by Frank Lorenz, unitcell, February 2015
The internationalization of raw material and sales markets is one of the key dynamics for the development of companies in the German food industry. It is becoming increasingly important to keep an eye on these dynamics for medium- and long-term corporate success.
Overall, these developments in 2014 and the expectations for the current year are positive for the German food industry, both on the procurement side (availability and price) and on the sales side (price).
On the procurement side, prices on the raw materials markets declined significantly last year due to record global production levels, following strong increases in 2012 and 2013 in particular. This applies to almost all agricultural commodities (meat, cereals, oilseeds, eggs, milk, potatoes, sugar, fruit and vegetables). With a high level of market supply, prices are expected to continue to fall in 2015, with the exception of beef and poultry, in some cases volatile over the course of the season.
On the sales side, consumer prices for food and beverages rose more strongly in 2014 than consumer prices overall. With consumption volumes in Germany stagnating, consumer spending on food also developed significantly positively due to increased employment and higher real wages.
Thus, the growth in sales in the German food industry can be attributed solely to price increases and higher exports. For 2015, further increases in consumer spending and - not least due to the positive development of the euro exchange rate - a renewed increase in export sales are expected as a result of the positive development of important economic framework data (real wage increase, rising consumer spending).
Sector study food industry
For a comprehensive overview of the sector situation and development of the German food industry, we recommend our position paper (93 pages) "Food Industry - Perspective on Medium-Sized Companies".
One focus of our position paper is the strategic view of the companies in conjunction with the identification and discussion of central operational and administrative fields of action at both strategic and tactical levels.