4 776.0 734.2 728.0 −2.8
FF sweet biscuits, snack bars and fruit snacks 16.8 17.4 18.0 21.5 24.9 10.3
FF vegetable and seed oil 9.2 9.3 9.2 9.7 10.1 2.4
Total FF packaged food 2,645.7 2,647.7 2,643.8 2,615.5 2,627.4 −0.2

Source: Euromonitor International, 2018

CAGR: Compound Annual Growth Rate

Fortified / Functional packaged food products launched in Germany from January 2013 to December 2017
Launch type 2013 2014 2015 2016 2017 Launch count
New product 189 173 304 295 326 1,287
New variety/range extension 201 184 209 252 301 1,147
New packaging 86 85 90 97 130 488
Relaunch 29 79 53 42 68 271
New formulation 35 12 11 12 5 75
Total products 540 533 667 698 830 3,268
Source: Mintel GNPD, 2018
Forecast fortified / functional packaged food market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
FF baby food 382.0 388.3 395.5 402.1 409.6 1.8
FF breakfast cereals 439.3 447.0 455.1 463.9 473.4 1.9
FF bread 43.1 43.7 44.4 45.1 45.9 1.6
FF confectionery 1,040.3 1,074.8 1,112.8 1,154.5 1,196.9 3.6
FF dairy 727.1 728.4 730.5 733.1 737.0 0.3
FF sweet biscuits, snack bars and fruit snacks 28.8 32.9 36.7 40.2 42.6 10.3
FF vegetable and seed oil 10.5 10.8 11.1 11.4 11.7 2.7
Total FF packaged food 2,671.2 2,725.9 2,786.1 2,850.3 2,917.2 2.2
Source: Euromonitor International, 2018

Organic

The German organic food market is the largest market in the EU and the second largest in the world. Organic food and beverage sales in Germany have increased over the last couple of years and peaked in 2017 with organic food and beverage sales reaching over US$4.2 billion.

Numerous products were imported into an ever greater extent, which can potentially be produced domestically as domestic production has failed to keep pace and the increasing demand was mostly covered by higher imports.

The German organic food market is projected to grow at a CAGR of over 5.3% during 2018-2022. Changing food consumption patterns, socio-economic changes, changes in conventional food taste and surging retail presence of specialist organic retailers across the country are anticipated to boost the organic food market in Germany over the next five years. Hypermarkets remain the No. 1 distribution channel for organic products (40.6% of the total organic turnover), followed by discounters (31.6%), drugstores, and supermarkets.

Please see the Canada - European Union Organic Equivalency Arrangement for information on Canadian certified organic products considered organic in the EU.

Organic Beverages

Historic of organic beverages market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Organic coffee 171.3 186.8 200.3 212.6 230.4 7.7
Organic tea 94.8 98.2 102.7 108.3 115.3 5.0
Organic other hot drinks 6.4 6.8 7.1 7.3 7.4 3.7
Organic soft drinks 282.2 281.2 281.4 309.3 324.2 3.5
Total organic beverages 554.7 573.0 591.5 637.5 677.2 5.1

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

According to a recent Mintel study, 58% of Germans who buy organic food and drink claim to do so because these products are GMO-Free. For over half of consumers (54%), the fact that organic food and drink products do not contain pesticides and chemicals is an important factor. The same proportion of consumers (54%) single out the absence of artificial additives and preservatives in organic food and drink products as another significant factor influencing their purchase decision.

The organic trend in Germany is directly linked to strong consumer demand for naturally healthy food. Growing consumer concerns for food safety, the natural environment and their overall health are fuelling demand for organic products, leading to increased use of organic certification labels in German food and drink launches.

Forecast organic beverages market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Organic coffee 247.5 264.1 280.2 295.5 309.2 5.7
Organic tea 120.8 126.7 132.6 138.7 144.6 4.6
Organic other hot drinks 7.6 7.8 8.0 8.3 8.5 2.8
Organic soft drinks 336.4 350.9 370.7 395.5 411.9 5.2
Total organic beverages 712.3 749.4 791.5 838.0 874.2 5.3

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Organic packaged food

Growth occurred across all organic packaged food sectors from 2013 to 2017, and is forecasted through 2022. Confectionery, snack bars, and edible oils all outpaced the growth of the overall market and are forecasted to continue to do so. Larger subsectors such as organic spreads and baby food will experience slower growth relative to the entire sector.

The German market for organic packaged food is very mature, but it is large and diverse. Organic goods enjoy mainstream appeal and widespread trust in Germany, thanks in part to the efforts of discounters to offer value-for-money packaged organics. German consumers have a variety of concerns, but choose to consume organic goods because of ethical, environmental and health reasons.

Different organic subsectors have different market structures: baby food is extremely concentrated, whereas baked goods are primarily produced for private labels or artisanal bakers. Subsector analysis allows us to understand these market structures and trends, and to see which subsectors are forecasted to experience the most growth within sectors.

According to Mintel, from January 2013 to December 2017, there were 12,796 food products launched in Germany with an organic claim. Of the total launches, 41.9% were new variety/range extension, 36.9% were new products, 14.1% were new packaging, 5.7% were relaunches, and 1.5% were new formulation.

Organic packaged food products launched in Germany from January 2013 to December 2017
Launch type 2013 2014 2015 2016 2017 Launch count
New variety/range extension 824 786 1,121 1,287 1,348 5,366
New product 786 873 1,194 904 962 4,719
New packaging 220 273 419 424 463 1,799
Relaunch 31 126 169 211 187 724
New formulation 32 42 49 34 31 188
Total products 1,893 2,100 2,952 2,860 2,991 12,796
Source: Mintel GNPD, 2018

Alnatura is the leader in the organic packaged food category, according to Euromonitor. The continued success of the company is due to its clear strategic direction with a focus on sustainable value creation.

Top companies of organic packaged food in Germany by number of launches from January 2013 to December 2017
Company 2013 2014 2015 2016 2017 Launch count
Alnatura 70 93 108 109 107 487
DM Drogerie Markt 17 15 96 161 110 399
Dennree 24 40 63 98 83 308
NORMA 142 56 49 21 35 303
Lidl 33 26 36 99 94 288
Aldi Nord 39 30 62 49 68 248
Dirk Rossmann 48 51 44 37 37 217
Rapunzel Naturkost 24 33 44 54 42 197
Aldi Süd 49 38 24 29 46 186
Edeka Zentrale 30 22 54 39 34 179
Source: Mintel GNPD, 2018

It is predicted that the average unit prices of organic packaged food products will remain stable in the years ahead. Competition via discounters, economy, and private label products and brands will attract consumers seeking affordable organic products.

Historic organic packaged food market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Organic baby food 330.1 336.9 339.1 342.8 346.0 1.2
Organic bread 719.9 736.1 743.5 752.6 762.6 1.5
Organic breakfast cereals 47.6 48.5 49.8 51.7 53.8 3.1
Organic chilled processed meat and seafood 432.3 447.4 461.3 488.8 509.3 4.2
Organic confectionery 218.6 230.5 248.4 262.6 276.5 6.1
Organic dairy 740.2 773.6 801.1 825.4 858.9 3.8
Organic edible oil 62.9 64.9 66.8 71.2 74.9 4.5
Organic frozen meat, seafood, fruit and vegetables 131.5 132.4 133.3 138.7 142.2 2.0
Organic ice cream 18.6 19.1 20.1 20.6 21.2 3.3
Organic ready meals 46.9 49.0 50.6 52.4 54.2 3.7
Organic rice, pasta and noodles 25.6 26.2 26.9 27.7 28.5 2.7
Organic sauces, dressings and condiments 33.1 33.9 34.8 35.8 36.7 2.6
Organic savoury snacks 21.8 23.2 24.1 25.7 27.0 5.5
Organic shelf stable meat, seafood, fruit and vegetables 153.6 155.5 157.5 164.5 168.6 2.4
Organic soup 4.7 4.8 4.9 5.1 5.2 2.6
Organic spreads 123.4 125.8 135.9 136.6 137.3 2.7
Organic sweet biscuits, snack bars and fruit snacks 24.8 26.2 28.3 29.5 30.8 5.6
Total organic packaged food 3,135.6 3,234.1 3,326.3 3,431.5 3,533.5 3.0

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Forecast organic Packaged food market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Organic baby food 352.1 359.4 366.7 373.2 379.5 1.9
Organic bread 778.1 794.3 810.4 825.9 840.9 2.0
Organic breakfast cereals 55.9 58.0 60.0 61.9 63.6 3.3
Organic chilled processed meat and seafood 534.2 557.0 577.7 597.0 614.6 3.6
Organic confectionery 295.0 314.1 332.3 349.1 365.3 5.5
Organic dairy 893.5 929.1 968.1 1,006.7 1,043.9 4.0
Organic edible oil 78.1 81.2 84.0 86.5 88.9 3.3
Organic frozen meat, seafood, fruit and vegetables 147.1 152.0 156.5 160.6 164.4 2.8
Organic ice cream 22.0 22.9 23.7 24.6 25.4 3.7
Organic ready meals 56.2 58.1 59.9 61.6 63.2 3.0
Organic rice, pasta and noodles 29.5 30.5 31.4 32.2 32.9 2.8
Organic sauces, dressings and condiments 37.8 38.9 40.0 41.0 42.0 2.7
Organic savoury snacks 28.5 30.0 31.3 32.5 33.6 4.2
Organic shelf stable meat, seafood, fruit and vegetables 174.0 179.5 184.5 189.2 193.7 2.7
Organic soup 5.3 5.5 5.6 5.7 5.8 2.3
Organic spreads 138.9 140.9 143.1 145.4 147.9 1.6
Organic sweet biscuits, snack bars and fruit snacks 32.5 34.2 36.1 38.0 40.1 5.4
Total organic packaged food 3,658.8 3,785.5 3,911.2 4,031.1 4,145.9 3.2

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Free from

Retail sales of free from products (including packaged food products that are either free from gluten, free from lactose, free from dairy, or free from meat) continued to see significant growth in 2017. In free from packaged food, the majority of products tended to be premium in terms of positioning and retail price, which consumers did not mind. Some German consumers are following the trend by avoiding dairy, gluten, or lactose without the health-related need to do so. The exception was meat, with more Germans following either vegetarian or vegan lifestyles.

Growth of type two diabetes, gluten intolerance, and lactose intolerance among the German population is expected to continue in the coming years. This is certainly due to the demographic trend of an aging society and the higher number of people diagnosed with food intolerance-related problems, therefore boosting the growth prospects of this category.

From January 2013 to December 2017, there were 681 beverage products launched in Germany with a free from claim. Of the total products launched, 39.8% were new products, 38.2% were new variety/range extensions, 17.8% were new packaging, 3.3% were relaunches, and 0.9% were new formulations.

Free from packaged food and beverages products launched in Germany from January 2013 to December 2017
Launch type 2013 2014 2015 2016 2017 Launch count
New product 44 66 65 59 67 301
New variety/range extension 44 32 46 43 59 224
New packaging 8 5 42 21 29 105
Relaunch 2 12 6 10 13 43
New formulation 2 1 0 2 3 8
Total products 100 116 159 135 171 681
Source: Mintel GNPD, 2018
Historic free from packaged food market retail sales by type in Germany in US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Free from allergens 18.9 20.2 20.8 20.8 20.9 2.5
Free from dairy 218.6 233.0 241.2 249.0 255.3 4.0
Free from gluten 206.9 218.7 227.5 235.4 243.0 4.1
Free from lactose 329.2 350.0 374.6 397.7 419.7 6.3
Free from meat 111.8 149.4 228.3 241.9 254.3 22.8
Free from meat ready meals 5.6 5.7 5.8 5.9 5.9 1.3

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Forecast free from packaged food market retail sales by type in Germany in US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Free from allergens 20.7 20.7 20.6 20.4 20.5 −0.2
Free from dairy 261.6 270.1 279.6 289.3 299.5 3.4
Free from gluten 251.5 259.9 268.0 275.6 283.0 3.0
Free from lactose 442.1 463.6 485.6 506.4 526.9 4.5
Free from meat 267.4 279.6 290.4 300.2 309.6 3.7
Free from meat ready meals 6.1 6.2 6.3 6.4 6.6 2.0

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

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Resources

Sector Trend Analysis – Health and wellness trends in Germany
Global Analysis Report

Prepared by: Kris Clipsham, Market Analyst

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