East German products survive the test of time (Feature)

By Clive Freeman Oct 20, 2009, 5:08 GMT

   Berlin - During the Communist era, products made in East Germany were often looked upon as shabby and substandard by the West.

And yet, 20 years after the fall of the Berlin Wall, many former East German brands have seen a resurgence in popularity, despite being written off after German reunification.

Times were tough for East German manufacturers after reunification. Thousands of companies went bankrupt or were privatized, putting about 4 million East Germans out of work.

Additionally, East German customers, freed from the restrictions of a Communist regime, suddenly switched their loyalties to brand- name Western goods.    

'People's consumer preferences changed literally overnight,' said Nils Busch-Petersen, a spokesman for Berlin's retail association. 'The good items from respected East German brands sat on the shelves and weren't sold.'

   Western products were known to many people living in the East, either due to Christmas parcels sent by relatives in the West, or as gifts brought back across the Wall.

   Plus, the dazzling array of Western brands was a novelty. People rushed out to get them as soon as they appeared in the East, as the state-run Konsum and HO retail chains were replaced by Western distributors.

   Just a handful of East German companies survived after reunification. One of these was Rotkaeppchen, a manufacturer of sparkling wine based in Freyburg, south of Leipzig, with a history dating back to 1856.

Under Communism, the company was turned into a collective, producing 15 million bottles of bubbly a year. After reunification people initially turned to more glamorous Western labels.

   In 1991, just 2.9 million of the red-topped Rotkaeppchen - Little Red Riding Hood - bottles were sold.

The downward trend was reversed when Gunter Heise, the company's technical director, took over the business with four colleagues in 1993, helped financially by entrepreneur and liqueur manufacturer Harald Eckes-Chantre.

   Subsequent efforts to break into the Western German market were met with great success. By the year 2000, Rotkaeppchen was Germany's market leader, with sales of 50 million bottles a year.

   Indeed, in 2002, Rotkaeppchen bought out of one of its biggest rivals, the Mumm winery, based in the west of the country. It now has a 40-per-cent market share in Germany, with sales totaling 140 million bottles annually. The success is all the more remarkable, as its 650-hectare vineyard is one of the smallest in Germany.

   Looking back, Heise says most people in East Germany were happy to see the Berlin Wall come down ago 20 years ago, but had 'no idea what the economic effects would be.'

   The economic implosion of eastern Germany was so dramatic that experts regard it almost as a miracle that any companies from the East survived at all.    

And yet, Florena cosmetics is another success story. It is based in the former East German town of Waldheim in Saxony where the company employs 350 workers.

Florena's history dates back to 1852, when it drew international attention by inventing tooth soap, one of the forerunners of today's toothpaste.

   By 2006, Florena, now owned by Beiersdorf, had a turnover of 88.8 million euros, selling more than a hundred skin and hand care products.

'Florena's aftershave lotion sells particularly well in the East,' said a Berlin-based business analyst specializing in eastern products.

   Once initial excitement about Western goods levelled off, many East Germans went back to buying traditional Eastern products, such as Burger crispbread, Spreewald gherkins, Spee laundry detergent, F6 cigarettes, Club Cola, Nordhaeuser liqueur and Radeburger beer.

   Surveys conducted in the former East Germany in the late 1990s showed that just 2 per cent of those asked said they preferred Western products to locally produced ones.

There has even been talk of a revival for Trabant, the iconic, smoke-belching Cold War-era East German automobile - albeit as an electric car.

   Herpa, a German model car manufacturer, plans to introduce a modern, environmentally friendly version of the 'Trabi' by 2012.

The company says the relatively light car will be equipped with a rooftop solar panel to recharge its battery. This will give it a range of about 250 kilometres.

   The car will retain the boxy look of the original, of which more than 3 million were built between 1957 and 1991.

   Daniel Stiegler, a Herpa company spokesman, said he hoped the reinvented Trabi would straddle old and new, as a stylish car with a history, and 'electrically powered, because that is the trend.'