Exporting fresh fruit and vegetables to Germany

Germany imported 10.9 billion euros’ worth of fresh produce in 2017. Most of it is sold through a consolidated number of supermarkets and discounters that maintain high quality standards. At the same time, Germany also offers ample opportunities for exporters to reach specialized, ethnic or independent stores and food services via wholesalers. As an exporter from a developing country, you have the choice to supply the German market directly or use international traders in the Netherlands or Belgium.

1. Country description

Positioned in the heart of Europe with a population of over 80 million, Germany is the largest European market for fresh fruits and vegetables. Being a federal republic, it is important to understand Germany’s cultural diversity and recognize its regional differences.

Logistically, it has sea access through the port of Hamburg, but it also gets a large share of its supplies through the Netherlands. Germany borders nine different countries, but its re-exports are generally minimal.

2. Doing business in Germany

Business culture in Germany is formal and precise. German entrepreneurs make rational decisions and they expect you to provide a factual presentation of your offer. German buyers of fresh fruit and vegetables value punctuality and fast responses, they will look at your track record and previous experience in these aspects.

German importers are dealing with highly demanding consumers and are therefore aiming for perfection. Consumers are price conscious but also seek the best quality. Product labels, especially German ones such as the BIO label or PRO PLANET label of the supermarket Rewe, provide consumers with the confidence of buying a good product.

3. Finding buyers in Germany

Sharing personal data is not common for Germans, who value their privacy highly, even in strictly professional matters, which is why it can be challenging to find buyers’ personal data. Social media such as LinkedIn have very little penetration in Germany. The leading online business network for German-speaking countries is XING, which indeed can be very useful to get new trade contacts.

As a foreign supplier, it is still best to introduce yourself in person and build confidence by doing so. The best occasion to meet potential business partners in person is during trade fairs. The main annual event is Fruit Logistica in Berlin in February, the largest trade fair for fresh fruit and vegetables in Europe.

4. What makes Germany an interesting market for fresh fruit and vegetables?

Germany’s attractiveness is size

Size is the most attractive feature of Germany for any foreign supplier. With more than 80 million consumers, Germany is the largest European market, importing 10.9 billion euros’ worth of fresh fruits and vegetables in 2017. This is 20% of all fresh produce imported into Europe.

Around a quarter is directly imported from developing countries. Germany is able to produce a variety of summer fruit such as apples and berries, as well as vegetables, but for off-seasonal, exotic and tropical products, it relies heavily on external suppliers.

Internal market goes before export

Most German imports and production of fresh fruit and vegetables is destined for the internal market. Exports add up to only 1.5 billion euros:

• Some of the exotic and tropical imports are transported to Central and Eastern Europe.
• Other export products are either large commodities such as bananas or local produce such as potatoes, berries, apples, sweet peppers, asparagus, onion, lettuce and cabbage to surrounding countries including the Netherlands and Denmark.

In short, Germany offers opportunities as a final destination country with a limited export reach to surrounding countries. To supply to other European countries, you must adapt a different strategy working with other partners.

Germany has a reasonable consumption of fresh fruit and vegetables: 54.8% of the Germans consume one or more portions a day and the average monthly budget is 131 euros, according to consumer research. Vegetables that typically form part of a regular German diet include tomatoes, root vegetables, onion, potatoes, cucumber and cabbages. The most popular fruits are apples, bananas, oranges and table grapes.

Europe complements the German supply with tomatoes, sweet peppers, table grapes, apples and cucumbers. Popular import products from developing countries include more tropical varieties (see figure 3). Imports of varieties from developing countries that have increased significantly over the past 5 years include berries, avocados, dates, mangoes and melons.

In spite of the popularity of locally-produced products, Germany offers significant opportunities for foreign varieties.

5. What trends offer opportunities on the German market for fresh fruit and vegetables?

Health as the driver of consumption

Health is becoming increasingly important. Nearly a third of the German consumers identify themselves as ‘health conscious’. This translates into a growing number of people with vegetarian or vegan diets and an increased consumption of organics, both which can be beneficial for the fresh fruit and vegetables trade. For nearly 70% of German consumers, health is one of the most important factors in purchasing fresh products.

Growing market share of organic fruit and vegetables

According to the Research Institute of Organic Agriculture (FiBL), the total retail sales of organic food in Germany increased 9.9% in 2016, reaching a value of 9.5 billion euros which represents 5.1% of the total food market. In the same year, the German consumer spent an average of 116.4 euros on organic food. For fresh fruit and vegetables, the  share of organic items in the average household food purchases amounted to 6% in 2016 for fruit and 7.1% for vegetables.

By supplying organic fruit and vegetables to Germany, you are entering a growth market where you can leverage the uniqueness of your products and your business as a small-sized company. Remember, however, that the organics niche is also by far one of the most challenging segments in terms of compliance.

Consciousness leads to green and local purchases

Increased concerns about the environment, climate change, society, food shortages, quality, genetic engineering and toxins all result in more conscious purchases from the part of German consumers. Sustainability and the environment still play a subordinate role in the everyday life of most Germans, but awareness will increasingly influence purchasing decisions in the coming years.

At the same time, consumers have a hard time recognising sustainable products and place a lot of responsibility on the retailer. Your buyers act on this by requiring transparency and certifications from your company, including actions to register and reduce the use of pesticides, focus on the safety and well-being of employees and limit the use of water. As a supplier, it is crucial to understand and comply with these requirements.

Along with the increased attention for sustainable products, German buyers tend to focus more on locally-sourced products that use less packaging and use better communication. When dealing with the German market, you must be aware of local seasons and provide information on the origin of your product, your farm and the production methods.

Focus on shopping experience: time, indulgence, convenience, price

Consumers are becoming more interested in the story of a product and its producer. At the same time, the purchase should be fast, convenient, affordable and possibly done at any time of the day. Still, around 80% of German consumers prefer to go shopping in person, check and smell a product before purchasing.

Grocery shopping in developed countries is no longer just about food procurement, it has become an experience that can be powered by different motivations. This has made retailers rethink the principles of the shopping experience. Some of the key aspects to take into account when exporting to Germany is presentation and adaptive marketing that can make your product stand out.

6. What are the requirements for fresh fruit and vegetables to be allowed on the German market?

Germany follows the European legal standards and requirements. For a complete overview of these standards refer to the CBI’s buyer requirements for fresh fruit and vegetables and consult the specific requirements for your product on the EU Trade Helpdesk.

Less pesticides than European legislation

Pesticide residues are one of the crucial issues for fruit and vegetable suppliers to the Germany market. The European Union has set a legal limit of maximum residue levels (MRLs), which also applies tin Germany.

Official food control and inspection is part of the responsibility of the federal states (Länder). The competent Länder ministries draw up monitoring programmes that are carried out by the food inspection and veterinary offices in the urban and rural districts. The Federal Office of Consumer Protection and Food Safety (BVL) provides assistance in coordination and advisory.

Legislation is so strictly followed that large German retailers have set their own voluntary residue levels at 50–70% below the European MRLs. The limits set by discounter Lidl are as low as 33% of the European-required levels. The REWE Group has introduced their own Pro Planet label which aims to reduce residues to a minimum for major fruit and vegetable categories such as apples, bananas and pineapple. There is a growing interest in Germany for ‘chem-free’ products, which means no traceable MRLs. As a supplier to Germany, this means you have to control your production process very precisely.

GLOBALG.A.P. and HACCP are a pre-condition

Since food safety is a top priority, GLOBALG.A.P. certification for cultivation and a HACCP-based food management system (for example IFS) for product handling or processing are the minimum standards to sell fresh fruit and vegetables in Germany. You must adapt these systems and maintain traceability throughout the chain, from cultivation to packing houses and logistical providers. This is also the case for products that are re-exported to Germany from other European countries.

Focus on sustainable and social compliance

Besides food safety and traceability, ethical sourcing and sustainability are key growing issues in  Germany’s supply chain of fresh produce. Common standards are the Business Social Compliance Initiative (BSCI) and the GLOBALG.A.P. Risk Assessment on Social Practice (GRASP).

GRASP is relatively uncomplicated to obtain and increasingly important to retailers in Germany, since it addresses social risks regarding the value chain of fresh products and can strengthen their producers’ and retailers’ Corporate Social Responsibility (CSR) policy. If you are not GRASP certified, make sure you comply at least with the guidelines of BSCI.

Fairtrade and Rainforest Alliance are also known in Germany, but usually only found in large supply chains of major fruits such as bananas and pineapples. The German based Naturland has also developed its own fair certification: Naturland Fair.

Requirements and labels for organic produce

Most organic produce in Germany comes from within Europe, but the growing demand also creates opportunities for non-European growers. You must be able to produce according to strict European and German standards. For German organic farmers and consumers, organic is a lifestyle which they take very seriously: Organic is organic, there is no in-between and no room for discussion. Traders and wholesalers are particularly strict about the rules. Retailers strive for long-term partnerships to ensure the availability and the required quality specifications.

Organic products in German markets are recognisable by the following labels:

• European organic
• Bio-Siegel (the German equivalent of European organic)
• Naturland
• Bioland (mainly local)
• Demeter for biodynamic products

The Bio-Siegel label can be used together with the European organic logo for organic food, but to do so you must also register your product with the Bio-Siegel Information Service before placing it on the market. When your buyer requires a German label such as Naturland, be aware that their organic standards are higher than the European ones.

Avoiding waste in retail packaging

The new German Packaging Law will come into effect on 1 January 2019. The law sets increased recycling targets for different packaging materials mandates all businesses that sell consumer packaged products to register with the central packaging registry. In most cases this will be the responsibility of your importer.

These businesses must also apply for a licence with a so-called dual disposal system such as the ‘Green Dot’ system (Der Grüne Punkt) to ensure that packaging material will be recycled in a controlled facility. The Green Dot label is found on virtually all packaging material in Germany, so it will very difficult to market a pre-packaged product without it.

For exporters, it is important to understand the consequences of the stricter packaging regulation, such as the increasing pressure on your buyer to use sustainable packaging. When you distribute pre-packaged fruit or vegetables in Germany, check if the registration requirements apply to your business.

7. What competition will you be facing on the German fruit and vegetable market?

Germany is a net importer of fresh products

The competition of German producers is strong during specific seasons and only for some products that are also sourced in developing countries such as strawberries, asparagus, plums and apples.

The most commonly cultivated products are carrots, cabbages, onions and apples (see figure 4). Besides these major products, there is also competing production in smaller categories such as:

• berries (30–40 thousand tonnes, mainly blueberries and currants)
• plums (30–60 thousand tonnes, damsons, mirabelle plums, greengages)
• cherries (25–50 thousand tonnes, mainly sweet)

However, the national production is not sufficient to fulfil all of the demand, which makes Germany a net importer of practically all fruits and vegetables, except for potatoes. This means Germany is one of the main destination countries you should consider for your products in Europe.

The Netherlands and Spain are Germany’s largest suppliers

In general, the German fresh sector favours supply from local or nearby producers. The three principle trading partners are Spain, the Netherlands and Italy.

• Spain is the productive back garden for many northern European countries. Germany is the leading buyer of citrus, berries, sweet pepper and tomatoes from Spain.
• Italy has a similar role as Spain’s and supplies Germany with mainly apples and grapes.
• The Netherlands also exports fresh products to Germany, especially vegetables such as tomatoes, sweet peppers and onions, but it also has a much more logistical and commercial role in the supply and re-export of products overseas.

Overseas imports are mainly focused on tropical fruit and supply windows when production in Europe is low. The largest non-European suppliers are:

• Colombia, mainly thanks to the banana trade complemented by exotic fruit and a growing volume of avocados.
• Costa Rica mainly exports bananas and pineapples to Germany.
• Turkey is in the German market with stone fruit, grapes and figs.

To supply to Germany directly, you must comply with the high standards and have excellent infrastructure, reliability and quality packing. If you’re not supplying directly, consider using trade hubs such as the Netherlands or Belgium, where traders are knowledgeable about which fruits are suitable for the German market and they can also redirect your product to other markets.

8. Which trade channels can you use to put fresh fruits and vegetables on the German market?

Concentration in retail

The German retail landscape is saturated and highly consolidated, so profit margins are constantly under pressure. Only four large food retail groups have 60% of the market. Most of the fresh sales, around 40%, take place in the discounter supermarkets. These discounter formulas of mostly German origin also have success in many other European markets.

Although trade channels are becoming more direct in Europe, German retailers only import fresh fruits and vegetables in very large volumes. The remainder is purchased from a selection of specialized importers and distributors also known as service providers.

The companies that participate in retail supply programmes are often large and offer a range of pre-packaged products and solutions. They prefer working with medium or large, well-organised suppliers that are able to work efficiently and comply with the strict requirements. Smaller suppliers tend to be more specialised.

Source: Lebensmittelzeitung

Specialized and independent shops

On the other side of the discounter spectrum are independent stores, ethnic shops and organic food retailers. Organic food retailers include (witurnover data by Handelsdaten):

• Alnatura (Super Natur Markt), retailer and wholesaler (€423 million net turnover in 2017)
• Dennree (Denn’s), retailer and wholesaler (€270 million)
• Basic bio (€135 million)
• Bio Company (€157 million)
• Ebl Naturkost (€77 million)
• Super Bio Markt (€60 million)

Most Germans (55%) prefer to shop at supermarkets and discounters, but a large number of consumers is also content to shop at week markets (43%) and independent specialty stores (38%). Online sales are lagging behind.

This indicates the existence of a large market to sell to through wholesalers and specialized importers. Buyers at wholesale markets are street market vendors (40%), retailers (34%) and restaurants (26%).

9. What are the price levels for fresh fruit and vegetables in Germany?

According to Eurostat the prices of fresh fruit and vegetables in Germany are 15% above the European average, which is still quite acceptable for Northern Europe.

As an exporter, you have to be aware that there is not always a direct relation between trade prices and consumer prices.

Find market data and trade price information at the website of the Federal Office for Agriculture and Food (BLE)

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