THE GERMAN GOURMET MARKET
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1 THE GERMAN GOURMET MARKET January 2015 Prepared by Bart Vandeputte Economic & Commercial Counsellor Germany Contacts : cologne@brusselsinvestexport.com
2 Cologne, January 2015 based on interviews during a mini-seminar in Brussels in june 2014, on the German gourmet market and on a sector study written the same year, by Laurent Boll, BYEP BIE. Over 50% of our German neighbours buy their food at discount supermarkets of which Aldi and Lidl are the most famous. Other food supermarket chains do have premium product segments but if you are a real gourmet what a small percentage of the Germans is you buy your exquisite food products at a fine food specialist. It is the kind of independent shop which only sells the best. Often they started as butcher s shops in affluent neighbourhoods which evolved into fine food shops. Most of them are still owner operated and some of the products such as pâtés may be made in house or bought in from specialised artisans who still produce on a human scale, with love and passion. The development of the German food market, more specifically the gourmet food market, has known trends in various directions. After the discount-trend that has started in (Geiz ist Geil), the German consumers are now re-estimating premium products of recognized origin. Since 2004 a clear increase in Konsumfreude (appetite for consuming) resulted in a growing demand for gourmet products. The audiovisual media have done their part to help German consumers appreciate good and genuine food. Considerable amounts of new small scale manufacturers have entered the market, often people with a real passion for food. Also worth knowing is the sometimes young age of consumers of high end products and secondly the re-invention of the so called Tante Emmaladen, the mini street corner grocery from a bygone era. These shops now increasingly focus on quality and handcraft, often combined with organic produce. If you are a producer and you want to export your fine food to Germany you definitely do not want to exhibit at ANUGA, Germany s famous international food fair which takes place in Cologne every second year. Even though premium products are offered, there is no such thing as a Hall of famous products. Professional buyers who visit the fair will be too mainstream. In other words, ANUGA is not your cup of blended tea. The good news is that there is a small association of gourmet shops. It is called Corpus Culinario, a name which speaks for itself. Corpus Culinario is currently in the course of a major overhaul due to the fact that some years ago the Uhlenbusch family, themselves being owners of a gourmet shop, took over the management of the association. Eversince the Corpus Culinario concept has been adjourned and dynamized and membership grew from 50 to70. Corpus Culinario aims to serve the interests of its members in the broadest sense, i.a. by sharing best practices and offering a valuable network of contacts. Moreover it organizes on an annual basis the Genuss Gipfel, the one of a kind trade fair for gourmet retailers in Germany. Genuss Gipfel offers room for 5-10 exhibitors from Belgium which should be manufacturers of gourmet products, on a total of about 80 exhibitors.
3 The Genuss Gipfel attrachts about 700 professional visitors. As it is the reference event for handcrafted gourmet in Germany, virtually all of Corpus Culinario s members visit it. The fact that it is relatively small sized, brings along a more personal atmosphere and makes it easier to meet new business partners than massive events like Anuga. Next edition of the Genuss Gipfel will be on april 20 th 2015 in Bad Kissingen (in the north of Bavaria). It will receive great attention from members and fine food manufacturing companies that will expose. It is recommendable for all exhibitors to be on board on time, as many of the approximately 80 exhibitor booths will be booked in short time. The evening before the day of the actual fair, a dinner for all participants is organized. This offers a good opportunity to make first acquaintances in an informal setting, which can then be elaborated/concretized on the trade show floor the next day. A booth will cost 650 Euros and also offers a good platform for first activities on the German gourmet market. During Genuss Gipfel the product of the year award will be granted to a manufactured product. Being Awarded product of the year is an extra boost for your sales. In order to be candidate, the producing company must be associated member (Förderer) of Corpus Culinario, which is not a condition for being exhibitor at the Genuss Gipfel. Regarding the topic of choosing the right channel to market gourmet products in Germany, Mrs. Uhlenbusch stated that working with German distributors has several major setbacks. Apart from taking very high margins compared to other countries (30 up to even 50 %) they are not always the best partners in terms of quality of services delivered. Wilk, owner and MD of the WILK GOURMET GROUP, one of the major distributors in this field, seems to be a good partner and is particularly fair towards clients. They had less good experiences with a major collegue of his. Distributors in the organic market would offer overall a better deal, if your product is in this segment. As an alternative for a distributor Mrs. Uhlenbusch mentioned that it may be worth working with a logistics company. They offer central stocking facility with picking and transportation services to retailers all over the country. They will work on demand based on individual orders by means of a dispatching system. Mr. and Mrs. Uhlenbusch might at some point extend their activities into distribution. Working with package shipment of products and taking around 20% margin, they may be able to do a more competitive job. We also had the opportunity to talk with Frank Wilk of the aforementionned Wilk Gourmet Group. Mr Wilk talked about the origins and nature of the business of the Wilk company. Frank Wilk continued the activities started by his parents in They initially started working with the best Italian handcrafted gourmet products. Later the assortment was notably extended into chocolate (Valrhona) and into sweet bakery gourmet products, also from other countries. Learning from experiences on the German gourmet market, Wilk decided to position himself as an exclusive supplier of independent high-end gourmet shops. Approximately 2000 companies are currently clients of Wilk, among which most are gourmet and lifestyle retail shops, but also e.g. hotel roomservice operators. Concerning
4 the manufacturers, Wilk has a clear preference for working with smaller family-run handcraft businesses. They do not sell to the Lebensmittel Einzelhandel (LEH), which is the indication of large supermarket chains nor with larger gourmet shop chains such as Perfetto (Karstadt) and Kaufhof Gourmet Markt. Internet marketing is a topic that is treated with great sensibility. Wilk does not supply any shop that markets via the internet. If so, it should be a well defined concept that does not risk to harm the image of the product or the other sales channels (shops). It explicitly excludes internet traders such as Amazon. Wilk successfully introduced the campaign Bye Bye to VE (VerpackungsEinheit = minimum order quantity for clients). With a flexible logistics in stock and product picking, it offers retailers the possibility to order single units of specific product packages if the entire value of the order reaches 150 Euros. As gourmet shops often want to offer less units of a broader range of products (and avoid unnecessary stocks), this regime offers them to make more frequent but less big orders. Competition reacted with discounts for larger quantities but cannot offer the same flexibility as Wilk to date. There is one other major wholesalers in the gourmet food sector: Viani. Originally importing Italian delicacies, Viani now offers a wide range of gourmet products from various countries and regions, preferably handcrafted products of small-scale regional food manufacturers. We did not have the opportunity to interview a representative of this company. Some of our Belgian producers of fine food work through them. Finally, we spoke to Hans Pauwels, Owner and MD of Debailleul, pâtissier noble. With notable export experience on the German market, Mr Pauwels emphasized the relevance of targeting Germany as an export country. Although it may often take a healthy portion of patience to find the right business partners, it is well worth to insist on Germany. German traders often take their time to make the right decision, but this inconvenience pays back in the long run. Once inside, business relations are envisaged for the long term. All under the crucial condition that you deliver what has been agreed/promised. Delivering the exact quantity within the agreed time frame is interpreted to the letter, rather than to the spirit. Regarding the shape of the German gourmet market, the country counts around 3 million households with a monthly income over 10K Euros. This market segment is already larger than the entire Belgian consumer market. In order to be successful in Germany, rather than being a luxury product, it should be fitting a niche. The German gourmet consumer looks for real quality, premium ingredients and craftsmanship instead of a label or lifestyle. This however does not mean that a product does not need a proper look and image, as it will need to be sold in the first place to a public that is not familiar with it. The Genuss Gipfel of Corpus Culinario is a must for newcomers, according to Mr. Pauwels. It offers a high quality segmented market audience, at an affordable price. It is advised that companies put their act together when exhibiting, as promises to interested clients must be met.
5 An important issue concerns the packaging. The general look, colors, graphics etc. are to be carefully studied regarding the product s ability to convince German consumers. The wrapping should mention who is the German importer (in case of direct delivery to e.g. a supermarket (chain)). This is mandatory for product liability claims. Consumers should submit a claim with the importer who is liable towards the consumer for damages. Furthermore the Grüner Punkt recycling mark may only be used if the producer or importer contributes to the national recycling scheme. The product will be either subject to high penalties or be taken entirely off the market if the recycling mark is used without contribution to the scheme. More detailed information can be obtained through the local Chambers of Commerce and Industrie (IHK). If you consider selling your fine foodstuff to Germany, come and talk to us. Bart Vandeputte, Economic and Commercial Attaché Belgian Consulate General in Cologne
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