Entering the German fresh fruit and vegetables market

Germany is a demanding market. Consumers are very price driven, but they also want the best quality and sustainability standards. Food safety standards are stricter than the European and German law. Certification is the most important proof of compliance, and it is expected to become more important. The leading end-market segments for fresh produce in Germany are retailers and discounters. Importers are the best channel to enter this segment. Suppliers from developing countries face competition from locally grown products and other suppliers from developing countries.

1. What requirements and certification must fresh fruit and vegetables comply with to be allowed on the German market?

Germany follows the European Union (EU) legal standards and requirements. This includes mandatory requirements regarding tariffs, quotas, packaging, labelling, food safety and sustainability. For some topics, such as food safety, quality and sustainability standards, German buyers have stricter requirements than general legislation and other European markets. 

What are mandatory requirements?

Stricter requirements than the law

The Federal Office of Consumer Protection and Food Safety (BVL) is the national body that grants authorisations and runs monitoring programmes with the Federal States, or ‘Bundesländern’, in Germany. It is responsible for the official food control and inspection.

Fresh fruit and vegetables for the German market must comply with the EU’s legal food safety requirements at least. The use of plant protection and post-harvest treatment products cannot exceed the limits established by European legislation. You must provide residue analyses to show you are meeting these standards, but buyers may perform analyses as well. Analyses must be carried out by accredited laboratories. Several German buyers prefer QS-approved laboratories. 

Many suppliers from developing countries have problems complying with the strict maximum residue levels (MRLs) set by German retailers. LIDL and Kaufland (part of Schwarz Gruppe) have the strictest customer requirements. Their MRLs cannot be more than 33.3% of the European permitted levels. To see this in perspective, this percentage is 50% for REWE and 70% for ALDI.

Green deal

In 2020, the European Union implemented a set of policies and actions called the European Green Deal. Its aim is to make the European economy more sustainable and climate neutral by 2050. The plan also includes a 50% reduction in the use of pesticides and an increase of the amount of land used for organic farming to 25% by 2030. This means that many pesticides will be banned, and residue levels will decrease slowly in the coming years. When supplying the German market, you must make sure your product is in line with changing regulations. German buyers are known for their strict enforcement of residue levels. 

Compliance with marketing standards 

The Federal Office for Agriculture and Food (BLE) controls the compliance with marketing standards in Germany. This is also the competent authority for monitoring imports from third countries (Figure 1).

Figure 1: The German Fruit and Vegetables Market – Quality through Inspection

The German due diligence legislation

In January 2023, the German Act on Due Diligence in Supply Chains (LkSG), also known as the new Supply Chain Act, entered into force. Certification plays an important role for affected German companies. Certification is expected to continue to grow in importance as this is how German companies affected by the legislation show compliance. 

The German Supply Chain Act requires companies with a workforce of at least 3,000 and later companies with a workforce of at least 1,000 to ensure compliance with human rights along their entire supply chain. Although the duty of care only applies to the company’s business areas and their direct suppliers, companies must act if they have knowledge about human rights violations among their indirect suppliers. 

As part of the legislation’s implementation process, many German importers include a commitment to provide requested information and reports within a certain period (two or three weeks) in their supplier declarations. They also include recommendations to their suppliers to ensure the implementation of measures to avoid the violation of human rights. These are the first steps, but you can expect stricter control overall in the near future.

Documentation

For German buyers, it is very important to back up what you say you have with corresponding documentation. The most important documents that German buyers ask from their suppliers before doing business are listed below. These requirements are often asked for by buyers supplying supermarkets and with strict end-market segments. The documentation in the spot market might be simpler.

• Copy of your certificates 
• Quality specifications 
• Laboratory analysis
• Traceability procedures 
• Detailed field information 
• Spray records detailing which inputs were used in what quantities
• Signed supplier declaration 
• Supplier questionnaire 

If you are asked to fill in a supplier questionnaire, take the time to answer it and deliver it on time. This is the first impression that you will leave on the client and the first filter for many of them. It is also how they check if you can be listed as a supplier and if you comply with their requirements. Answering on time will show that you are really interested in doing business with them. 

Some buyers may require product liability insurance, in case of any complaints by end-consumers. Although this is not very common, it is good to find out about this kind of insurance to be prepared. This insurance is most likely to be wanted by importers that supply retailers or if negotiating volumes are high.

Sustainable and recyclable packaging 

The German Packaging Act (VerpackG) came into effect on 1 January 2019. It was last amended in 2021. Under this law, traders are responsible for participating in the recycling of their product packaging. The law sets increased recycling targets for different packaging materials. It also mandates all businesses that sell consumer packaged products to register with the central packaging registry and pay a license fee. In most cases, this will be your importer’s responsibility, but you should be aware of the pressure on buyers to use sustainable packaging.

This pressure comes from legislation and consumers. German consumers consider plastic waste the greatest environmental challenge (see page 52). Supermarkets are trying to reduce the use of plastic packaging. Importers are following this trend by looking for alternative biodegradable packaging options, such as sugar cane. Importers might be interested in co-developing alternatives with you. Figure 2 shows an example of Colombian physalis in sugar cane packaging on the German market.

Figure 2: Physalis for the German market in sugar cane packaging

Source: Dana Chahin 

Note that if you provide packaging made of wood, pulp, bamboo, viscose or cellulose-based fleece, importers might ask for certification, like FSC, Blue Angel or similar. 

Many retailers, such as ALDI South, have commitments to achieve a 100% recyclable packed products target. Importers are also following and setting their own targets. It is common, for example, to ask suppliers to ensure adhesive labels on trays or bags are easy to detach, to not affect the recyclability. 

Price agreements and payment terms

Price agreements and payment terms used by German buyers are similar to those used in the European fresh produce sector. 

1. Minimum guarantee price (MGP): a minimum price is agreed. After arrival, there is an account sales document that shows the final price at which the product was re-sold in Europe. 
2. Fixed price: a fixed price is agreed. There can still be deductions because of food safety or quality rejections. 
3. Open price or by consignment: the market decides the final price at which the product is sold. 

MGPs and fixed price options are often used if your product is going to a supermarket programme. Consignment is often done by large companies or by importers that sell on the spot market. 

German buyers can pay in advance, after arrival (immediately or 30 to 45 days after) or against documents. They can also pay a percentage against documents, based on the MGP or the fixed price. Some buyers are willing to make advance payments to secure a continuous supply in certain seasons. This only happens when suppliers and buyers have already built a trustful and long-term relationship. 

If you are going to work by consignment, you need to assess your risks carefully. It is recommended that you do this with buyers you trust or with buyers you have good references from. In any case, do a risk analysis exercise and evaluate your potential buyers. Export credit companies like Coface can perform a credit evaluation of your potential buyers, and you can secure a part of your shipment with them.

For supplying fresh fruit and vegetables to Germany the Incoterms FOB (Free On Board) and CIF (Cost, Insurance, Freight) are common delivery terms. DDP (Delivered Duty Paid) delivery may be best if you are directly supplying a large retailer or some smaller wholesalers.

What are the requirements for niche markets?

The organic niche market needs to comply with specific requirements in addition to the mandatory and market requirements. 

Organic 

Suppliers of organic products must comply with the European organic legislation according to Regulation (EU) 2018/848. If you produce both organic and conventional products, you need to guarantee strict separation of the products and production lines to avoid contamination. Buyers will ask you for information about the packing process, including the spatial and temporal separation of organic and conventional goods. 

A product label can include the term ‘organic’ and all the derivatives or abbreviations (e.g. ‘bio’ and ‘eco’) only if the product complies with the EU organic production rules. This applies for both products produced in the EU and outside the EU. 

Besides the EU organic logo, Germany also has the organic seal ‘Bio’. This can be used in addition to the EU organic logo. There are other private labels related to organic agriculture that have even stricter or additional requirements. These include Bioland, Demeter and Naturland. Of these three, Demeter offers more opportunities for suppliers from developing countries. Demeter adds an additional level to organic with its biodynamic approach.

Figure 3: Example of a label included in a box of organic limes exported to Europe

Source: courtesy of Bio Agroexport, Colombia

Figure 4: Organic labels on the German market

Source: Ökolandbau.de

2. Through what channels can you get fresh fruit and vegetables on the German market?

How is the end-market segmented?

The German fresh fruit and vegetables market is dominated by discounters (Figure 5). Discounters sell about 50% of all fresh fruit in the fresh fruit market. Supermarkets and hypermarkets have a market share of 41%. Street markets, greengrocers and farm gate sales only account for 5.3% of total fresh fruit sales. 

Source: USDA Product Brief based on data from AMI Marktbilanz Obst, 2022

Discounters

Discounters are the most popular end market to buy fresh fruit and vegetables in Germany. LIDL is the most popular discounter amongst consumers. In 2022, they won the Fruchthandel Magazin Retail Award in the discounter category for the sixth time. LIDL offers around 170 fruit and vegetable articles. German consumers like LIDL’s quality, freshness and price. 

Based on both purchase share among consumers and revenue, the most popular German discounters to buy food from are ALDI, LIDL, Netto Marken-Discount, Penny and Norma. Although discounters are recognised by offering low prices, they distinguish themselves with aspects like high quality, sustainable packaging, regional products and organic products.

Discounters have particularly strict food safety requirements. Their certification requirements are also becoming stricter. Since 1 January 2023, LIDL suppliers of mangoes and avocados have needed Rainforest Alliance certification. Decisions taken by LIDL and ALDI are often followed by other discounters and supermarkets. Thus, preparing to comply with requirements for discounters will allow you to supply other market segments.

Although trade channels are becoming more direct in Europe, German discounters only import fresh fruits and vegetables in very large volumes. The rest is purchased from a selection of specialised importers and distributors that act as service providers. 

Hypermarkets and supermarkets

German supermarkets are the second most important end-market for Germans buying fresh fruit and vegetables. The most popular supermarkets are EDEKA, REWE and Alnatura. Alnatura won the Fruchthandel Magazin Retail Award among supermarkets in 2022. It also won the ‘German Fruit Prize’ in 2022 in the organic fresh fruit and vegetables category. Unlike REWE and EDEKA, which are conventional supermarkets that also sell organic produce, Alnatura is an organic specialised retailer.

Figure 6 shows an EDEKA supermarket in the German city Frankenthal. This supermarket received an award for having the best fresh fruit and vegetables department in Germany. For this award, consumers evaluate criteria like regional produce, assortment, produce presentation, staff recommendations and cleanliness. 

Figure 6: EDEKA supermarket in Frankenthal, Germany

Street markets, greengrocers and farm gate markets

Only a small portion of Germans (5.3%) buy fruit and vegetables from street markets, greengrocers and farm gate markets. There is a nationwide campaign to attract more shoppers to weekly markets, under the slogan ‘Love your local market’. 

Small greengrocers in well-known residential areas also offer a selection of exotic fruits but at higher prices than supermarkets. For example, the price of the pitahaya in Figure 7 was €9.95 per piece. This same fruit was priced €8.99 in the same week at Galeria Markthalle, a high-end supermarket.

Figure 7: Greengrocer in a residential area of Munich, Germany

Source: Dana Chahin

The main buyers of the German wholesale markets are street market vendors and independent retailers like greengrocers. If you want to target this segment, you should look for an importer with a presence in the wholesale market. Keep in mind that street market vendors and independent retailers prefer to offer regional products, so the volumes for this segment might be small compared to other segments.

Online channels

The demand for online shopping is still in its early stages in Germany. Supermarkets like REWE are expanding their presence by selling fresh produce online. The organic retailer Tegut partnered with Amazon Prime to offer an online shopping option to its clients. There are also dedicated online retailers and innovative concepts, such as fruit and vegetable boxes. Examples of online concepts to buy fresh produce online include Bringmeister, Mytime, Amazon Fresh, Freshorado, Stadt Land Frucht, Frische Helden and etepetete. 

These online platforms offer information about the origins of the fruit and vegetables, often with stories about the products. This information is useful for reaching the right market segment. Amazon Fresh, for example, shows Landgard Frischeservice GmbH as the manufacturer contact for their passionfruit from Colombia. Landgard is a producers’ cooperative with several subsidiaries, with Landgard Nord and Landgard Overseas being responsible for sourcing from overseas.

Hotels, restaurants and caterers (HoReCa)

The German foodservice market sales reached €53.6 billion in 2020, despite the strong COVID-19 lockdown measures. Compared to other European markets, Germany experienced the lowest drops. This market includes gastronomy, hotels and caterers. 

The wholesale markets are important suppliers of the foodservice channel. An estimated 26% of the wholesalers’ clients are restaurants and caterers. Other important players supplying the foodservice segment are cash and carry wholesalers, such as Edeka Foodservice and Metro, and food service distributors like Fripa. Most of these players are supplied by specialised importers or wholesalers.

Through what channels does a product end up on the end-market?

The main channels to supply the German market of fresh fruit and vegetables are grower organisations, specialised importers, wholesalers and processors. 

Figure 8: The German value chain of fresh fruit and vegetables 

Which companies are you competing with?

The following companies are examples of successful exporters to the German market of fresh fruit and vegetables and of the competition you will face. 

Montana Fruits, Colombia 

Montana Fruits is a Colombian exporter of avocados, passion fruit and limes. They have their own plantations of passion fruit and partner with small avocado and lime farmers. The company was founded in 2018 and is now a leading supplier to the German and European market. Their fruit is sold in German supermarkets and discounters. 

Montana offers technical assistance to their associated farmers, as well as the chance to observe the packing process. The company has strict quality standards that surpass the basic requirements of its target markets. This, together with the right set of certifications, was key to entering the German market. Montana is GLOBALG.A.P., GRASP, SMETA, BRCGS and Rainforest Alliance certified. The process of obtaining certification was a combination of aligning company philosophy with market demands. 

Montana has a clear sustainability policy embedded in their company strategy. Their actions range from installing beehives around their crops to taking care of their employees (Figure 11).

Figure 11: Montana Fruits Colombia

Which products are you competing with? 

German and European products might compete with your products. In Germany, there is a growing preference for more sustainable and regionally produced fruit and vegetables. Conscious consumers prefer in-season products. For example, when locally produced strawberries or plums are available in abundance, the demand for imported mangoes may be less. Your products will still be in demand off-season although in lower quantities. Origins closer to Europe will be preferred.

As an example, the local German strawberry season extends from mid-May until the beginning of August. Around two thirds of total strawberry purchases of German households take place between these months, with peaks in May and June. Other purchases are distributed throughout the rest of the year in smaller quantities. 

Asparagus are another locally grown product with a strong preference by consumers. There is a strong campaign for German white asparagus, which are in season during the springtime. Germans even introduced a ‘Day of the German Asparagus’ celebrated every year in May to promote consumption.

Table 1 and 2 show the German production quantities of fresh fruit and vegetables. If you offer one of these products, find out about the best time to supply the market. If you offer a tropical or exotic fruit that is not locally or regionally produced, you will experience less direct competition. However, you need to convince consumers that the product they will buy is both environmentally and socially sustainable. Aspects like water use, carbon footprint and social conditions of the producers will set your company apart.

Table 1: German production of fresh fruit, in thousands of tonnes, 2019–2022

Fresh fruit	2019	2020	2021	2022
Apples	992	1,023	1,005	1,034
Strawberries	144	152	131	126
Plums	47	47	40	42
Sweet cherries	45	37	27	39
Pears	43	39	37	35
Blueberries	15	11	16	17
Currants	11	12	14	13
Sour cherries	16	13	11	13
Mirabelle plums	5	5	5	4
Other	14	13	16	15
Total	1,330	1,352	1,301	1,338

Source: European Statistics Handbook, Fruit Logistica 2023

Table 2: German production of fresh vegetables, in thousands of tonnes, 2019–2022

Fresh vegetables	2019	2020	2021	2022
Carrots	791	802	962	670
Onions	522	540	664	519
White cabbage	449	446	435	391
Gherkins	183	149	171	187
Red cabbage	125	125	142	128
Iceberg lettuce	139	128	131	126
Asparagus	131	118	119	113
Beetroot	96	99	110	102
Spring onions	85	90	74	89
Other	1,187	1,196	1,248	1,174
Total	3,707	3,693	4,057	3,499

Source: European Statistics Handbook, Fruit Logistica 2023

4. What are the prices for fresh fruits and vegetables in Germany?

Between 2021 and 2022 German consumers had to pay considerably more for fresh fruit and vegetables. However, the increase was smaller than the one reported for overall food prices, which showed a 13.4% rise in 2022. Consumer prices for vegetables increased by 10.7%, while fruit prices only rose by 3% (Figure 12).

Figure 12: Consumer prices for selected fruit and vegetables in 2022, % change on the previous year

Source: © Statistisches Bundesamt (Destatis), 2023

Prices not only increased at the consumer level, but also at the wholesale market (Figure 13). Between 2021 and 2022, wholesale prices of fresh fruit and vegetables increased by 9.6%. Fresh produce prices are expected to keep rising mainly because of climate change, meaning production costs will grow and sustainability market requirements will become stricter. 

Source: © Statistisches Bundesamt (Destatis), 2023

Generally, the market determines the price of your products with basic supply and demand principles. For exotic and niche products, imports are small and mostly demand-driven. For common fruit and vegetables, availability is the main determinant of prices. Prices increase when the market is short of produce. If there is oversupply, prices go down. If you sell in the spot market, you must be ready for this and learn to mitigate risks. Monitor the market, hire independent quality control companies or insure a part of your shipment. Organic produce has a premium of 20% to 30% on average. Be aware that these premiums can change according to the product and demand.

If you want to achieve greater price stability, importers with a supermarket programme are a better option. Supermarkets cannot change prices abruptly over the year. This is why importers will not pay you as much as the market when prices are high. However, when prices are down, importers will pay you better prices. The advantage is that you will always be able to get your produce onto the market. It is a good long-term relationship that requires trust and commitment from both sides. Keep in mind that you need stable volumes to enter a programme.

German and Dutch importers usually work with a profit margin on the sales prices of at least 8%. This excludes expenses like terminal handling charges, scanning costs, laboratory analysis, quality control, handling and storage. Going further along the supply chain, retailers usually apply a 30–35% margin. Margins can be higher for more perishable and slower-selling products. Keep in mind that, for some products, other costs must be considered before the product reaches the end-market segment. For example, packaging, labelling and ripening. 

Retailers and discounters often plan promotions, especially in oversupply periods or for special occasions, such as Easter or Christmas. Promotions are very common in Germany. It is important that you anticipate your harvest and inform your buyers about foreseen high supply periods. They can plan promotions to place more fruit in the market, subject to the supermarket’s approval. Promotions are planned at least one week in advance. For long-term suppliers, supermarkets often include promotions in the supply contract. Prices with large retailers are generally more stable. So despite of the promotions, your overall return will likely be higher than when you are only selling your product in the spot market.

Dana Chahin in partnership with ICI Business and Globally Cool carried out this study on behalf of CBI. 

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