Simon Usborne raises a glass to the Jägermeister phenomenon

Paul is an engineering student at Oxford Brookes University. I meet him on a sticky dancefloor at Lola Lo, a Hawaiian-themed nightclub in the city centre. It's Tuesday night before the Easter break and the club is hosting an 'Easter Bunny Jäger Rocks rave'.

My cousin, Polly, a first-year anthropology student, had sent me a Facebook flyer, and suggested I join her to observe the relationship between young people and Jägermeister. I wanted to find out how an obscure herbal concoction once favoured by Nazi hunters had sprung from nowhere to become Britain's de-facto national drink. The flyer promised, among other things, 'Easter bunnies handing out free choc' and, remarkably, '£1 Jägerbombs all night'.

Paul, whose Facebook page reveals his official 'like' of Jägerbombs (as well as Scarface, Top Gear and something called 'The Lad Bible'), clutches a miniature plastic bucket. What is it?

"Jäger Shark bucket!" Paul replies. A Jäger Shark bucket, I learn later, contains four shots of Jägermeister topped up with Shark energy drink, an alternative to Red Bull. Paul says it also contains vodka, but it's not supposed to. Either way, it's designed to be shared, but Paul has one straw. "It's my third, and I'll probably have another one," he says.

At the edge of the dancefloor, Andy is wearing a dinner jacket. He's come straight from his student-union awards, where his biology society won a prize. He stands holding a Jägerbomb in front of the DJ, a man called Bungle Beats. Andy says that he likes Jägerbombs so much that he recently competed in a Jägerbomb challenge in Swindon, where he's from. "I did 12 of them in 10 minutes," he says. How did he feel? "A bit funny at first – but after that it was a normal night."

A Jägerbomb, if you're over 35 or haven't been to a nightclub, wedding, office party, hen party – any party – in the past five years, is an explosive combination of Jägermeister and carbonated energy drink, usually Red Bull. Bars typically serve the liqueur in a shot glass submerged in a larger glass containing the Red Bull. You mix the elements and down them in one, probably in time with several other people, probably while wincing, and probably while already quite drunk. The Jägermeister gets you drunker still, while the caffeinated Red Bull increases alertness, making further rounds likely.

In Oxford, barmen dispense with any glass-in-glass ceremony. I shout my order of four bombs for me, Polly and her friends, Kat and Kurt. Energy drink is squirted into plastic cups and the Jägermeister sloshed in with a shot measure. That's it. The actual price – £4.50 – flashes up on the till, but I pay £4 for four. It may as well be water. (When I ask another student why he bought a double Jägerbomb, he replies: "Well, it fills up the cup a bit".) Back on the dancefloor, Bungle plays "Titanium" by David Guetta as we clink plastic and drop our bombs. Mine tastes like sick come early. I start dancing.

Scenes like these are replicated every night across Britain. Where there is loud music and a will to get drunk, someone, at some point, will get in a round of Jägerbombs. Bomb culture breaks through all social and economic divides. Prince Harry reportedly knocked them back in that Las Vegas hotel suite. Stephen Fry drank Jäger at The Hobbit wrap party. Cheryl Cole is a fan. Rory McIlroy reportedly downed bombs from the Ryder Cup while celebrating Europe's victory in 2010. During af subsequent night out, the golfer tweeted '5 jägerbombs before midnight!!! #goingtobealongnight', following up later with 'Up to 10 now!!' and, the next morning – 'Jägerbombs 1 Rory 0'.

For some, they aren't explosive enough. I know of a man who drinks a 'bombjäger', in which the normal quantities are reversed. Chris Stark, a sidekick on the Scott Mills show on Radio 1, meanwhile, introduced millions to the 'lad bomb' last month when the 25-year-old invited the Hollywood actress Mila Kunis to drink them with his mates. A lad bomb, he told her, involves dropping the Jägermeister shot into a double vodka and Red Bull. "Oh my God," Kunis replied, in an interview that soon went viral, "that sounds like the worst drink ever."

The bomb trend has fuelled rocketing sales of Jägermeister in Britain. The day before my Oxford outing, I sit in a dimly-lit conference room inside the headquarters of Mast-Jägermeister. The company, which is still owned (but not run) by the Mast family, has been making the drink here in Wolfenbüttel, near Hanover, for almost 80 years. It remained a German oddity for much of that time, occasionally glimpsed by outsiders on school trips or in ski resorts. But a company graph charting UK sales tells a new story. Last year, Britain got drunk on 4.4 million litres of Jägermeister, equivalent to 6.3 million standard bottles (or almost 180 million shots). Five years previously, we managed fewer than 700,000 bottles, and only 70,000 in 2003. According to industry analysts CGA, Jägermeister is now the third-bestselling spirit in the country, beaten only by Smirnoff Red vodka and Jack Daniel's whisky.

For Jägermeister, figures like these spell huge profits and global sales of almost 90 million bottles in 90 countries. But they're also alarming. Marcus Thieme, Jägermeister's head of Western Europe, explains why over lunch in the company canteen. When he was at university (he's now 38), Thieme remembers everyone drinking Apfelkorn, a sweet, apple-flavoured schnapps. Today, he says: "If somebody were to offer me one, I couldn't even look at it. I drank too much of it".

The tastes of young people seeking to get drunker faster are, unsurprisingly, fickle. Thieme is quick to point out that Jägermeister has never promoted the Jägerbomb, the origins of which are suitably hazy. But while it has boosted profits, the company is acutely aware that drinkers will eventually get sick of it. Red Bull, who declined to talk to me, has thrust wings upon the brand, and Jägermeister is scared of falling. "We have a short time now before drinkers say goodbye to us," Thieme says. "We have to give them reasons to stay."

Education forms part of Jägermeister's preparations for the inevitable post-bomb fallout. Would Prince Harry or the students in Oxford down the liqueur with such abandon if they knew its story? Thef coincidence of my interest and Jägermeister's new mission means my request for a visit is well received. I stay a night at the Jägermeister Guesthouse, a company hotel a notch above a Travelodge. Arriving too late to find locals in a bar in Wolfenbüttel (population 50,000, all asleep by 11pm), I retire to my room and chase Jägermeister chocolates (surprisingly good) with Jägermeister miniatures from the mini-bar.

A frigid east wind whips company flags outside the steel-and-glass HQ on Jägermeisterstrasse the next morning. Deep inside the building, where the alcohol fumes are so thick that phones are forbidden lest they spark an explosion, the door opens to a room usually off-limits to outsiders. Marked 'Sensorik', or tasting room, it's separated from daylight by layers of high security and emergency flood barriers. Inside, Daniel Wresinski, a master distiller, pulls back a swivel chair at one of six booths. "Would you like to try?" he asks.

Two glass snifters stand on a lightbox. One contains Jägermeister. The other contains grundstoff, or base, a darker and more alcoholic liquid made from the macerated remains of 56 herbs, blossoms, roots and fruits. I raise the snifter to my nose. "You are looking for the star anise and bitter orange, the dominant part of the bouquet," Wresinski says. I feel immediately light-headed as the vapours threaten to depilate my nostrils. I take a sip. It's raw, bitter, spicy, agricultural.

Wresinski and his team do this every morning, checking the quality of the latest batches of grundstoff and finished Jägermeister. Production starts weeks earlier, with sacks of raw materials including saffron, cinnamon, liquorice, and lavender. They are blended and steeped in water and neutral alcohol. The boozy soup is then filtered and left to mature for a year inside one of 450 vast oak barrels in the building's cellars. Caramel and sugar are added to the base, along with more alcohol and water, before the liquid is filtered again and bottled.

The recipe, full details of which are secret, has not changed since 1934. Up in the conference room, the slideshow moves on to the drink's history – or, at least, the version that doesn't mention the war. In 1878, Wilhelm Mast founded a vinegar and wine company in a building that still stands in Wolfenbüttel (it's round the corner from the official Jägermeister shop, where you can buy branded shot glasses, toasters and bikinis). Trade was tough when Wilhelm's son, Curt Mast, joined the business in the early 1930s and set about concocting a kräuterlikör (herbal liqueur) of the sort that had been used as medicine for centuries. By now, Wolfenbüttel and its surrounding hills were a popular hunting retreat among the senior ranks of the Nazi party. Hermann Göring, later Hitler's number two and commander of the Luftwaffe, was a regular and, by many accounts, knew Mast, a fellow huntsman.

When the Nazis came to power in 1933, Göring was appointed interior minister. He soon pushed through laws to create regional jägermeisters, or masters of the hunt, who would meet in grand lodges for lavish parties. Göring appointed himself Reichsjägermeister (his Reichsjägerhof, or lodge, still stands seven miles north of Wolfenbüttel). Spying a market for his drink, Mast named it Jägermeister and created a robust bottle in hunting green with a gothic typeface. For the logo he chose the mythical deer with a beaming cross between its antlers that had, according to legend, appeared before Hubertus, the patron saint of hunting, converting him to Christianity. When the British excused Mast his Nazi patronage after the war (he had earlier distanced himself from the party), he was allowed to carry on making Jägermeister. The bottle's design has barely changed since.

It's quite a leap from Göring's lodge to Lola Lo. It can be attributed to patience, fortune and smart marketing. The official history picks up again in the early 1950s, when Günter Mast, Curt's nephew, came into the business. He later achieved fame for Jägermeister when it sponsored sports teams, including a big local football club. But while sales responded, Jägermeister would become increasingly associated with older drinkers. In stepped Sydney Frank, a cigar-chomping New York entrepreneur. When he noticed the residents of Manhattan's old German district sipping a strange drink, he somehow saw its potential as a party shot for young people. He ordered his first batch in 1974 and took bottles to bars in New York and New Orleans, later dispatching scantily-clad ambassadors he called Jägerettes. Word spread about the drink's mysterious power, its Nazi-era label only adding to its mystique on college campuses, along with rumours that it contained elk's blood. When a Louisiana newspaper likened it to Valium, sales soared higher still.

Frank got very rich (and richer still in 2004, when he sold his Grey Goose vodka brand for $2.3bn), but by the time of his death in 2006, Britain had not yet fully embraced the brand he transformed. The seeds were being sown, however. Copying Frank's word-of-mouth approach, Cellar Trends, Jägermeister's UK distributor, was sending bottles to barmen and sponsoring rock gigs and tours, shipping cases to the bands' dressing rooms. Jägerettes were deployed. With no demands from HQ for instant results, word was allowed quietly to circulate. The brand's biggest asset was its weirdness. Marcus Thieme explains: "When people ask what Jägermeister is like, you have to say, well, I can't describe it. Nobody can say, oh, it's another vodka or another rum. You have to try it so it becomes like a viral video – it starts small and then spreads."

Andrew Knowles is co-founder of JKR, a London-based branding and packaging design agency. His clients include Guinness and Bacardi. He says Jägermeister's rise defies all industry conventions. "It doesn't fit with the trend towards luxury goods, sophistication and minimalism that has ruled for more than 20 years," he explains. "No marketeer could come up with it and it would never survive a focus group. But that's its virtue – modern consumers want to feel as if they've discovered something. They want authenticity, and Jägermeister reeks of it."

But it also reeks of Red Bull, which brings us back to the bomb problem. Viral success brings fast profits but not control. Estimates of the proportion of Jägermeister consumed with Red Bull vary. Thieme optimistically puts it as low as half. Joe Ryan, the director of Aura Mayfair, a high-end London nightclub, says it's 99 per cent. Jägermeister now accounts for 40 per cent of his shots revenue (he bought 133 bottles in 2010, and 529 in 2012). Bombs there cost £10 but are in such demand that Ryan has ordered special one-piece glasses that magically keep the elements separate until the drink is downed. "It's a gimmick," he says. "If a group of girls does a round of Jägerbombs at one end of the bar, everyone will do it – it's a domino effect."

But Jägermeister doesn't like it. As part of its response to the bomb explosion, it is investing millions in its first UK advertising campaign, targeted primarily at 25 to 34-year-olds. Billboards started to appear in November and big-budget TV ads are due later this year. The posters feature a large, chilled bottle alongside two frosted shot glasses set against star anise and cardamom pods suspended in ice. 'Give it a Shot' the slogan reads above the tagline, 'It runs deep'. The campaign manifesto, which has not been made public, goes further. 'What is Jägermeister?' it asks. 'A dark and complex blend of 56 ingredients steeped in legend and mystique… This is no cheap shot for shallow friendships. It's a toast to bonds that are deep, meaningful and true.'

To help to "lead the consumer by the hand", as Thieme puts it, from bombs to shots, Jägermeister UK is distributing hundreds of branded tap machines to bars. A Sydney Frank innovation, the bar-top freezers support, and show off, three upturned bottles of Jägermeister. A tap draws the liqueur at -18C for the 'perfect serve'. I use an official phone app to find one of the 4,500 bars in Britain that so far have a tap. At The Prince in Brixton in south London, where I live, the machine sits at the back of the bar like a neglected breadmaker. I order a £4.50 shot, which comes not in the chilled glass from the ads but a disposable plastic pill cup. Even so, it's a lot more pleasant than a lukewarm Jägerbomb.

The campaign is also a response to Jägermeister's legal obligations to promote responsible drinking. Nicole Goodwin, marketing manager for Jägermeister UK, almost audibly recoils on the phone when I tell her about the bombs and buckets at Lola Lo. "Yikes, it's so hard to keep on top of this," she says. "Let me have a look into it." The brand's biggest PR challenge came last year when Gaby Scanlon celebrated her 18th birthday at a bar in Lancaster by downing a 'Jägermeister Nitro'. Liquid nitrogen is sometimes added to cocktails to create a dry-ice smoke effect but is dangerous when not fully evaporated. The -196C liquid left in Scanlon's drink burnt through her stomach, which had to be removed in emergency surgery.

Marcus Thieme was on holiday when the incident was reported around the world. "I knew it was not going to be a good day," he recalls. It got worse when Dr John Ashton, director of public health for Cumbria, called Scanlon "the victim of an irresponsible alcohol industry that's now competing on gimmicks". Jägermeister prepared a statement saying it never endorsed drinks like Scanlon's. Thieme says responsibility for sensible drinking must lie with pubs, bars and clubs. "If they serve people who are really drunk and make a profit by serving them another one, that's totally against our brand," he says. Jägermeister would sacrifice sales in return for a stronger, more sustainable image, he adds.

Jägermeister faces another growing threat in the inevitable emergence of cheaper alternatives. Competitors include Jungfrau and Zeigerberg, a 'herbal schnapps' that comes in a green bottle with a gothic typeface. They are legal but Jägermeister estimates bars passing them off as the real thing swallow 10 per cent of potential sales. At Lola Lo, which hosted a student night called 'Smut!' the night after my visit (Jägerbombs went up to £2), I watched barmen crack open real bottles. A spokesman for the club's parent company, Eclectic Clubs & Bars, confirms this, adding in a statement: "The responsible retailing of alcohol is of paramount importance to us." He wouldn't reveal how much profit (or loss) the club made on £1 Jägerbombs.

In Wolfenbüttel, I'm still curious to know how Germans drink their only spirit of note. The country accounts for 20 per cent of sales but the Jägerbomb never really caught on (Thieme suggests better knowledge of the brand's history is part of the reason). A waiter in a Chinese restaurant mixes his with orange juice. Daniel Wresinski, the distiller, prefers his with tonic or bitter lemon, sipped at barbecues in his garden. Thieme likes it with ginger beer and lime, a sort of Jäger mule.

But not all Germans are fans. While a domestic marketing campaign has revived Jägermeister's image among young drinkers, it has left many others behind. Kay, who is in his fifties, serves tables at Floreans, a café near the town square. What does he think of Jägermeister? "Now it's for young people," he says. "In America they drink it and don't know where it's from. We know where it's from but now we don't drink it."