Voluntary Report – Voluntary - Public Distribution

Date: January 20, 2022
Report Number: GM2022-0004

Report Name: COVID Fuels Historic Growth in Organic SalesCountry: Germany
Post: Berlin
Report Category: Agricultural Situation, Agriculture in the News, Special Certification Organic/Kosher/Halal

Prepared By: Leif RehderApproved By: Kirsten Luxbacher

Report Highlights:
Germany is the second largest organic market in the world. It holds good prospects for U.S. organic
products, including tree nuts, fruits and vegetables, and processed food products. The market shows
tremendous growth rates with organic products more popular than ever. The success story will continue
and will be further fueled by plans of the new German Government to increase the country’s share oforganic farming. This report contains information on the German organic market, including bestprospects, and opportunities, such as participation in BioFach, the world’s largest organic trade fairtaking July 26-29, 2022.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF
AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICYGeneral Information
After the United States, Germany is the second largest organic food market in the world. Sales oforganic food in Germany increased rapidly in recent years, reaching a high of €15 billion (USD $16.85
billion) in 2020. That represents more than a third of total organic food sales in the European Union and
6.4 percent of total food sales in Germany. During the COVID-19 pandemic, German consumers
purchased 22 percent more organic products in 2020. This reflects a shift in consumer food purchasesfrom the food service sector to the food retail sector as a result of government pandemic control
measures that included the closure of restaurants, hotels, etcetera and increased working from home.
These closures and shifts in work settings, meant that consumers generally purchased more food retailitems. As part of this trend, organic products saw a rise in sales numbers.

Organic Retail Sales in Germany
in Million €20,00015,00010,000
5,000
0
2000

2005

2010

2015

2020

Source: FIBL Statistics, Agrarmarkt Informations-Gesellschaft (AMI), Bund Oekologische
Lebensmittelwirtschaft (BÖLW), 2021* FAS Berlin Estimate

According to the Bund Oekologische Lebensmittelwirtschaft (BÖLW), an umbrella organization ofGerman producers, processors, and traders of organic food, German customers bought more organic
products at all points of sale, with the greatest upswing in “other places of retail.” Growing 35%, healthfood stores and farm shops, online retailers (incl. delivery services), weekly markets, bakers, and
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF
AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICYbutchers saw the biggest rises. Direct marketers and online retailers flourished; organic subscription box
services were stretched to their limits during the various lockdowns throughout the year. Top sellers of
the year included organic meat, flour, fruit, and vegetables, with growth figures of between 70%(poultry) and 25% (fruit). The organic segment grew at about twice the rate of the total food market.
In 2020, organic farming in Germany included 35,413 farms and covered 4,197,737 acres of land. With
record sales of organic food and beverages, many more farms and food companies seized theopportunity to go organic. According to BÖLW, 10.2% of Germany’s agricultural land was managed byorganic farmers in 2020, while a 5.3% increase in land area created a further 209,866 acres of organic
land. One out of eight farmers in Germany has become organic and the number continues to grow.
Though organic farming in Germany is growing, domestic production is unable to meet demand,
resulting in higher import volumes (and values). In general, the German organic market offers good
opportunities for suppliers who are creative in their choice of products and work with the organic
community to tailor their production to meet demand from food producers and the retail trade.
Organic products were more popular than ever in 2020. German consumers spent significantly moremoney on organic food but also on food in general. This was partly because options for out of homeeating were limited. It remains to be seen whether this consumer behavior translates over to the foodservice sector past the COVID-19 pandemic. For now, the record surge in 2020 can be seen as an
exception due to the pandemic. However, the organic sector is projected to grow in 2021. FAS Berlin
expects more moderate growth along the lines of pre-pandemic years.

New Government Sets Ambitious Goal
Germany’s new three-party governing coalition of Social Democrats (SPD), the Greens, and the Liberal
Democrats (FDP) made it clear, that fighting climate change and achieving the Paris climate protection
targets is a top priority. Their coalition agreement asserts that climate protection secures freedom,justice, and sustainable prosperity. Thus, the so called “social market economy” in Germany needs to be
re-established as a “socio-ecological market economy.” The distribution of the ministries between thethree governing parties has shown that the Greens will take the lead in agriculture and related issues.
The party will not just head the Federal Ministry of Food and Agriculture but also the Ministry ofEnvironment and the Ministry of Economy and Climate Protection. Traditionally, organic agriculture
has been a key component of the Green party’s agenda and the coalition agreement already indicates
political support for organic agriculture.
The parties agreed that making agriculture sustainable and fit for the future is one of their primary goals.
The coalition agreement states that species extinction and biodiversity loss is another ecological crisis.
For this reason, the new government wants to limit the use of pesticides in general and one of themethods to do so, is increasing the share of organic farming. While, the EU has already set itself anorganic target of 25% by 2030 in the Farm to Fork strategy, the new German government has even more

ambitious plans. It aims to increase the share of agricultural land under organic farming to 30% by 2030,
the previous target was 20%. Funding for the federal organic farming program will be increased and, inline with the expansion target, agricultural research funds will also be made available.
When it comes to trade, the new government wants to strengthen rules-based free trade based on fairsocial, ecological, and human rights standards. It advocates for a German and European trade policy
against protectionism and unfair trade practices. While the details of future agricultural policy are yet
unclear, organic agriculture is set to be one of the pillars. This will likely not just increase production but
also trigger demand. The market is clearly set for further growth and to continue its success story.

Organic Food Retail Channels
Organic food sales in Germany are split between traditional food retail companies (e.g., grocery stores)
and specialty organic food stores. The major driver of growth in organic food sales in recent years is the
expansion of specialty organic shops. Traditional food retail accounts for 60% of organic food sales inGermany, with the other 40% going to organic retail shops and specialty shops like bakeries, butchers,
fruit and vegetable stores, open air markets, or direct sales from the farm. In contrast to the conventional
food retail market, the organic food retail sector is neither consolidated, concentrated, nor saturated. For
more information about the food retail market in Germany and other characteristics, please see ourannual report: Retail Food Germany 2021.
It is estimated that there are over 2,400 organic food retail shops in Germany. The company “Denn’s” isthe only truly nationwide store. It has by far the largest number of outlets. Other big organic food chainsare regional or in larger cities only.
CompanyDenn‘sAlnatura

Sales (in Million €)
515
1,000

Number of Outlets
311
153

Bio Company

189

60

Basic

142

32

Ebl

97

30

Locations
Germany, Austria
Mainly in Southernand Western
Germany but also in
Berlin, Bremen,
Hannover andHamburg), Austria,
and Switzerland
Berlin and Potsdam
but also in Dresdenand Hamburg
Berlin, Rhine-Ruhrregion, Munich,Stuttgart, andFrankfurt
Nuremberg andSuperBioMarkt

66

32

Bamberg
North-Rhine
Westphalia andOsnabrueck

Sources: FAS Berlin, Lebensmittelzeitung and company websites

U.S. Organic Exports to Germany
U.S. organic food exports to Germany that have Harmonized System (HS) codes peaked in 2019 at $1.7
million. The COVID-19 pandemic curbed trade in these products, with exports of U.S. organic products
falling to $0.7 million in 2020. Exports were down by 41 percent in September 2021 compared to thesame period in 2020 (latest available data). Note that the Harmonized System covers a limited numberof organic commodities. Existing HS codes cover only a fraction of the United States’ organic trade withGermany. Products covered by HS codes include fresh organic products like milk, fruits, and vegetables,
but not popular processed products or organic nuts. Actual U.S. exports of organic products to the EU
and Germany are likely multiple times higher than reported data shows. Despite this shortcoming, theHS system is a useful tool for tracking covered products and to see the export dynamics for thosespecific products.

U.S. Organic Fresh Food Exports to Germany
in $ thousand
2,000
1,500
1,000
500
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
Source: U.S. Census Bureau Trade Data (USDA’s Global Agricultural Trade System Online – GATS),
2021* FAS Berlin Estimate

U.S. Census Bureau Trade Data shows very volatile U.S. organic food exports to Germany. The top
export product changes every year, indicating that decisions are based on the current U.S. price andsupply situation rather than long-term, established contracts between American and German companies.
The steep decline in organic exports to Germany was heavily influenced by trade disruptions caused by
the COVID-19 pandemic. Exports of all products besides asparagus and coffee declined.

Top U.S. Organic Exports to Germany
in $ thousand
1000
800

2018

2019

2020

600
400
200
0
Asparagus Strawberries

CoffeeBerries

Milk

Beets

Source: U.S. Census Bureau Trade Data (USDA’s Global Agricultural Trade System Online – GATS)

At the time of writing, available trade numbers (January-October 2021) show a further drop in exportsof U.S. organic products to Germany in 2021. This appears to be caused by a drop in asparagus exports.
While asparagus drove exports in 2020, exports were nonexistent in 2020. It is a similar story for milk,
berries, beets, and other organic agricultural commodities. Increasing coffee and pear exports cannot
offset decreasing volumes across the board.

Top U.S. Organic Exports to Germany in 2021
in $ thousand
350
300
250
Jan-Sep 2020

Jan-Sep 2021

200
150
100
50
0
Asparagus

Strawberries

LemonsPears

CoffeeSource: U.S. Census Bureau Trade Data (USDA’s Global Agricultural Trade System Online – GATS)

Road Map to the German Market
Germany is not only the largest market for organic products in Europe, but it is also the largest organic
producer. Despite this, the country is increasingly dependent on imported organic products to meetdemand. This includes organic products that are produced in Germany, but for which there is not enoughsupply, such as potatoes, fruits, vegetables, dairy products, and meat. With this demand, the Germanorganic market offers good opportunities for U.S. organic exporters. However, there are several
challenges that U.S. exporters must be aware of before exporting to Germany. To successfully introduce
food products, knowledge of the market and personal contacts are essential. Any potential U.S. suppliershould analyze German and EU food law, packaging and labeling requirements, business practices,trade-related laws, tariffs, potential importers, and the distribution system. The Foreign Agricultural
Service (FAS) office in Berlin offers guidelines on business practices and import regulations. Please see
https://fas-europe.org/countries/germany/ for more information.
German food retailers’ purchasing habits are fragmented and competitive. Few German retailers importproducts directly from other countries, except for items that they purchase in large quantities. Most foodretailers would rather buy from central buyers/distributors importing food and beverages. In general,these wholesalers are specialized in products or product groups, and some are even experts in foodproducts from a specific country of origin. Thus, specialized importers have an in-depth knowledge ofimporting requirements, such as product certification, labeling and packaging. They also typicallyhandle shipping, customs clearance, warehousing, and distribution of products within the country.

Participating in German food trade shows is a proven way to find the right distributor and facilitates
direct contact with German food brokers, importers, and wholesalers. Trade shows like the BioFach
show in Germany enjoy an exceptional reputation within the global organic food industry and its
outreach is global. BioFach is the largest organic trade show in the world. From 2019 to 2020, projected
twelve-month sales doubled for U.S. exhibitors while on-site sales increase yearly. BioFach 2022 willtake place from July 26-29. For the latest BioFach updates, FAS Berlin recommends checking theshow’s website: https://www.biofach.de/en/info/biofach-2022. Due to evolving COVID-19 control
measures in Germany, show dates are subject to change. Please contact FAS Berlin for more
information on the BioFach trade show.

Booming vegan market creates export opportunities
In Germany, veganism is increasingly popular. The nation launches the most vegan products in theworld. This creates export opportunities for U.S. companies as most major vegan food producers are
based in the United States. There is good potential for meat and dairy substitutes and breakfast foods.
For more information, please see GAIN report: Germany is Leading a Vegan Revolution

The EU-U.S. Organic Equivalency Arrangement
Signed in February 2012, the EU-U.S. Organic Equivalency Arrangement entered into force on June 1,
2012. Since then, organic products certified in the United States or EU may be labeled and sold as“organic” in either market. This partnership streamlines trade between the two largest organic producers
in the world and provides organic farmers and businesses access to an over USD $50 billion, andgrowing, combined market. The growing market for organics in the EU in combination with theequivalency arrangement creates more trade opportunities for U.S. exporters. The EU offers market
opportunities for U.S. organic fresh produce, dried fruit and nuts, specialty grains, and processed
products. The arrangement created export opportunities in Germany for U.S. companies in the following
market segments: tree nuts, fresh fruit, specialty grains, dried fruit, vegetables, and processed foodproducts.
For more information on the EU-U.S. Organic Equivalence Arrangement, the European organic market
and organic trade between the U.S. and the EU please see the Organic Market EU 2021 GAIN report“Good Prospects for U.S. Organic Exports in the EU.”The European Union adopted its updated Organics Regulation in 2018. The Regulation is set to enter
into force on January 1st, 2021. The following report gives an overview of the main regulatory changes
to occur and highlights those that may impact U.S. exporters of organic products: “New EU Organic
Regulation Entering Into Force in 2021 Regulatory Update.”Post Contact and Further Information
Internet home pages of potential interest to U.S. food and beverage exporters are listed below:
USDA/FAS/Berlinwww.fas-europe.org
U.S. Mission to the European Union www.fas.usda.gov/posthome/useu/usda.html
FAS Washington
www.fas.usda.gov
Organic Trade Associationwww.ota.com
If you have questions or comments regarding this report, or need assistance exporting to Germany,please contact the U.S. Agricultural Affairs Office in Berlin at the following address:
Foreign Agricultural Service
U.S. Department of Agriculture
Embassy of United States of America
Clayallee 170, 14195 Berlin Germany
Tel: (49) (30) 8305 – 1150
Email: AgBerlin@usda.gov
Home Page: www.fas-europe.org

Please view our home page for more information on exporting U.S. food and beverage products toGermany, including market and product “briefs” available on specific topics of interest to U.S.
exporters. Importer listings are available from the Agricultural Affairs Office for use by U.S. exportersof U.S. food and beverage products.

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