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Germany Food and Drink Report Q2 2012 Published : March 2012

No. of Pages : 109

Price: US$530

The ever-deepening eurozone debt crisis is proving a major challenge to Germany’s economic growth model. Further escalation of the crisis, which could see a sovereign or a financial institution default, may tip the balance and result in a major recession in Europe’s biggest economy, which almost certainly would drag global growth into recession as well. For the time being we continue to hold to our ‘muddlethrough’ scenario for the eurozone despite acknowledging enormous risks of a break-up of the European monetary union. Somewhat more encouraging for Germany’s longer-term growth outlook is the improvement witnessed in the domestic demand picture. Key to the improved performance of German households has been the continued decline in the unemployment rate, which fell to a post-reunification low of 6.8% in December 2011.

Headline Industry Data (local currency) 2012 per capita food consumption = +2.5%; forecast to 2016 = +15.5% 2012 alcoholic drink sales = 0.8%; forecast to 2016 = +3.6% 2012 soft drink sales = +2.8% ; forecast to 2016 = +15.6% 2012 mass grocery retail sales = +4.5%; forecast to 2016 = +28.4% Key Company Trends Competition In German Ice Cream Heating Up: In early 2012 there were signs of increased competitive activity in Germany’s ice cream sector. The country’s largest dairy, DMK, announced that its ice cream unit would now operate as a standalone unit to be named DMK Eis. The firm said the move would allow it to innovate more quickly, with faster decision making and increased flexibility. DMK earlier had failed to acquire local rival Durigon after talks broke down. Durigon was subsequently acquired in November 2011 by UK-based ice cream maker R&R, which has been expanding aggressively across Western Europe. German Wine Sector Needs To Consolidate To Compete: In December 2011, two German wine cooperatives, Deutsches Weintor and Niederkirchener Weinmacher, completed a merger to become the largest wine cooperative in the Pfalz region of Germany. The two groups have been cooperating in areas such as bottling and purchasing and will now be fully integrated after the deal was overwhelmingly approved by the groups’ members. The move creates a firm with revenues of around EUR35mn and can be seen as a reaction to the highly competitive nature of the German market, where sales are growing but price sensitivity is high. The combined group has highlighted the potential within the German market through increasing distribution while also underlining the export opportunities that exist for the increasingly well-regarded German wine sector. Key Risks To Outlook Eurozone Uncertainty: We caution that a sharper deceleration of the global economy and an escalation of the eurozone sovereign debt crisis – potentially resulting in a disorderly default by Greece or the collapse of a major financial institution in Europe – would present substantial downside risks to our growth forecast. Export Competitiveness: A deteriorating global economic outlook and the prospect of major fiscal austerity across Europe in the near-to-medium term could see German exports underperform our current projections. This is a particular risk in light of signs of slowing demand in emerging market economies, such as India and China, upon which German exporters have grown increasingly reliant in recent years.


Germany Food and Drink Market Table of Content BMI Industry View 7 SWOT Analysis . 9 Germany Food Industry SWOT .. 9 Germany Drink Industry SWOT ... 10 Germany Mass Grocery Retail Industry SWOT ... 11 Business Environment .. 12 BMI’s Core Global Industry Views ... 12 Table: Agricultural Commodity Prices 14 Table: Core Views Q212 .. 23 Western Europe Risk/Reward Ratings .. 24 UK And Germany Top BMI’s Western Europe Risk/Reward Ratings .. 24 Table: Western Europe Food & Drink Risk/Reward Ratings Q212 . 26 Germany Food & Drink Business Environment Rating 27 Macroeconomic Outlook ... 28 Table: GDP By Expenditure 31 Industry Forecast Scenario ... 32 Consumer Outlook 32 Food.. 33 Food Consumption ... 33 Table: Food Consumption Indicators – Historical Data & Forecasts . 34 Confectionery... 34 Table: Confectionery Value/Volume Sales – Historical Data & Forecasts .. 34 Prepared Food . 35 Table: Frozen Fruit & Vegetables ... 36 Table: Snack Foods . 37 Table: Pasta . 41 Table: Dairy 42 Table: Meat . 46 Table: Fish ... 48 Table: Oils & Fats ... 50 Drink . 55 Soft Drinks And Bottled Water . 55 Table: Soft Drink Value Sales – Historical Data & Forecasts . 55 Alcoholic Drinks .. 56 Table: Alcoholic Drink Value/Volume Sales – Historical Data & Forecasts ... 58 Hot Drinks ... 58 Table: Hot Drinks Value Sales – Historical Data & Forecasts 59 Mass Grocery Retail . 60 Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts . 60 Trade 61 Table: Food & Drink Trade Balance – Historical Data & Forecasts .. 61 Food . 62 Key Industry Trends And Developments ... 62 Competition In Ice Cream Heating Up 62 Halloren Looking Outside Of Germany For Chocolate Growth .. 63 Convenience Hits The Spot .. 64 Organic Food Receives Boost After Dioxin Food Scandal .. 65 Arla’s International Ambitions Come To Fruition With Hansa-Milch . 65 DMK Urges Further Dairy Sector Consolidation 66 Katjes Looking For Stronger International Growth . 67 Bakeries Hit Hard Times . 68 Dr Oetker Sells Onken Brand .. 69


Market Overview .. 69 Food Sector . 69 Organics .. 70 Dairy 71 Drink 73 Key Industry Trends And Developments ... 73 Wine Sector Needs To Consolidate To Compete .. 73 Consolidation Moves In Soft Drinks 74 Carlsberg Sells German Brewery, Further Consolidation Likely 75 Merit Of Coca-Cola Enterprises Expanding 76 Winemakers Eye Asian Markets ... 78 Market Overview .. 78 Soft Drinks ... 78 Alcoholic Drinks .. 79 Mass Grocery Retail ... 80 Key Industry Trends And Developments ... 80 Metro CEO Bows to Pressure; More Radical Reorganisation Needed 80 Tengelmann Distances Itself From A&P In US 81 Grocery Retail Competition Probe Launched .. 82 Expansion Across Sectors To Hedge Bets 82 Market Overview .. 83 Table: Structure Of Germany’s Mass Grocery Retail Market – Estimated Number Of Outlets ... 84 Table: Structure Of Germany’s Mass Grocery Retail Market – Sales Format By Value (US$bn) ... 85 Table: Structure Of Germany’s Mass Grocery Retail Market – Sales Format By Value (EURmn) . 85 Table: Annual Average Sales Per Outlet By Format – 2009 85 Competitive Landscape . 86 Table: Key Players in Germany’s Food Sector 86 Table: Key Players in Germany’s Drink Sector ... 88 Table: Key Players In Germany’s Mass Grocery Retail Sector ... 89 Company Monitor ... 91 Food.. 91 Oetker Group ... 91 DMK 93 Haribo . 95 Lieken Group ... 96 Drink . 97 Emig GmbH & Co KG (GerberEmig Group) ... 97 Radeberger Group (Oetker Group).. 98 Anheuser-Busch InBev Germany . 99 Mass Grocery Retail 100 Lidl Group ..100 Rewe Group 101 BMI Methodology . 103 Risk/Reward Ratings Methodology 103 Table: Rewards ...103 Table: Risks 104 Weighting .104 Table: Weighting 104 BMI Food & Drink Industry Glossary . 105 Food & Drink ..105 Mass Grocery Retail 105 BMI Food & Drink Forecasting & Sourcing ... 107 How We Generate Our Industry Forecasts ..107 Sourcing ..108


Germany Food and Drink