Foodservice Profile – Germany

Germany macro-economic profile and consumer foodservice trends

In 2022, Germany's population will hit an all-time high of 84.3 million, after stagnating over the previous three years. This increase has been accentuated by the arrival in Germany of refugees fleeing the war in Ukraine. Germany's total population was 83,29 million people in 2022, representing a CAGR of +0.2% (2017 to 2022). Germany's total population is expected to slow down between 2022 and 2027 with a CAGR of −0.002%% from 83,36 million people in 2023 to reach approximately 83,28 million by 2027.

In 2022, total consumer per capita expenditure (PCE) on personal goods and services in the German domestic market reached US$ 303,595.2. German consumers spent a total PCE of 67.5% (US$ 204,815.0) in the food category, followed by 10.3% (US$31,337.9) in alcoholic drinks, and 9.6% (US$29,092.4) on non-alcoholic beverages. Despite the pandemic in 2019, PCE on foodservice never stopped growing. CAGR for each category is remarkable, with the highest being for non-alcoholic beverages.

The German foodservice market

In 2022, Germany's consumer foodservice food and beverage sales totalled US$289,914.4 million using year-over-year (y-o-y) exchange rates. Between 2017 and 2022, foodservice sales increased by a CAGR of 1.7%, despite the slight drop between 2019 and 2020 due to the beginning of the COVID outbreak (2020/2019). . Both food and drink foodservice categories are expected to register moderate growth over the forecast period by a CAGR of 3.7% (2022-2027) to reach a foodservice sales value of US$348,478.4 million by 2027.

In Germany, standalone foodservice outlets accounted for 83.9%of sales (US$43,826.6 million) in 2022, followed by 5.3% in lodging (US$1,518.4 million), 3.8% in travel ( US$1,665.4), 3.5% in leisure (US1,518.4$), and 3.5% in retail (US$1,516.4 million). Retail outlets registered the highest growth between 2017 and 2022 at a CAGR of 0.3%, while leisure locations reported the highest decline (−9.9%) over this period. Over the forecast period (2022-2027), all foodservice channels are expected to report higher CAGRs with travel (6.1%), leisure (5.9%), and lodging (6.1%) recovering the most.

Germany's largest foodservice channel in terms of sales were from within LSRs at a total registered value of US$17,240.2 million 40.0%) in 2022. Within this channel over last year, Burger LSRs accounted for 35.8% of sales, compared to Middle Eastern LSRs (20.8%), Bakery Products LSRs (9.6%), and pizza FSRs (8.9%). Other smaller FSRs found in Germany were Convenience Stores (6.6%),Ice cream (2.0%), Asian (1.9%), Chicken (1.7%) restaurants in 2022.

In Germany, sales in FSRs were the 2nd largest channel at a value of US$17,012.9 million in 2022. Top FSR foodservice channels were from within European FSRs (51.1%), followed by pizza FSRs (17.1%), Middle Eastern FSRs (15.1%), Asian FSRs (8.9%), Latin American FSRs (3.9%), and North American FSRs (2.2%).

In 2022, other German foodservice outlets by type consisted of Street Stalls / kiosks at a sales value of US1,403.9 million and Cafés / bars (US$6,397.9 million). Sales from bars or pubs (with a CAGR of −5.8%) suffered the most over the 2019 and 2020 period.

Foodservice sales: chained franchises versus independent operators

In 2022, independent operators (67.0%) were the largest foodservice providers over chained franchises (33.0%) in Germany with value sales of US$29,369.0 million and US$14,457.6 million, respectively. However, chained franchises remained more stable during the pandemic at a CAGR of 1.3%, compared to independent operators.

Sales within independent operators are forecast to recover in sales at a rate of 7.3%, and chained franchises are also expected to grow by 7.3% in value (2022-2027).

In 2022, Germany's chained franchises of LSRs registered the largest sales at a total of US$10,598.6 million, followed by sales in FSRs (US$1,281.3 million), Cafés / bars (US$1,076.8 million), and Street Stalls / kiosks (US$95.9 million). During the pandemic (2019-2022), these chained LSR sub-categories that showed the highest period growth (most likely due to the addition of food delivery options) were from within LSRs that served burgers (56.9%), bakery products (12.7%), convenience stores (10.7%) and pizzas (8.5%). All other chained foodservice categories, registered a decline to a lower growth over the same period; at the exception of pizza LSRs (with a CAGR of 12.4%). Nevertheless, all chained foodservice outlets are forecast to recover and report positive growth between 2022 and 2027.

German independent operators of FSRs was the largest foodservice segment at sales of US$15,731.6 million, followed by sales in LSRs (US$6,641.6 million), Cafés / bars (US$5,321.2 million), and Street Stalls / kiosks (US$ 1,308.0 million) in 2022. Those independent foodservice categories that adjusted well during the pandemic and that showed the highest period growth (2019-2022) were independent LSRs serving pizzas (1.4%), middle eastern restaurants (1.2%), bakery products (1.1%), burger (1.1%), and Asian restaurants (0.3%) . The categories that didn't reach pre-pandemic values were independent Ice cream LSRs (−1.0%), independent cafe/bars (−4.7%), and independent FSRs (−2.4%). All independent operator foodservice outlets are forecast to recover with positive growths between 2022 and 2027.

Foodservice: Eat-in versus delivery and to-go sales

Total sector home delivery services at sales of US$4,910.5 million (+13.3%) and takeaway at US$9,672.1 million (+6.3%) in Germany have managed to exceed pre-pandemic sales in 2022. Conversely, total sector eat-in services (−7.1%) have registered a loss over this period reaching sales of US$25,406.6 million in 2022 from sales of US$36,6775 million in 2019.

German FSRs with eat-in services registered the highest sales at US$17,012.9 million, accounting for a market share of 42.5% of total sales, followed by eat-in services from LSRs at US$7,504.7 million (18.8%), LSRs: takeaway services at US$4,859.6 million (12.2%) in 2022. Channel categories by service type that experienced higher growth rates over the pandemic (2019-2022) were takeaway LSRs at sales of US$4,221.3 million (+20.4%), home delivery Cafés / bars at US$159.9 million (+15.0%), and home delivery LSRs at US$2,810.1 million (+13.3%) in 2022. Between 2022 and 2027, all channels by various service types are expected to register moderate growth, at the exception of takeaway FSRs.

Foodservice sales: Offline retail versus online

In Germany, offline retail (in-person) foodservice sales totaled US$37,243.9 million (85.2%) versus online sales of US$4,810.9 million (14.8%) in 2022. E-commerce sales accounted for 57.7% share from within German LSRs, followed by FSRs (36.1.8%), Cafés / bars (5.9%), and Street Stalls / kiosks (0.4%) over the year. Since the beginning of the pandemic, growth in online sales occurred in all categories, registering positive CAGRs respectively in Cafés / bars (12.3%), LSRs (23.3%), FSRs (25.0%), and Street Stalls / kiosks (25.3%) between 2019 and 2022. Conversely, offline retail foodservice sales declined over this same period in all categories, registering losses respectively in FSRs (−9.2%), LSRs (−1.7%), Cafés / bars (−11.7%), and Street Stalls / kiosks (−1.1%). Overall online foodservice sales are forecast to grow at a CAGR of 5.5% (2022-2027), to reach US$ 4,647.3 million (9.1%) in 2027.

Competitive landscape in Germany

In 2022, Germany's top foodservice company was McDonald's Corp with value sales of US$4,730.4 million for its McDonald's brand, representing a 10.8% share of the foodservice market. The chained Restaurant Brands International Inc (brands: Burger King) was the second largest foodservice company with value sales of US$1,143.4 million (share: 2.6%), followed by Domino's Pizza Inc with US$459.0 million (brand: Domino's Pizza, share: 1.0%), Inter IKEA Systems BV at US$332.2 million (Ikea Restaurant, 0.8%), and Doctor's Associates Inc at US$308.0 million (Subway, 0.7%) in 2022. These top five companies only accounted for 15.9% of the total foodservice market in Germany.

Opportunities for Canada

Subsectors of interest

With 82.4 million people, Germany is the largest country in the European Union (EU). It ranks in the top 20 countries in terms of global gross domestic product per capita, making it one of the richest countries in the world. Doing business in Germany provides access not only to this wealthy single market, but to the largest world-wide trade bloc.

In 2022, Germany was the 3rd largest importer of agri-food and seafood from the world at US$128 billion and held a trade deficit of US$28.1 billion in the sector. The top five suppliers to the country were the Netherlands, Poland, Italy, France, and Spain, representing US$60 billion or 46.9% of total imports. Canada was Germany's 51st largest source for agri-food and seafood products, holding a 0.2% share at a value of US$281 million in 2022.

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Resources

• Euromonitor International, 2023

Foodservice Profile – Germany
Global Analysis Report

Prepared by: Elodie Radanielina, student

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