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Dairy in Germany

Dairy in Germany

Prospects

Positive outlook for cheese

Over the forecast period, cheese is expected to register a solid volume and value performance, with unprocessed cheese set to outpace processed cheese. More consumers are expected to explore the wide variety of products available, as they favour cheese over other less healthy foods.

Convenient formats and flexitarians set to drive growth

The retail volume increase is partly being fuelled by the trend towards more plant-based and protein-rich diets. German consumers are likely to continue to scale back their meat consumption as they increasingly adopt a “flexitarian” lifestyle.

Soft cheese is set to post the highest growth

Soft cheese tailor-made for barbecuing witnessed strong growth in demand towards the end of the review period, because more consumers sought alternatives to meat and sausages when barbecuing. Barbecue cheese is included under soft cheese, and is expected to post the highest volume CAGR and value CAGR at constant 2018 prices over the forecast period.

Competitive Landscape

Private label maintains its lead

Combined private label continued to lead cheese in value terms in 2018. The main reason for the strength of private label in cheese is the fact that many consumers do not consider branding important in this category; instead prioritising the type of cheese, especially in unprocessed cheese.

Shift to unprocessed cheese

Despite challenges for some, cheese companies in Germany certainly do not face a crisis, as Germans are increasingly enthusiastic about cheese consumption, and increasingly view many cheeses as healthy and highly conducive to their eating habits, particularly snacking. There is a shift underway, but it is a move away from processed cheese and towards unprocessed varieties; not away from cheese altogether.

Predatory competition is expected to increase

Cheese is one of the most fragmented categories within packaged food, with various different regional and international cheese varieties and small, large and private label lines all competing. Besides the strong domestic competition, the presence of several large international manufacturers fuels the competition in cheese.

Prospects

Milk consumption set to decline in volume terms

After price increases in 2017 led to strong current value growth for milk, stabilisation was seen in 2018, with a small value decline. In volume terms, milk continued to decline in 2018.

Milk alternatives expected to see the highest value growth

As sales of cow’s milk, a traditionally highly consumed staple in German households, continued to falter, other milk alternatives vastly outperformed this category in 2018. The higher penetration and popularity of milk alternatives made these products attractive to consumers.

Flavoured milk drinks is projected to see dynamic development

Flavoured milk drinks benefited from a high level of innovation in 2017 and 2018, thus registering strong performances in both volume and current value terms. More consumers regard flavoured milk drinks as a convenient alternative to soft drinks and drinking yoghurt, with the launch of new products helping to stimulate sales.

Competitive Landscape

Private label will continue to lead

Private label lines from the four major German grocery retailers clearly lead drinking milk products. Aldi and Lidl in particular take advantage of competitive prices and promotional activities, mainly in milk.

A shift towards full fat fresh milk and milk alternatives

With the struggles of dairy milk showing no end and the competition for the limited growth heating up, it is expected that companies will seek to evolve and pursue opportunities for growth wherever they exist. It is likely that companies in cow’s milk will look to devote greater finances and production capability to the sale of full fat fresh milk; the recent demand for and projected value CAGR over the forecast period stand in stark contrast to the consistent declines for fat-free and semi-skimmed milk.

Increased focus on free-range and non-genetically modified

More Germans are anticipated to focus on quality and be increasingly aware of ethical issues regarding the treatment of animals, feeding and transportation. Therefore, so-called “Heumilch” (grass milk or pasture milk) is expected to be increasingly important, as German consumers are becoming more concerned about the feeding of cows.

Prospects

Healthy and trendy

The market for convenient and healthy food is more competitive than ever. Even “healthy” yoghurt has to offer added value in order to attract consumers.

Plain yoghurt set to see the highest growth

Over the review period, Greek yoghurt was a major growth driver in plain yoghurt. It emerged as an ultimate health food, given its versatility, high protein content and modest calorie count.

Sour milk products expected to continue its positive development

Sour milk products such as kefir and buttermilk showed the strongest volume and current value growth over the review period, as consumers sought healthy drinks with moderate calories. In addition, the sour, fresh taste of these products appeals to more consumers than in the past.

Competitive Landscape

Danone and Müller continue to lead, but the competition intensifies

Yoghurt is led by two established players, Danone Deutschland and Molkerei Alois Müller. These players offer well-known brands, with Müller adopting a single-brand strategy and Danone offering a range of health and wellness brands, led by probiotic yoghurt brands Activia and Actimel, in spoonable yoghurt and drinking yoghurt respectively.

Growing presence of private label

One of the key developments in yoghurt and sour milk products is the growing presence of private label. In 2017 and 2018, several new private label products were launched addressing current consumer trends.

New product launches and price polarisation expected

Yoghurt manufacturers in Germany focus on frequent launches and discontinuations because brand loyalty in yoghurt is low, with consumers keen to try new flavours; yoghurt is the dairy product which sees the fastest change in product selection. In addition, with health and wellness expected to remain a key sales driver, the forecast period is likely to see non-dairy milk alternatives expanding in yoghurt, as well as reduced sugar and organic yoghurt.

Prospects

Different developments in other dairy

In 2018, other dairy was defined by two different stories. On the one hand, chilled dairy desserts and snacks continued to experience high growth, despite growing consumer health-consciousness.

Health concerns to limit growth potential

Increasing consumer concern with health and nutrition presents a potential threat to development across other dairy categories, including contributing to the slower growth in chilled dairy desserts and snacks over the forecast period. Furthermore, categories with an old-fashioned image, such as coffee whiteners and condensed milk, are set to see ongoing declines, with cream also seeing stagnating sales as it struggles to appeal to increasingly health-conscious consumers.

Organic set to outperform other health and wellness segments

Organic products are expected to outperform more traditional offerings in the forecast period. However, other dairy is also characterised by the decline in fortified/functional and reduced fat products; for instance, consumers prefer to indulge properly, and do not want to choose reduced fat desserts.

Competitive Landscape

Clean eating trend to impact players in other dairy

Growth opportunities within other dairy are largely confined to chilled dairy desserts, chilled snacks and fromage frais and quark; three categories which experienced growth in recent years, whilst much of the rest of the category struggled. Companies operating within these categories thus saw most of the available gains.

Disruption expected from non-dairy alternatives

Similar to drinking milk products, other dairy has begun to see an impact from the growth of non-dairy alternatives made using plants, or lactose-free products, particularly cream. However, whilst sales of products such as almond milk and coconut milk boomed within drinking milk products over the review period, the same cannot be said about such products in other dairy.

Private label will continue to lead

Private label has a strong presence in other dairy, with major grocery retailers Aldi, Rewe and Lidl comprising the top three players. This is due to the fact that other dairy includes basic dairy products such as condensed milk and cream; therefore, it is difficult for brand manufacturers to claim product advantages over private label.


Dairy in Germany - Category analysis
Butter and Spreads
HEADLINES
PROSPECTS
From butter to alternative spreads
The shift to organic
Discounters set to remain the main distribution channel
COMPETITIVE LANDSCAPE
Unilever maintains its lead
Private label holds a strong position
Product differentiation is key to future growth
CATEGORY DATA
Table 1 Sales of Butter and Spreads by Category: Volume 2013-2018
Table 2 Sales of Butter and Spreads by Category: Value 2013-2018
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2013-2018
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2013-2018
Table 5 NBO Company Shares of Butter and Spreads: % Value 2014-2018
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2015-2018
Table 7 Distribution of Butter and Spreads by Format: % Value 2013-2018
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2018-2023
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2018-2023
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2018-2023
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2018-2023
Cheese
HEADLINES
PROSPECTS
Positive outlook for cheese
Convenient formats and flexitarians set to drive growth
Soft cheese is set to post the highest growth
COMPETITIVE LANDSCAPE
Private label maintains its lead
Shift to unprocessed cheese
Predatory competition is expected to increase
CATEGORY DATA
Table 12 Sales of Cheese by Category: Volume 2013-2018
Table 13 Sales of Cheese by Category: Value 2013-2018
Table 14 Sales of Cheese by Category: % Volume Growth 2013-2018
Table 15 Sales of Cheese by Category: % Value Growth 2013-2018
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2013-2018
Table 17 Sales of Unprocessed Cheese by Type: % Value 2013-2018
Table 18 NBO Company Shares of Cheese: % Value 2014-2018
Table 19 LBN Brand Shares of Cheese: % Value 2015-2018
Table 20 Distribution of Cheese by Format: % Value 2013-2018
Table 21 Forecast Sales of Cheese by Category: Volume 2018-2023
Table 22 Forecast Sales of Cheese by Category: Value 2018-2023
Table 23 Forecast Sales of Cheese by Category: % Volume Growth 2018-2023
Table 24 Forecast Sales of Cheese by Category: % Value Growth 2018-2023
Drinking Milk Products
HEADLINES
PROSPECTS
Milk consumption set to decline in volume terms
Milk alternatives expected to see the highest value growth
Flavoured milk drinks is projected to see dynamic development
COMPETITIVE LANDSCAPE
Private label will continue to lead
A shift towards full fat fresh milk and milk alternatives
Increased focus on free-range and non-genetically modified
CATEGORY DATA
Table 25 Sales of Drinking Milk Products by Category: Volume 2013-2018
Table 26 Sales of Drinking Milk Products by Category: Value 2013-2018
Table 27 Sales of Drinking Milk Products by Category: % Volume Growth 2013-2018
Table 28 Sales of Drinking Milk Products by Category: % Value Growth 2013-2018
Table 29 NBO Company Shares of Drinking Milk Products: % Value 2014-2018
Table 30 LBN Brand Shares of Drinking Milk Products: % Value 2015-2018
Table 31 Distribution of Drinking Milk Products by Format: % Value 2013-2018
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Volume 2018-2023
Table 33 Forecast Sales of Drinking Milk Products Products by Category: Value 2018-2023
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2018-2023
Table 35 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2018-2023
Other Dairy
HEADLINES
PROSPECTS
Different developments in other dairy
Health concerns to limit growth potential
Organic set to outperform other health and wellness segments
COMPETITIVE LANDSCAPE
Clean eating trend to impact players in other dairy
Disruption expected from non-dairy alternatives
Private label will continue to lead
CATEGORY DATA
Table 36 Sales of Other Dairy by Category: Volume 2013-2018
Table 37 Sales of Other Dairy by Category: Value 2013-2018
Table 38 Sales of Other Dairy by Category: % Volume Growth 2013-2018
Table 39 Sales of Other Dairy by Category: % Value Growth 2013-2018
Table 40 Sales of Cream by Type: % Value 2013-2018
Table 41 NBO Company Shares of Other Dairy: % Value 2014-2018
Table 42 LBN Brand Shares of Other Dairy: % Value 2015-2018
Table 43 Distribution of Other Dairy by Format: % Value 2013-2018
Table 44 Forecast Sales of Other Dairy by Category: Volume 2018-2023
Table 45 Forecast Sales of Other Dairy by Category: Value 2018-2023
Table 46 Forecast Sales of Other Dairy by Category: % Volume Growth 2018-2023
Table 47 Forecast Sales of Other Dairy by Category: % Value Growth 2018-2023
Yoghurt and Sour Milk Products
HEADLINES
PROSPECTS
Healthy and trendy
Plain yoghurt set to see the highest growth
Sour milk products expected to continue its positive development
COMPETITIVE LANDSCAPE
Danone and Müller continue to lead, but the competition intensifies
Growing presence of private label
New product launches and price polarisation expected
CATEGORY DATA
Table 48 Sales of Yoghurt and Sour Milk Products by Category: Volume 2013-2018
Table 49 Sales of Yoghurt and Sour Milk Products by Category: Value 2013-2018
Table 50 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2013-2018
Table 51 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2013-2018
Table 52 Sales of Flavoured Yoghurt by Flavour: Rankings 2013-2018
Table 53 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2014-2018
Table 54 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2015-2018
Table 55 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2013-2018
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2018-2023
Table 57 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2018-2023
Table 58 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2018-2023
Table 59 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2018-2023
Packaged Food in Germany - Industry Overview
EXECUTIVE SUMMARY
Packaged food continues to perform well in 2018
Higher consumer confidence promotes interest in added-value products
Strong competition, with a wide range of different players
Modern grocery retailers continue to dominate distribution
Further low annual growth expected
FOODSERVICE
Sales to Foodservice
Sales to foodservice expected to continue rising
Performance varies significantly by area
Growing number of large players with own foodservice departments
Consumer Foodservice
Continued consumer foodservice growth
Strong competition, with independent operators standing ground against chained players
Positive outlook but fears of eventual rise in price sensitivity
Category Data
Table 60 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 61 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 62 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 63 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023
MARKET DATA
Table 64 Sales of Packaged Food by Category: Volume 2013-2018
Table 65 Sales of Packaged Food by Category: Value 2013-2018
Table 66 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 67 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 68 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 69 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 70 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 71 Penetration of Private Label by Category: % Value 2013-2018
Table 72 Distribution of Packaged Food by Format: % Value 2013-2018
Table 73 Distribution of Packaged Food by Format and Category: % Value 2018
Table 74 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 75 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 76 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 77 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023
SOURCES
Summary 1 Research Sources

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