Goldschläger

Goldschläger
flakey?
by Abram Sauer
March 23, 2009 issue

For decades, Goldschläger, the cinnamon-flavored alcohol with real gold flakes in it, was a strongly branded product. Recently, however, the brand has weakened, and its decline perfectly illustrates the difference between having a strong brand and having strong name recognition. Let’s begin by examining the main characteristics that differentiate Goldschläger from other brands: 1) it contains real gold flakes and 2) … nothing else.

Goldschläger’s brand is not entirely ineffective, but it is limited by its single-platform approach in such a competitive market. The product’s uniqueness is easily replicable and consequently not a great brand strength. For example, if I launched an alcoholic beverage that contained gold flakes and named it Bullionhessë, I would have already replicated Goldschläger’s core brand strength.

In fact, there are several spirits brands that feature flakes of gold, including Danziger Goldwasser and Gold Strike. Gold Rush is a newer brand (presumably launched to capitalize on Goldschläger’s sudden popularity). Until recently, Goldschläger’s dominance over these competitors was largely due to favorable distribution. How many bottle shops need to carry a full line of gold-flake-infused spirits?

Originating in Switzerland and now homed in Italy under the Diageo stable of spirit brands, little can be easily learned about Goldschläger’s beginnings. (Diageo declined to participate in this profile.) What is known is that it is a cinnamon-flavored schnapps and that the gold leaf floating inside amounts to less than a tenth of a gram. Rumors that the gold creates microscopic cuts that speed alcohol absorption have been largely disproved.

Before addressing the deep shift currently going on with the Goldschläger brand, it’s important to note a fundamental paradox Goldschläger faces: price point. The brand could set a price point that would be on par for a beverage with real gold (!) floating around in it (i.e., the Dom Perignon range), but that would likely result in few consumers because—other than flamboyant grotesques like Donald Trump—genuinely wealthy people tend to want their high-end brands more subdued. Yet, by setting a low price point (i.e., its current sub-US$ 30 one), consumers will scrutinize why a drink that’s supposed to have real gold (!) in it costs about the same as a bottle of mass-market tequila.

For many years Goldschläger existed largely as a novelty—that crazy booze with real gold in it! Then came the rise of Jägermeister, a drink with which Goldschläger would come to share much more than umlauts—namely, a future alongside each other on bar shelves everywhere.

Once a German digestive aide, Jägermeister rose to popularity with hard-drinking American youth thanks almost entirely to marketing by the legendary Sidney Frank (who then went on to make Grey Goose vodka and Corazon tequila top-shelf brands). Jägermeister sales in the US went from just over 50,000 cases a year in 1985 to 2.7 million just 20 years later. The originally-dour brand’s unlikely rise, like Pabst Blue Ribbon beer’s recent explosion, has inspired competing brands and attention, with even the Washington Post throwing in its two cents by declaring, “Tuaca soon will be the new Jagermeister.” A bold statement that will almost assuredly mean it will not.

Somewhere along its move from German diuretic and occasional insect trap bait to college fraternity party staple, Jägermeister became entwined with Goldschläger. A bevy of recipes now combine the two into a rogues’ gallery of shots, including the “Oatmeal Cookie,” “Four Horsemen,” “Viking Funeral,” “JägerSchläger,” “Tonya Harding” and “Dead Hitler.” The difficulty of actually doing a Goldschläger shot (due to intense flavor) has also tied its character to Jägermeister’s. The connection to this “scene” has changed the Goldschläger brand identity from one of novelty item to one associated with drinks that end in the word “bomb.” Its rise in popularity has been noted in pop culture as well, where the brand appeared on the hit show The Office ((Dwight: “Goldschläger. Extra flakes.”) and was spoofed in the film Superbad (as “GoldSlick”).

This brand metamorphosis has been puzzling for Goldschläger. In addition to a change to the brand’s identity there is also a power shift in which half of the brand’s owner-consumer relationship is doing the most identifying. Diageo is losing some control of its brand—a common consequence from a boost in business. The real challenge for Goldschläger, however, is to engage its new identity.

In 2003, Goldschläger attempted to court its new demographic. It went poorly. With ads featuring very young men holding Goldschläger bottles and wearing protective equipment like crash helmets and safety goggles, the brand made the invite: “Drinking a shot with friends should be enjoyable. So be careful out there.” Consumer groups were not impressed or amused. Diageo pulled the ads and appears to have learned its lesson, as no others have been forthcoming.

And why should they? Even without conventional advertising, Goldschläger’s popularity benefits from the undercurrents of the in-the-know. One trip through YouTube’s collection of “Goldschläger” related videos is all the promotion the brand needs. This collection even includes a homemade near-genuine ad. The brand is so at peace with its trajectory that it doesn’t even bother maintaining a website (having been “currently undergoing maintenance” for quite some time).

Yet it is a stretch to think that any of Goldschläger’s current market would want to go to their official site. That’s what a Facebook page is for: “Goldschläger... It’s like someone chewed a shit load of Big Red and spit in my mouth. But it’s totally awesome...” Indeed, Tama of Napa, California, indeed.

With that level of customer loyalty, Goldschläger’s brand is poised to become stronger and stronger one shot a time.