EASTERN BRANDS PROVE TENACIOUS

FRANCESCA BUGLIONI

BERLIN (FNS) -- Consumer goods from former East Germany are proving remarkably resilient three years into German reunification. Despite the onslaught of privatization and market forces, some are thriving, thanks to relaunches, redesigns and new investments.

New products with traditional names seem to offer maximum marketing appeal. Club

Cola, East Germany's answer to "The Real Thing," had been mass-produced by an iron-curtain kombinat, or socialist industrial enterprise, since 1969. As part of privatization, it was sold by the Treuhand, the government agency set up to oversee privatization of former East German state assets, to West Germany's largest soft drink producer, Dortmund's Brau und Brunnen AG, which set up a new company, Spreequell, in 1990.

Quick off the mark, Spreequell relaunched Club Cola with a marketing campaign, as well as producing Germany's first clear cola, Club Cola White. "We kept an East image to sell a new, better product and used the old name," said Michael Marquardt, Spreequell's marketing manager.

With slogans such as "Hurrah, I'm still here. Club Cola -- Our Cola," the aim was to appeal to as many of the old customers as possible, complete with a touch of humor.

Although consumption is down from 300 million liters before the fall of the wall to 30 million today, this is not a surprise, considering "Coca-Cola's massive popularity in East Germany,." Marquardt said. Nevertheless, with a 95% market share in East Berlin for its overall range of soft drinks and 53% in West Berlin, this is a company that has gone far in three years.

Shortly after monetary union, the old East German products faced distribution problems, ceding the initiative to faster-moving Western supermarket chains that brought their own product ranges into the East. It took Eastern manufacturers more time to adjust to the new market economy rules and enter the new distribution system. When they did, they found former East Germans' taste for familiar brands was not lost and demand for known Eastern products soon resurged.

The opening of small shops that specialized in Eastern "regional" products was one sign of market response. Now many of the old East German household names, especially foodstuffs, are back on the supermarket shelves. Among some of the clear market winners are Rotkappchen, the most popular sparkling wine; Spee home detergent, and Florena, a skin cream also known as the Nivea of East Germany.

Florena products have rebounded since market share plunged to 2% immediately after the wall's fall. "East Germans needed, at first, to try out for themselves the forbidden Western goods," said Heiner Hellfritzsch, one of the three new managing directors of Florena Cosmetic GmbH, which converted from a state-run cosmetics monopoly through a management buyout in 1992.

With a 12% market share in face creams in the East, Florena's sales figures are beaten only by Nivea.