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News : EU Economy Last Updated: Oct 22, 2009 - 12:02:49 PM


Germany's Food & Beverage sector star of crisis -- exports up 15% in 2008; Good news continues
By Michael Hennigan, Founder and Editor of Finfacts
Oct 20, 2009 - 2:14:05 AM

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Germany's Food & Beverage sector is a star of the crisis with exports rising 15% in 2008 and the good news continuing into 2009. The Dairy sub-sector launches about 300 new products annually.

The Ifo Institute at the University of Munich, said on Monday that of the five largest German industry sectors, the F&B industry has fared the best in the financial and economic crisis. Both production and market data show stable figures for the first half of 2009. Some sub-sectors even achieved growth.

The atmosphere is correspondingly positive in the sector’s businesses. The Ifo Economic Survey in manufacturing shows that the business climate in the sector has improved since August 2009. Producers have reported increasing demand and larger order stocks. Sales opportunities on markets outside Germany have been assessed as favourable.

Ifo said that in the past two years, exports provided a considerable boost to the German industry. In 2007 for the first time, Germany - - traditionally an agricultural importer - - achieved a balance in trade in agricultural and food/drink products, and in 2008 the first trade surplus was achieved.

Also for the first seven months of 2009, the positive news predominates. Exports increased by 0.7% in terms of volume.

While in particular the meat, dairy and confectionery manufacturers reported very good business, the contraction process in the brewery sector continued. In the first half of 2009, 2.3 million hectolitres of beer were consumed in Germany, 4.5% less than for the same period of the previous year. In particular the large breweries suffered losses.

Ifo says the drop in beer consumption has been offset by a rise in mineral water consumption.

Per-capita consumption in 2008 amounted to more than 140 litres, nearly 50 litres more than 10 years ago.

The industry in numbers:

  • Europe's second largest food producer with turnover of €155 billion in 2008 (+5.6% over 2007)
  • 15.0% increase in 2008 exports reaching €42.4 billion in value
  • Export ratio rises from 17% in 1998 to 27.4% in 2008
  • The sector comprises 5,800 companies, employing around 530,000 people
  • More than €4 billion in domestic investments
  • Major national and international players
  • Largest sector sub-segments in 2008: meat (21.6%), dairy (17.2%), alcoholic beverages (9.0%), and confectionery food (8.5%).

The State agency Germany Trade & Invest says the dairy industry is one of Germany’s most innovative domestic food and beverage industry sectors, with its excellent R&D infrastructure bringing 300 new products to market on a yearly basis. With a total market value of €25.4 billion, more than 37,000 workers at around 100 German companies make the German dairy industry the country’s second largest food and beverage sector.

Annual cheese production volume of 1.7 million tons makes Germany Europe’s largest cheese producer; ahead of both France (1.4 million tons) and Italy (0.9 million tons).

It should be noted that domestic value added is usually high in food and beverage production.

In Ireland, Finfacts has highlighted the overreliance of innovation policy on university high tech and bio technology research while an F&B sector, in need of restructuring and largely dependent on the UK market, is operating below par, is not playing to our potential  - - see link to article below.

Germany Trade & Invest: Industry Overview - Food & Beverage Industry

Ifo report in German

SEE: Finfacts article Sept 26, 2009: Ireland: A "smart" economy in food better than pie-in-the-sky aspirations?

SEE: Finfacts article Oct 14, 2009: Global Irish Economic Forum and branding Ireland: Green Party minister Eamon Ryan is both for and against science

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