Food Processing in Germany
The data visualization tool, Atlas of Economic Complexity, allows people to explore global trade flows across markets, track these dynamics over time and discover new growth opportunities for every country. Germany stood out for its unique ability to maintain a diverse and complex market share. Germany ranks one of the most economically complex countries on the Growth Lab’s ECI ranking. To continue its growth, Germany must promote innovation and invent new products. Through engaging with the different pages on the Atlas that analyzed economic structure, market dynamics, and strategy spaces, my most glaring takeaway was the diversity in product sectors. Germany has exploited virtually all major existing products, and growth can be pursued by promoting innovation and creating new products.
One area of Germany’s economic structure I chose to delve more into was the food sector, which has historically and presently always been a big part of the economy and culture. The German Food Sector is a relatively big pool with over five million working in 652,000 companies. This large sector ensures that 85 million citizens in Germany and many people worldwide can enjoy safe, high-quality food daily. Germany is also the world’s third largest importer of agricultural products after the United States and China. In 2020, Germany imported consumer-oriented agricultural products worth US$71.5 billion; the majority (85%) originated from other E.U. member states.
Beyond the larger umbrella term Food Sector, the german food processing industry is a huge part of the economy. Food processing is any method of turning fresh foods into other products by washing, chopping, pasteurizing, freezing, fermenting, and packing. The German food processing industry recorded 7% growth in 2021, driven mainly by strong domestic demand.
Generally, German food processors source their ingredients from local producers or local importers, and only large processors import ingredients directly from foreign suppliers. On the other hand, U.S. exports with Germany have many complexities, sometimes making it more difficult to sustain a lasting interconnected relationship. For example, German consumers’ demand for quality and low prices consumer preferences combined with private sustainability standards can act as a barrier to trade. Additionally, because there is no unified U.S. sustainability message in the German market, there remains a looming misconception about U.S. agriculture.
Wide-ranging technological and economic changes in food production and processing, as well as changes in society, have recently been faced by the 201-billion-dollar industry. These changes will significantly impact the entire food processing chain, from agricultural production to food processing and distribution to final consumers. New science and technological approaches to food processing, the effects of structural changes in the food industry and in food retailing, the impact of food scandals and the BSE crisis, socio-demographic developments, and changes in customer behavior are a few examples of these changes.
Despite concerns about rising prices and shortages of raw materials, the food processing industry maintains a superior level of optimism. The food processing sector will continue to be a central part of the economy and way of life. An industry this large has several challenges, including food sustainability. Germany will be challenged to continue leading efforts to provide a path forward for food technology and sustainability.
