Germany Foodservice Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Germany Foodservice Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The German foodservice market is expected to witness a CAGR of 2.54% during the forecast period (2022-2027).

The COVID-19 pandemic outbreak has shown a very sharp decline in revenues to the street food vendors and also to the food service companies as a whole. The major reason for this decline is because prime importance has been given to cleanliness in fear of COVID-19. The strict lockdowns enforced by the government restricted consumers to their households. There is an opposite effect on the organized food market, which matches the taste flavor and expectations of the consumer along with maintenance of hygiene and convenience of delivery, i.e., they were given priority relatively.

The companies operating in the German foodservice market space are also attracting significant interest from domestic as well as international private equity and venture capital funds. This reflects the growth potential that the market holds food service industry is highly fragmented in the country, owing to the presence of enormous small (unlicensed establishments) and global players, with a majority of full-service and quick-service restaurants operating in the country. Moreover, there has been a growing trend and increasing competition from small foodservice brands, as they provide more value-added services to the consumers.

Setting up a new restaurant requires a moderate level of capital investment, making it easy for new entrants to enter the market. Another factor that affects the ease of new entry for the new restaurant is economies of scale, which can be established once the production and other operations achieve efficiency. With the growing alternative of online delivery, there is a huge impact on the distribution network of the foodservice. The presence of international food chains, like KFC, Domino’s, and Pizza Hut, in major cities of Germany, with strong marketing and promotional activities, aids in promoting the growth of players in the market and the chained outlet market. In addition to this, the growing demand for freshly brewed coffee in the country is benefitting the cafes in the country as the number of customers is increasing in the country.

The takeaway restaurants are majorly dominated by the increasing number of independent restaurants, cafes, and bars in the country and are highly appreciated by the time constraint affected consumers in the country, which boosts the 100% home delivery/takeaway segment in the market studied. The ongoing digitalization trend is driving the online food channels in Germany as it offers many opportunities in terms of the services provided to consumers. Also, increasing penetration of social media platforms such as Facebook, Instagram, Twitter, and YouTube for marketing like custom-tailored campaigns can be initiated to widen the customer base, which is often achieved in combination with the use of discounts other incentives.

The foodservice industry is highly fragmented in the country, owing to the presence of enormous small (unlicensed establishments) and global players, with a majority of full-service and quick-service restaurants operating in the country. Moreover, there has been a growing trend and increasing competition from small foodservice brands, as they provide more value-added services to the consumers. The market is highly fragmented, owing to the number of small and giant players dominating the market. Some of the key players in the market are McDonald's, Starbucks Coffee Company, Domino's, Whitbread PLC, and Yum! Brands.

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