diff --git a/README.md b/README.md
index b9339c74..c01e7414 100644
--- a/README.md
+++ b/README.md
@@ -90,7 +90,7 @@ If you don't use certain feature sets of grocy (for example if you don't need "C
 - When the file `data/custom_css.html` exists, the contents of the file will be added just before `</head>` (end of head) on every page
 
 ### Demo mode
-When the file `data/demo.txt` exists, the application will work in a demo mode which means authentication is disabled and some demo data will be generated during the database schema migration.
+When the `MODE` setting is set to `dev`, `demo` or `prerelease`, the application will work in a demo mode which means authentication is disabled and some demo data will be generated during the database schema migration.
 
 ### Embedded mode
 When the file `embedded.txt` exists, it must contain a valid and writable path which will be used as the data directory instead of `data` and authentication will be disabled (used in [grocy-desktop](https://github.com/grocy/grocy-desktop)).
diff --git a/app.php b/app.php
index c4c54df7..491b1a54 100644
--- a/app.php
+++ b/app.php
@@ -19,20 +19,6 @@ else
 	define('GROCY_DATAPATH', __DIR__ . '/data');
 }
 
-// Definitions for demo mode
-if (file_exists(GROCY_DATAPATH . '/demo.txt'))
-{
-	define('GROCY_IS_DEMO_INSTALL', true);
-	if (!defined('GROCY_USER_ID'))
-	{
-		define('GROCY_USER_ID', 1);
-	}
-}
-else
-{
-	define('GROCY_IS_DEMO_INSTALL', false);
-}
-
 // Load composer dependencies
 require_once __DIR__ . '/vendor/autoload.php';
 
@@ -40,6 +26,12 @@ require_once __DIR__ . '/vendor/autoload.php';
 require_once GROCY_DATAPATH . '/config.php';
 require_once __DIR__ . '/config-dist.php'; // For not in own config defined values we use the default ones
 
+// Definitions for dev/demo/prerelease mode
+if (GROCY_MODE === 'dev' || GROCY_MODE === 'demo' || GROCY_MODE === 'prerelease')
+{
+	define('GROCY_USER_ID', 1);
+}
+
 // Definitions for disabled authentication mode
 if (GROCY_DISABLE_AUTH === true)
 {
diff --git a/changelog/55_UNRELEASED_2019-xx-xx.md b/changelog/55_UNRELEASED_2019-xx-xx.md
index 0ca3215f..f851ed91 100644
--- a/changelog/55_UNRELEASED_2019-xx-xx.md
+++ b/changelog/55_UNRELEASED_2019-xx-xx.md
@@ -33,6 +33,7 @@
 - Fixed that the meal plan menu entry (sidebar) was not visible when the calendar was disabled (`FEATURE_FLAG_CALENDAR`) (thanks @lwis)
 - Slightly optimized table loading & search performance (thanks @lwis)
 - For integration: If a `GET` parameter `closeAfterCreation` is passed to the product edit page, the window will be closed on save (due to Browser restrictions, this only works when the window was opened from JavaScript) (thanks @Forceu)
-- The `update.sh` file had wrong line endings (DOS instead of Unix)
+- Fixed that the `update.sh` file had wrong line endings (DOS instead of Unix)
+- Internal change: Demo mode is now handled via the setting `MODE` instead of checking the existence of the file `data/demo.txt`
 - New translations: (thanks all the translators)
   - Portuguese (Brazil) (demo available at https://pt-br.demo.grocy.info)
diff --git a/config-dist.php b/config-dist.php
index 9df72f0b..95dfbc32 100644
--- a/config-dist.php
+++ b/config-dist.php
@@ -15,7 +15,8 @@
 
 
 # Either "production", "dev", "demo" or "prerelease"
-# ("demo" and "prerelease" is reserved to be used only on the offical demo instances)
+# When not "production", authentication will be disabled and
+# demo data will be populated during database migrations
 Setting('MODE', 'production');
 
 # Either "en" or "de" or the directory name of
diff --git a/controllers/SystemController.php b/controllers/SystemController.php
index 54cdb252..b212c001 100644
--- a/controllers/SystemController.php
+++ b/controllers/SystemController.php
@@ -22,7 +22,7 @@ class SystemController extends BaseController
 		$databaseMigrationService = new DatabaseMigrationService();
 		$databaseMigrationService->MigrateDatabase();
 
-		if (GROCY_IS_DEMO_INSTALL)
+		if (GROCY_MODE === 'dev' || GROCY_MODE === 'demo' || GROCY_MODE === 'prerelease')
 		{
 			$demoDataGeneratorService = new DemoDataGeneratorService();
 			$demoDataGeneratorService->PopulateDemoData();
diff --git a/middleware/ApiKeyAuthMiddleware.php b/middleware/ApiKeyAuthMiddleware.php
index f8a4de08..1dd238ed 100644
--- a/middleware/ApiKeyAuthMiddleware.php
+++ b/middleware/ApiKeyAuthMiddleware.php
@@ -22,7 +22,7 @@ class ApiKeyAuthMiddleware extends BaseMiddleware
 		$route = $request->getAttribute('route');
 		$routeName = $route->getName();
 
-		if (GROCY_IS_DEMO_INSTALL || GROCY_IS_EMBEDDED_INSTALL || GROCY_DISABLE_AUTH)
+		if (GROCY_MODE === 'dev' || GROCY_MODE === 'demo' || GROCY_MODE === 'prerelease' || GROCY_IS_EMBEDDED_INSTALL || GROCY_DISABLE_AUTH)
 		{
 			define('GROCY_AUTHENTICATED', true);
 			$response = $next($request, $response);
diff --git a/middleware/SessionAuthMiddleware.php b/middleware/SessionAuthMiddleware.php
index 5cf436cc..adad241f 100644
--- a/middleware/SessionAuthMiddleware.php
+++ b/middleware/SessionAuthMiddleware.php
@@ -25,7 +25,7 @@ class SessionAuthMiddleware extends BaseMiddleware
 		{
 			$response = $next($request, $response);
 		}
-		elseif (GROCY_IS_DEMO_INSTALL || GROCY_IS_EMBEDDED_INSTALL || GROCY_DISABLE_AUTH)
+		elseif (GROCY_MODE === 'dev' || GROCY_MODE === 'demo' || GROCY_MODE === 'prerelease' || GROCY_IS_EMBEDDED_INSTALL || GROCY_DISABLE_AUTH)
 		{
 			$user = $sessionService->GetDefaultUser();
 			define('GROCY_AUTHENTICATED', true);