The pizza market - Germany

1.2 A global market dominated by Western Europe and the United States

Global pizza consumption amounts to *** pizzas every second, or ***,*** tons of pizza eaten per year. The biggest consumers of pizzas in aggregate numbers are the Americans, followed by the French and Italians. [***]

Source: ****

In ****, the total value of pizza sales amounted to close to $*** billion. Western Europe accounts for around **% of global consumption. Moreover, the global pizza market is dominated by large franchises, such as Domino's Pizza and Pizza Hut. At the global level, the former had **.*** restaurants in ****, equal to a turnover of $*.* billion. Pizza Hut had more than **.*** restaurants in ****, but remains behind Domino's Pizza in terms of revenue, amounting to around $* billion. These two brands alone represent about *% of the world pizza market.

Relative Pizza Consumption per Capita

Source: ****

In per capita pizza consumption Germany placed *th in world in ****, consuming on average pizza worth $** per person per year. In first place we find the US which consumes well above double that amount compared to Germany. Moreover, in Europe Germany places fourth in terms of consumption.

1.3 A strong domestic market

Pizza’s distribution channels and product offerings come in many forms ; for example, it can be consumed in restaurants, through takeaway, and also fresh or frozen. For this reason, we aggregate all these values from different sub-products of pizza which we obtain from Euromonitor in order to reach a total market size. In section two, a value breakdown for each distribution channel of pizza is provided.

Source: ****

This graphs sums up the pizza sales for each year between **** to **** for frozen and chilled pizza, as well as pizza sold in full-service together with limited-service restaurants. Values beyond **** are based on projections. From this, we have that the German pizza market was worth €*.** billion in ****. Moreover, this value is expected to grow to reach €*.** billion in ****. Since ****, this is equal to a CAGR of *.**%.

2.1 Product analysis

In this section, we look at demand for pizza in four different channels: frozen pizza, chilled pizza, full-service restaurants, and limited-service restaurants. Together, these four comprises the aggregate pizza market.

Frozen Pizza

Source: ****

In ****, the frozen pizza sales value was €*.** billion, and is expected to increase to €*.** billion by ****. Between **** and **** this is equal to a CAGR of *.*%. On top of this, Germany’s per capita consumption of frozen food is equal to **.*kg per year and an annual turnover of €**.* billion in ****, which puts the country at the top spot in Europe for consumption of frozen food. [***] Indeed, this is, and will continue to be, a lucrative market within foods in Germany.

Chilled Pizza

Source: ****

Germany’s consumption of chilled pizza is relatively smaller than frozen; in **** this manner of consumption generated €** million in sales. Chilled pizza is mostly sold in super-and hyper-markets and sometimes over the counter. Historically, the limited availability (***) together with the fact that rapid consumption is needed has kept this market small in relation to for example frozen pizza. Nevertheless, the product offering is increasing rapidly, and producers are innovating chilled pizza by adding different toppings and providing healthier alternatives. Indeed, it is estimated that chilled ...

2.2 Demand Trends

What pizzas do Germans eat?

Source: ****

In ****, the most purchased pizza was salami, which represented a third of all sales. Moreover, Margherita was the second most popular type. In other words, every second pizza bought in Germany (***) accounted for a tenth of purchases each.

Online Food Services Catching Attention

Source: ****

The graph above represents the proportion of searches for a given term in a given region during a specified amount of time, compared to when it was the most searched (***). Thus, a value of ** means that the keyword has been used less often in the region concerned, and a value of * means that there is insufficient data for this keyword.

The trend above is depicting google searches for Lieferando (***), which since **** has been the most used food delivery service in Germany. [***] We can see that the search interest for such service has been increasing steadily since ****. Indeed, as we will see in the next graph, online pizza delivery has also increased in parallel to this trend.

INCLUDE REGIONAL ANALYSIS TOO?

Online pizza revenue up

Source: ****

All firms increased their revenue from online pizza between **** and ****. There is no data for Hallo Pizza in **** which is why value * has been given.

Most ...

3.1 Market Overview

The "fast food" sector includes a very large number of actors, and there are many franchises offering pizzas, amongst them Domino's, Pizza Hut, Mamma Roma, Pizza Italia, and the Pizza Box.

In line with previous reasoning, pizza can be purchased at four points of sale: chilled and frozen pizza at retailers, as well as full- and limited-service restaurants.

3.3 Distribution

Number of stores

Source: ****

Although pizza consumption is on the rise, and previous sections have demonstrated that sales are increasing, the number of full-service restaurants are decreasing, and are expected to continue doing so until ****. Moreover, both independent and chained full-service restaurants are set to follow this estimation. In ****, it is expected that in total there will be **,*** full-service restaurants compared to **,*** in **** (***). Moreover, independent full-service restaurants dominate and made up **.*% of all full-service restaurants in ****.

Source: ****

In line with the reasoning for full-service restaurants, there is a decrease in the aggregate number of limited-service restaurants as well. Indeed, what we are seeing is a market takeover by chained restaurants. In other words, larger players are gaining market share, which implies that market concentration is increasing. Nevertheless, the pizza market remains highly fragmented with many players. Indeed, in **** it is expected that out of **** total restaurants (***). This is an increase from ****’s equivalent value of **.*%. Finally, limited-service restaurants are expected to decrease from **** in **** to **** in **** in Germany.

Players on the market

Source: ****

In ****, Domino sold the most pizza in Germany amongst the chains. The company’s revenue in **** was equivalent to €*** million. Meanwhile, Vapiano recorded €*** million in sales, placing them ...

4.1 Production Overview

Products on the Market

Pizzeria restaurants often offer products prepared on site, with fresh products The cooking is carried out, sometimes in view of the customer, using a wood, gas or electric pizza oven. For large retail chains, frozen or refrigerated pizzas are among the products most sought after by consumers. Products on the market include are categorized based on sales, content, and end goal. Consequently, there are three larger segments:

Chilled Pizza Chilled pizza is most often distributed by Hyper- and Supermarkets and are distinguished by the fact that they are ready to consume.

Frozen Pizza Frozen pizza is sold in Supermarkets and Convenience Stores and can be consumed immediately or stored for later consumption.

Fresh Pizza Fresh pizza is distributed by facilities such as fast food chains, restaurants, and delis. They can be consumed in-house or taken away.

However, it should be noted that the emergence of players with a business model based on a different production and their development could reach Germany. For example, the French start-up company Ekim which has developed "pizza robots." offers a different fast-food offer, with real pizzas, made by the minute, which are neither frozen nor reheated and would be marketed in points ...

4.2 Price Analysis

Pizza Price Index

Source: ****

In ****, the consumer price index for pizza in Germany was **.*, from which it can be deduced that prices have fallen by around *.*% compared to ****. The consumer price index measures the average price development of goods and services purchased by private households for consumption purposes. This implies that prices on pizza in Germany have been falling. Meanwhile, as we have seen before, sales have been increasing for all segments. Ultimately, this means that the price decrease has most likely caused a demand increase (***), which has led to more pizza being purchased, and to revenues increasing.

Regional price differences 

Source: ****

The graph above shows the price evolution for the salami pizza across different states in Germany. In ****, the salami pizza was on average the most expensive in Bremen and Badem-Würtemberg where the price was above €*. Moreover, these two regions also accounted for amongst the largest price increases across the country. The lowest price in **** was in Nordrhein-Westfalen.

Pizza Price Breakdown

Source: ****

In Germany in ****, **% of costs a pizza priced at €*.* pertained to taxes, which was the largest cost to bear for the pizza (***) was the second largest cost which accounted for just over a fourth of total costs. ...

4.3 Supply Trends

A Wider Product Range

To accustom all consumer’s needs, pizza restaurants need to constantly update their product offering and introduce new products, such as vegetarian, bio, and allergy-friendly alternatives. This is crucial not only for pizza producers to compete amongst themselves, but also to avoid losing market share to other fast-food alternatives. Both Domino’s and Pizza Hut offer customized “make It yourself” pizzas where the consumer constructs the entire pizza from dough to toppings.

Moreover, HelloFresh are differentiating their product offering by providing ingredients and recipes to clients, without preparing the food itself'. This is convenient in many ways; it permits time savings by not having to look for recipes nor shop for food, and it also brings a certain feeling of fulfillment amongst the population as they prepare the food themselves.

Germany’s Foodtech Success

Since ****, Germany has dominated the European market for Foodtech startups measured through private investment. Indeed, Germany’s HelloFresh and Delivery Hero make up two of the four (***) European startups that have accumulated **% of private investments since ****. [***] Moreover, this explains why consumers adhere less to services such as Uber Eats, which in other countries is very popular.

Due to the fact that Berlin is ...

4.4 Pizza in relation to fast food

Source: ****

In **** and ****, there are two pizza restaurants (***) in the top eight fast food restaurants in Germany when measured by share of units. Moreover, both Pizza Hut and Vapiano increased their market share between **** and ****. McDonald's dominates the amount of restaurants in Germany.

4.5 Les fast food de pizza

Fast food les plus populaires Allemagne, ****-****, % Source: ****

 En **** et ****, deux pizzerias (***). En outre, Pizza Hut et Vapiano ont tous deux augmenté leur part de marché entre **** et ****. McDonald's domine le nombre de restaurants en Allemagne.

5.1 Current Regulation

Regulation (***) No ***/**** from ****. In this framework, the European Parliament and the Council adopted laying down the general principles and requirements of food law in the General Food Law Regulation.

On a national level, pizza goes under the Lebensmittel-,Bedarfsgegenstände- und Futtermittelgesetzbuch (***), which covers food in Germany, and is mostly based on EU regulations and directives. The LFGB provides basic definitions, procedural rules and goals of the German food law. It defines general food safety and health protection rules, addresses labeling requirements, regulates inspection, detention, and seizure rules of suspect food. These rules apply to domestically produced and imported food products alike.

5.2 Regulation Trends

An article by DW reports the willingness of the SPD, the Social Democratic Party (***) to reduce the amount of sugar, fat, and salt in food produced industrially or in fast food restaurants.

Moreover, several legal formalities must be respected to open an independent pizzeria:

First of all, it is necessary to register your company with the registrar of the business concerned. The rates depend on the federal state and the responsible municipality. Registration, which can also be done online, usually costs between ** and ** euros It is also necessary to check the specific requirements of each region in Germany: for example, regular hygiene checks are carried out by the health service but standards vary according to the region concerned The choice of the legal form of the pizzeria is free: individual company, GbR or GbmH (***). Finally, choosing a franchise system is expensive but offers many advantages, such as taking advantage of the marketing measures of the franchisee partner.

Other regulations may also appear depending on each structure. For example, Domino's Pizza has partnered with Flirtey, an American drone delivery company, to launch the pizza delivery by drones in August **** in New Zealand. Domino's Pizza intends to extend this option to six countries ...

6.1 Segmentation

• Pizza Hut Germany
• Vapiano
• L’Osteria
• Lieferando (takeaway)
• HelloFresh
• Delivery Hero - Foodora
• Dr Oetker
• Südzucker
• Südzucker