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International Resources: Global Market Profile: Germany

Germany

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Germany from the German Federal Ministry of Food, Agriculture, and Consumer Protection and Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Fresh Fruit, Vegetable, and Flower Market
Consumer Trends
Entering the German Market
Trade Agreements
Food Standards and Regulations
Business Protocol
Export Business Reminders
Government Resources and related links

Fresh Fruit, Vegetable, and Flower Market

Fruit and Vegetable Market

Germany is the largest importer of fresh fruit and vegetables in the European Union. Total sales value of fresh fruit and vegetables in 2006 was €6.1 billion.

The chief suppliers for fresh fruit are Italy and Spain. Citrus fruit is imported from Morocco, Israel, the United States, South Africa, Argentina, Uruguay, and Brazil, and is available year-round. The main suppliers of apples, berries, cherries, grapes, peaches, and pears are Chile, Argentina, Brazil and South Africa. Tropical fruit (such as avocados, melons, kiwis) are imported from the Southern Hemisphere.

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 and New Zealand.

The main vegetable suppliers to Germany are the Netherlands, Spain, Italy, France and Belgium; asparagus and mushrooms are increasing in import quantities to Germany. The most important vegetables grown in Germany are asparagus, carrots, and onions.

Fresh Flower Market

About 36% of all flowers and ornamentals sold on the German market are from domestic production. The majority of flowers are imported from the Netherlands. Particularly during the winter months, flowers are imported from Israel, Ecuador, Colombia, Kenya, and other non-European Union countries.

The best selling flowers on the market are roses, tulips, chrysanthemums, gerberas, carnations, and lilies.

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Consumer Trends

Germany is a federal republic of 16 states that have differing culinary tastes and traditions. In the southern states the diet generally consists of pork, potatoes, and fresh or preserved vegetables, whereas in the northern states diets are more diverse and include a wider variety of ingredients. The large communities of immigrants in Germany have influenced tastes for foreign dishes.

The most popular fruits among German consumers are apples, bananas and oranges. Exotic fruits, such as pineapples and mangos, are becoming more popular; the consumption of pineapples and mangos increased by 15% and 11% in 2005. However, prices of the fruit decreased, in part due to the increased sales of the fruit through discount stores. Germans only tend to buy fruit if it is stacked in large quantities on fruit shelves.

In 2005 tomatoes were the most popular vegetable, followed by carrots and cucumbers. Discount stores are an important outlet for vegetables.

Germany has a lower price structure than France or the United Kingdom, though high quality is expected. Generally consumers are very price conscious; this has a great effect on the sales of food products. Discounters continue to increase in popularity and are an outlet for sales of exotic fruits. There is a group of consumers who demand high quality and non-traditional and exotic products and are willing to spend more money on fruit and vegetables, particularly on organics.

Health is an important trend. Germans are becoming more concerned about the effects food have on their health. Nutritional value and health benefits of food products garner more attention. Vegetables and fruits are becoming more popular because they are considered good choices for a healthy diet.

The organic market has been growing for many years and is the largest in the European Union, despite the fact that organics are often marked 50-100% up in price. Sales of organic products in 2005 jumped 14% and comprised nearly 2.3% of total German food sales. Concerns about the environment and the safety of the food supply have led many consumers to buy organics.

Comparatively slow growth in overall food and beverage sales and competition among retailers has encouraged buyouts and consolidation. Consequently, a few giant retailing companies dominate food and beverage sales in Germany and throughout Western Europe. In addition domestic and imported products compete in the market and governments or quasi-governmental organizations spend large funds on promoting the products.

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Entering the German Market

The German fruit market is traditionally supplied through specialized importers. Usually supermarket chains and discounters do not import directly from a supplier. Nevertheless there is a growing trend for supermarkets to contract directly with an overseas supplier, with customs clearance, storage and distribution being handled by an appointed importer.

Suppliers interested in creating a market for their products must be prepared to:

Offer a product that meets German/EU food law, packaging, and labeling requirements;
Invest time and money to develop the market (e.g. provide samples to test the market);
Start with smaller shipments (pallets instead of container loads); and
Assist the German importer with sales promotion support, especially when such products are not well known to German consumers.

The German importer has legal liability for imported products that are marketed in Germany. Therefore the importer has a strong interest in working with the foreign supplier to ensure that the product meets all food law and marketing requirements. Finding the right partner is the way to succeed in the German market.

The body responsible for issuing import permits for the foreign trade in commercial goods is the

Bundesamt für Wirtschaft (BAW )

(Federal Economics Agency )

P.O.Box 51 71

65726 Eschborn

Tel: 06196-404 0

Fax: 06196-942 260

Internet: http://www.bawi.de

e-mai: bawi@rhein-main.net

The preferred times for business appointments are between 10:00 a.m. and 1:00 p.m. or between 3:00 p.m. and 5:00 p.m. Avoid scheduling appointments on Friday afternoons, as some offices close by 2:00 p.m. or 3:00 p.m. on Fridays.

Germans usually have six weeks of paid vacation, which means someone is almost always on holiday. Take this into consideration when making appointments or planning visits. Germans generally take long vacations during July, August, December and Easter, when schools have breaks.

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Trade Agreements

Germany is a member of the European Union. European Union agricultural and trade policies are major determinants of agricultural production and trade. The Common Agricultural Policy states that there will be product preference in the internal market of the European Union over foreign imports through common customs tariffs.

The European Union has Regional Trade Agreements (RTAs) with these areas or countries:

Chile (EU-Chile)
Mexico (EU-Mexico)
Europe (EU-European Free Trade Area)
South Africa (EU-South Africa)

EU Regional Trade Agreements under negotiation include:

• EU and the Gulf Cooperation Council (GCC), comprising of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE),

• the EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay, and Venezuela which joined the group on 4 July 2006),

• the EU and its Mediterranean Partners (Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, the Palestinian Authority, Lebanon, Syria, Turkey)

• the EU and the Association of South East Nations (ASEAN), comprising of Philippines, Indonesia, Malaysia, Singapore, Thailand, Brunei, Vietnam, Laos, Burma, and Cambodia,

• the EU and Korea, and the EU and India.

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Food Standards and Regulations

Imported food products must be in agreement with German/European Union regulations, with respect to ingredients, packaging and labeling, and phytosanitary requirements. The different requirements and regulations are set forth by the European Food Safety Authority and can be found here. No official agency in Germany is responsible for food label registration, clearance, and approval, but private registered food laboratories are available to provide these services.

Irradiated foods are prohibited in Germany (excepting dried aromatic herbs and spices).

Since the introduction of the EU single market policy, imports from listed third countries (non-EU countries) are permitted only at the external borders of the European Union and therefore only at certain points of entry (including seaports Bremerhaven, Hamburg and Frankfurt airport).

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Business Protocol

Men should wear dark, conservative business suits. Women should wear business suits or conservative dresses. Wearing excessively ornate jewelry or displaying items of conspicuous wealth should be avoided, especially in the former East Germany.
Appointments are mandatory. They should be made 1 to 2 weeks in advance. If you write to schedule an appointment, do so in German.
A brief, firm handshake is the traditional greeting. When entering a room, you should shake hands with everyone individually, including children.
Use a person’s title and their surname until invited to use their first name. Titles are important and denote respect. You should address the person as either Herr (Mr.) or Frau (Ms., Mrs.) and then the title, followed by the surname.
German businesspeople are usually cautious of new ideas and concepts and do not respond as much to the “sell” as Australians, Northern Americans, and Spaniards. Give Germans logical argumentation and concrete examples upon which to base your proposal, using many more facts and data that you might use normally.
The German side arrives at a meeting well-informed, and will expect the same from you.
Sometimes Germans will look for deficiencies or mistakes in your products or services and will openly draw your attention to them if they in any way do not correspond to your claims. This form of direct disagreement and criticism is possible in social interactions, not because people don't feel uncomfortable when they hear it, but because such a statement is based on objective, impersonal truths.
Brochures aimed at the German market should be serious in tone and provide a lot of technical data and make claims that can be backed up by concrete facts and examples.
Germans often signal their approval or thanks at the conclusion of a meeting or presentation by gently rapping their knuckles on the tabletop instead of applauding
Meetings during which Germans will ask you about your product, even initial ones, will often carry a tone similar to an academic oral examination. Questions will fly after a brief introduction of persons. You may often be interrupted halfway through your answer, as soon as the other party feels they have received a satisfactory answer to their question, at which point they will move on to the next question.
Interruptions are also common if the other person thinks you are getting off topic.
Meetings follow strict agendas, including starting and ending times. They are also very formal.
When entering a room, the eldest or highest-ranking person enters first. Men enter before women if they have an equal age and status.
Business is hierarchical; decisions are made at the top of the company.
Contracts are final after signing. Reaching for further concessions is not possible, unless both sides agree on it. Failure to abide by the terms of a signed contract can result in legal action taken against the partner. Attempts to continue negotiations or revise fixed terms will create distrust and suspicion and may lead to the German side ending the agreement.
Avoid confrontational behavior or high- pressure tactics.
Lunch is the usual meal for business discussions and is usually from 12:00 to 13:00 p.m.
Paying compliments is not part of German business protocol and can frequently cause embarrassment and awkwardness. Of course employees would appreciate praise from superiors, but do not expect it. Compliments that are from strangers or very casual acquaintances especially can be viewed with suspicion.
If you are invited to a German’s house, always arrive on time. Do not arrive early, and call if you must be late. You should bring a gift such as chocolates or flowers (such as yellow roses or tea roses). Do not give red roses, which symbolize romantic intentions, and do not give carnations, lilies, or chrysanthemums, which symbolize mourning or are used at funerals. If you bring wine it should be imported, Italian or French. It is recommended that you do not give German wines which can be viewed to mean you do not think the host will serve a quality wine. Usually gifts are opened when received.
Small gifts are polite, especially when contracts are agreed upon for the first time. Do not give a substantial gift in private. The larger and more generous the gift, the more official and public the giving.
Remain standing until you are invited to sit down.
Table manners are Continental—the fork is held the left hand and the knife in the right. Do not eat until the host or someone says “Guten apetit” (Good appetite). Cut as much of your food with your fork as you can, do not cut salad lettuce, and finish everything on your place.
Send a hand-written thank you card to the hosts upon returning home.

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Export Business Reminders

Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance, and respond to such requests with diligence and in a timely fashion.
Keep in mind the date is written Day/Month/Year.
Use metric terms.
Use letters of credit to reduce risk.
Hedge export values with your bank if you are concerned about exchange rate risk

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International Resources: Global Market Profile: Germany

Table of Contents

Fresh Fruit, Vegetable, and Flower Market

Consumer Trends

Entering the German Market

Trade Agreements

Food Standards and Regulations

Business Protocol

Export Business Reminders

Related Links and Government Resources