The German consumer and his contradicting attitudes
24th August 2020
Gabriele Weiss Brummer, Market Manager Germany, Bord Bia - The Irish Food Board
Germany is the market, where discounters like Aldi and Lidl were born. This long history of discount offers have influenced the German consumers and strengthened their expectations on receiving good quality on a low price level in food and beverage in general. According to Statista Private Label food products have had an overall share of 40.6% in 2019, in the segment of cheese this share was even higher with almost 60%. Covid-19 has highlighted this price-consciousness again due to high share of short-term work and further fear of unemployment. Aldi and Lidl used the by government decided VAT-reduction for re-opening a price-driven communication campaign, competing against each other and the remaining retailers, which will force other retailers to follow. So overall there is a huge segment of German consumers who are forced to make their buying decision on the price of the product or who are not willing to pay a higher price as they are used to low-price offers.
On the other hand, also enforced by Covid-19, there is a growing awareness for the “scene behind the curtains” and the consequences of a low-price oriented production on the quality of the product, the impact on the health of the consumer and the welfare of the workers and the animals. The recent scandals at meat processing plants with high infection rates of workers and the overall uncertainty regarding the own health and the increased awareness on hygienic factors have raised the attention like a burning lens on this topic. Thus more than a third of German consumers, according to a study implemented by the University of Göttingen in Lower Saxony, have stated that they pay higher attention to the origin of the product than before. Also labels like organic and “Haltungsform”, a national meat label clustering pork, chicken and mince into levels from 1 to 4 with 4 signaling highest standards, facing higher awareness and acceptance than ever before. According to the nutrition report 2020, implemented and published by the Federal Ministry of Food and Agriculture, 50% of the 2.000 interviewees looking for the organic label when buying a product and 48% on animal-friendly husbandry label, where in 2012 only 42% have been showing interest in this. 45% even stated that they would accept a price of 15 Euro p. 1 kg meat.
These totally opposite group of consumer thinking shows the complexity of the German market, but also the opportunity for products on both ends of the broad price range. Either low price positioning or premium positioning, based on proven added-values as organic, will be of interest to the German consumer.
Sources:
- Statista.com, online platform for market and consumer data, https://de.statista.com/statistik/daten/studie/184153/umfrage/handelsmarkenanteil-im-lebensmitteleinzelhandel-nach-food-warenklasse/
- Study of University of Göttingen, reported by Lebensmittelzeitung 6th of Aug 2020
- BMEL Ernährungsreport 2020 , www.bmel.de