East German Brands See Nostalgia 20 Years After the Wall's Fall

Wines, Sneakers, Cosmetics Thrive Despite Communist Associations

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LONDON (AdAge.com) -- On Nov. 9, Germans will celebrate the 20th anniversary of the fall of the Berlin Wall, and many of them will be raising a glass of the country's most popular sparkling wine, Rotkaeppchen, as they toast the achievements of 1989.

Rotkaeppchen sparkling wine
Rotkaeppchen sparkling wine
The name means Little Red Riding Hood, and the brand is one of many former German Democratic Republic products that have survived and thrived in a unified Germany, helped along by a wave of nostalgia -- or "ostalgie" -- for all things associated with its communist past, but maintained in the long term by good old-fashioned capitalist marketing principles.

When the wall came down, East Germans flocked to buy the famous brand names they had been denied for so long. Consumer preferences changed overnight, but 20 years later many of its former citizens once again crave the comfort of the goods they grew up with, and are proud of the quality and value they represent. As a result, there's a renewed interest in Communist-era products from sneakers to coffee to face cream.

Rotkaeppchen is a good example of product durability in the face of political flux. It operated as a collective during the Communist era, when it became the drink of choice for party leaders and sold 15 million bottles a year. Sales tumbled along with the wall, and were down to just 2.9 million by 1991. But the company's fortunes have turned around and it now sells 149 million bottles a year, claiming a 40% share of the German sparkling-wine market.

A spokeswoman for the brand was keen to keep a distance from Communist associations, even though Rotkaeppchen has a higher market share in the east than the west. She said, "Like most sparkling wines, Rotkaeppchen was invented in the 19th century, so our 40 years under communist rule is just an episode in our history."

Marketing has been a big factor in the success of the $10-a-bottle fizz, which the company positions -- mostly through PR and in-store opportunities -- as a wine for all occasions, encouraging people not to think of it as a celebration tipple but as an everyday treat.

Joerg G. Fieback
Joerg G. Fieback
Asked if Rotkaeppchen was planning any campaigns specific to the 20th anniversary celebrations, the spokeswoman said that "We are marking one of the big historic successes of democracy; it's an occasion that belongs to every citizen and we wouldn't abuse it by marketing one individual product."

After the wall came down, East German brands struggled, but it was not long before people from the old GDR recognized that they were not all bad. Jeorg G. Fieback, CEO of Zebra advertising agency, said, "After all, they are still brands, and they have always and will always convey some identity to the people that have spent most of their lives in the old GDR. A lot of people are proud to be able to produce and buy brands that can compete with western brands. They play a critical role in their self esteem."

Gunnar Brune, managing director of Lowe Germany, said, "The time is right to take a look back at what brands kept their value or even grew in value after the fall of the wall. Consumer brands like Spee and Florena have been bought and adapted by the [fast-moving consumer goods] giants. There are also cult GDR brands, especially the cycling brand Diamant, which has a very good reputation. But it's not all about nostalgia -- it's remarkable that the consumer's life, needs and iconography has more continuity than the political systems."

East German brands had a difficult time getting established in West Germany, which was already brand-saturated when the wall came down, but some did break through. Mr. Fieback said, "Innovation is a great door opener. Bautzner Senf [now Germany's best selling mustard] developed a new spread that not even western mustard producers had in their portfolio, making it easier to get listed in supermarkets, and leverage the spread's success to sell the standalone mustard."

Spee was the GDR's top-selling washing powder, boasting an 80% share of the market. In 1990 it was bought back by Henkel (which had owned it before the Wall went up) and was introduced to modern marketing.

Henkel gave Spee a brand icon -- a cartoon fox -- and positioned it as a high-quality, low-price detergent. It has convincingly made the crossover into a mainstream pan-German brand and is now the second-biggest washing powder in Germany, behind another Henkel brand, Persil. Like the other success stories, Spee's marketing strategy is based in the here and now, but still respects the brand's history.

A Henkel spokeswoman said, "There is a nostalgia for products. People are holding onto their memories. For many East Germans everything changed so quickly, it was like suddenly living in another country. It's important to have something from your youth that you can still live with and appreciate."

Florena was known as "the Nivea of the East" and -- appropriately enough -- was bought up by Nivea owner Beiersdorf after reunification. The company has continued to invest in the brand, which now extends into nearly 100 products and is promoted as a natural, uncomplicated range. The endline translates as "Pure care and nothing else".

Despite its success -- it's the No. 1 hand cream across Germany -- Florena, like most former GDR brands, is still stronger in its eastern heartland, where market share is 26% vs. 12% in the west.

Another big success story from the GDR is Zeha trainers, once known as "the Adidas of the East," which were swiftly cast aside by East Germans as soon as they could get their hands on the real thing. The brand, which made athletic shoes for all the Eastern Bloc national teams in the 1960s, ceased production in 1993, but was resurrected in 2002 by two designers who turned the shoe of their youth into a modern-day sports label, Zeha Berlin.

Zeha's retro styling has made the brand popular again, and trainers retail at around $150 a pair, selling from a shop in Berlin's most expensive shopping area, as well as from stores in Tokyo and New York.

There is also a plan to relaunch the Trabant, which was the most popular car in the GDR, famous for having a 12-year waiting list. These vehicles have a cult following, and are affectionately remembered for carrying streams of East Germans across the border in 1989. If it goes ahead, the modern version will be very different from the fume-belching original: It will be powered by an electric engine and solar panels on the roof.

That brands such as Rondo coffee and Bautzner Senf mustard have thrived in modern Germany is quite an accomplishment, given that more than 14,000 East German companies closed soon after reunification, many of them household names.

Zebra advertising has both Rondo and Bautzner on its client list. The agency's digital director, Torsten Liebig, said, "It's important that the brands are still recognizable, but at the same time, the packaging and marketing have to be modern. There are very few brands from the east that succeed across the entire country, because -- politically and culturally -- West Germans were taught that they were superior."

Far from wallowing in nostalgia, marketing has encouraged a reappraisal of the former GDR brands: Brands can't rely on sentimentality, because each new generation has a little less affiliation to the old GDR products.

Mr. Liebig, who was a 10-year-old living in the GDR when the wall came down, added, "People think back and remember that although the politics was bad, it wasn't all bad. It's humiliating to say that everything was bad from back then -- the products are something to be proud of, and if you make them new you give people pride in their history."

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