State of the German horticultural industry

Despite a reduction in energy costs and inflation, the german horticulture industry continues to be hampered by diminished consumer demand and confidence.

Brandenburg Gate Berlin

As the reported in Flora Culture International, the German market seems in a similar predicament to the UK. Slower than anticipated economic recovery due to the ongoing market volatility, global political unrest, subsequent struggling world trade alongside high interest and inflation rates.

Most german industries, including the (ornamental) horticulture industry couldn’t escape from the subsequent negative impact. That said, despite the downturn, horticultural proved to be relatively more stable than other industries as the declines have not been as severe. As is the case in the UK, there is growing interest in gardening and greening of spaces for the benefit of nature, health and well-being. Prospects for the longterm therefore provide a more positive outlook of 21% growth (EUR 17.7 billion) by 2030.

In the meantime however, German consumers are cautious with their spending, including on plants and flowers which continued on a downward spiral. The Federal Statistics Office Destatis estimates that per capita spend for 2023 was €102, down from €107 in 2022 and down from €108 in the pre-covid 2019. The German Institute for Economic and Social Research (WSI) indicate that German purchasing power is declining despite rising wages. The average wage increase if 5.6% in the first half of 2023 was offset by the 7.4% price increases for consumers, resulting a decline in real wages. Today, inflation in Germany is slightly receding with wages up on consumer prices. According to data from the Federal Statistical Office, the inflation rate in November 2023 fell to 3.2 per cent – the lowest since July 2021.

Export statistics from the Dutch industry body VGB and market analyst Floridata indicate a reduction plant and flower imports from the Netherlands at the start of 2024. 2023 numbers already indicated a reduction of 2.3% from €1,767m in 2022 to €1,709m.

Germany’s cut flower market was valued at €3bn in 2023, down 3% from 2022. While in 2022, the trend was towards buying flowers locally, the market returned almost back to normal in 2023, with imported flowers dominating the supply chain. In 2023, Germany was again one of the world’s largest importers of cut flowers. The most significant supplier was the Netherlands accounting for almost 85% of the supply, followed by Italy, Kenya, Ethiopia, Costa Rica and Israel.

The weather too, didn’t prove conducive for spending on plants. A wet spring, warm summer, warmest September on record and overcast October hampered plant sales. There was a reported small upward trend in houseplant sales in spring, indicating that the German population spent more time indoors. Though, over the year the german houseplant market did experience a 5% decline in 2023, with a market value of €1.5 billion.

Garden plants, bedding and patio plants which account for 20% of the total market were down by 5% (y-o-y) up to and including September 2022. Woody plants, accounting for 16% were down 3% on 2022. Representing 6% of the market, sales of perennials were down 4% and flower bulbs, which represent 3% of the market, down 5%.

The market is experiencing consolidation, as the number of businesses has reduced considerably but their average size has increased. The latest figures from the German government’s farming statistics (as published in AIPH’s International Statistics Flowers & Plants) indicate grower caution as 6,263ha of flowers and plants were grown under protection and in the open field in Germany in 2021 compared to 6,588 ha in 2017. The area down to nursery stock production was 7,235ha in 2021.