Key insights for growth in the German Quick Service Market
Sarah Haworth, Global Business Development, Markets
With over 83 million consumers, Germany is one of the largest markets for food and beverages in Europe (GTAI, 2022). For the Quick Service Restaurants (QSR) market in particular, value is expected to reach €15.6 billion by the end of 2022 (Bord Bia, 2022a). Given the size of this market, Bord Bia conducted extensive research in 2022 to identify key market dynamics, consumer trends, route-to-market strategies and up-and-coming chains for Irish suppliers to target.
General market overview
Before delving into consumer insights, it is important to gain a general understanding of the German QSR market. Like most industries, the QSR market was heavily impacted by the pandemic. However, the market is beginning to bounce back, with German QSR market value sales projected to surpass pre-Covid-19 sales by the end of 2024 (Bord Bia, 2022). However, it is important to note that this projection does not include the effects of the current levels of inflation and consumer sentiment, so it is possible that the future projected volume and value levels could be adversely impacted, with food inflation at +17.7% and consumer sentiment at -41.9% as of October 2022 (Trading Economics, 2022).
In terms of the market dynamics, chains have the majority value share of QSRs at 62%, with a steady projection predicted due to chains being better placed to deal with the adverse impact of the pandemic and having a competitive advantage in terms of cash in hand and adaptability (Euromonitor, 2021). Additionally, the value share of off-premise in the German QSR market is growing, with off-premise making up 44% of value share in Germany, and on-premise at 56% (Global Data, 2021). However, as the country recovers from the pandemic and people begin to eat out more, it is likely that on-premise QSRs will grow at a greater rate compared to off-premise (Global Data, 2021).
Furthermore, the size and regional differences of Germany must also be considered before hoping to enter the market. It was evident from qualitative research of food preferences that there are different regional needs across the country:
- North Germany – tends to favour lighter Mediterranean type food
- South Germany – tends to be heavier foods with more of an Austrian influence
- East Germany – young, trendy and modern yet quite budget conscious
- West Germany – popular for eating out compared to other regions
Drivers of QSR Choice
So what are the key drivers and desires among German consumers when choosing a particular QSR restaurant? With the foodservice trade show, Internorga, coming up in March 2023, it is important to grasp the drivers of QSR choice among German consumers.
Firstly, price is a big factor that German consumers consider when choosing a QSR restaurant. German consumers are extremely price sensitive and when looking for a QSR restaurant to eat in, menus prices is one of the first criteria they look at. Secondly, the choice on the menu is an important factor for German consumers. They want a menu that provides numerous options, but at the same time is not overwhelming, and options that meet a number of different dietary requirements such as vegan and vegetarian meals. Furthermore, having healthier options on the menu is a big driver for these consumers. Over the past few years, Germany has experienced rapid growth in plant-based food development and restaurants, with the market worth more than €1.96 billion in 2018 (ProVeg, 2019). Additionally, 15% of global vegan food and drink product launches were in Germany between 2017-2018, with Berlin becoming the epicentre of vegetarian and vegan innovations (ProVeg, 2019).
Thirdly, the atmosphere created in the restaurant and whether it is clean and comfortable to sit in is a large consideration for German consumers when choosing a QSR restaurant. These consumers enjoy a restaurant when it is not too crowded and one is that is spacious, especially after the pandemic, with German consumers still relatively cautious from the pandemic.
Therefore, with the drivers for choosing a QSR restaurant from German consumers established, six key trends were identified within the report to focus on. Overall, it was found that the German consumer trend analysis showed a strong correlation with Bord Bia’s Consumer Lifestyle Trends, however, there tends to be a more cultural and local twist placed on these trends for German consumers (Bord Bia, 2021). The six key trends to look out for are:
- Sustainability (with limits) – sustainability is important to German consumers, however they are not willing to pay much more for the sustainable options, especially in today’s economic climate.
- Plants, health and non-meat – increasing focus on plant-based diets and a reduction in meat for perceived health benefits. A large number of German consumers consider themselves ‘flexitarian’ as they try to cut out eating large amounts of meat during the week. There is also increased veganism among German consumers (Bord Bia, 2022b).
- Premium vs. price performance – German consumers can be split into two groups and finding the sweet spot between the two is key
- Fast, tasty and cheap
- Those willing to pay more for pleasure, health or purpose
- Viral global fusion – Germany has one of the most internationalised cuisine offerings, giving their consumers an abundance of choice.
- Regional, local and seasonal – Since the pandemic, there has been a move back towards more local and seasonal offerings. This can be for a number of reasons some of which are for nostalgia or reaction to globalisation.
- Fast, flux and hybrid – Balancing going back into the office and still working from home, German consumers need food options that are easily ‘portable’ and fast.
These key trends are important to understand when developing your value proposition for the German QSR market. Each QSR chain focuses their offering on one or more of these trends. You can use this research to uncover the most important chains to target in the market and what is important to them. To understand more about the German QSR market and route-to-market strategies, please contact Sabrina.firstname.lastname@example.org
Bord Bia. (2021). Consumer lifestyle trends. Bord Bia - The Irish Food Board. Retrieved November 2, 2022, from https://www.bordbia.ie/industry/insights/consumer-lifestyle-trends/
Bord Bia. (2022a). Insights for Growing in the German Quick Service Market 2022. Retrieved November 2, 2022, from https://bordbia.bloomfire.eu/posts/2060947-insights-for-growing-in-the-german-quick-service-market-2022
Bord Bia. (2022b). Insights for Growing in the German Quick Service Market 2022 (p. 1).
Euromonitor. (2021). Limited-service restaurants in Germany. Limited-Service Restaurants in Germany. Retrieved November 2, 2022, from https://www.euromonitor.com/limited-service-restaurants-in-germany/report
Global Data. (2022). Foodservice market size and trend analysis by profit channel (restaurants; clubs, pubs, and bars; retail; accommodation; others), regions, and forecast, 2021-2026. Market Research Reports & Consulting | GlobalData UK Ltd. Retrieved November 2, 2022, from https://www.globaldata.com/store/report/foodservice-channel-market-analysis/
GTAI. (2022). The food & beverage industry in Germany - gtai.com. The Food & Beverage Industry in Germany. Retrieved November 2, 2022, from https://gtai.com/resource/blob/64004/e80f4dd7ccd691158b0ee2bc10f8cd6c/industry-overview-food-beverage-industry-en-data.pdf
ProVeg. (2019). Proveg. ProVeg Deutschland. Retrieved November 2, 2022, from https://proveg.com/de/
Trading Economics. (2022). Germany Indicators. Germany indicators. Retrieved November 2, 2022, from https://tradingeconomics.com/germany/indicators