Do things look black for Guinness?
Does Guinnes have a stout future, or is the venerable brand down...
Does Guinnes have a stout future, or is the venerable brand down to the dregs? We asked the people who should know.
- Duration: 10 mins
- Published on: Friday 22nd June 2007
- Introductory Level
- Posted under: Business Studies
Brian Duffy, Global Brand Director for Guinness:
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The declining market for Guinness in Ireland
Our sales have suffered in Ireland over the last several years. Largely due, I would say, to the demographic changes and lifestyle changes that have taken place in Ireland. Ireland’s a relatively small country, five million people. We enjoy great support there, but the country, itself, as I think you probably know, is enjoying extraordinary economic development in recent years, and that's led to very significant changes in people’s lifestyles in terms of how they spend their time, where they spend their time. And that's affected their time in the pub, which is traditional heartland for Guinness, and there's been a knock-on effect on Guinness consumption within Ireland as a result of that.
The possible closure of St James’ Gate brewery
I often talk to my colleagues and say oh the papers on about St James’s Gate again, you know, and my exhortation to them is get very worried if people aren’t concerned about things like St James’s Gate. We have a unique facility there. And the relationship between the consumer and Guinness is one where you don’t just change things like that willy-nilly. And, as I say, we will be taking into full consideration the fact that our consumers love St James’s Gate. I sit in it every day and I love it myself. But we’ve got to plan for the future and we’ve got to plan on capacity for the future and that's what we’re doing.
Finding new markets for Guinness
When I first moved into this role, I hadn’t been involved with Ireland, in particular, up until about three years ago. As I looked at the sort of Guinness footprint around the world, very clear that we had a dependence, perhaps, an over dependence on the traditional mature markets of Britain and Ireland. And that's great because we enjoy strong support there and great business. And, however, for an international beer brand such as ours, and indeed in a world which changes, it seemed to make a lot of sense for us to change our emphasis and spread our bets if you like.
The importance of Africa
Our exports to Africa began, I think, officially in 1801 when we exported to Sierra Leone, and the third brewery that we ever built worldwide was actually built in Nigeria in 1963. So Africa’s not a new phenomenon for us, we’ve been doing business there for many, many years. I think what has changed over recent years is the spread within Africa and also the growth we’ve enjoyed in developing markets, and just recently Nigeria became our second biggest market in the World. Now it's a population of, I think, around hundred million people, against a population in Ireland of five, so if we can produce the relative love and affection for the brand in Nigeria that we have in Ireland then we’ve got a mighty business model.
The risk of losing the ‘Irishness’ of Guinness
Ireland is really important to us, it’s our spiritual home, and however it’s 5 million people, and there’s a big world out there. And it’s the world that we want to participate in. So we’re not changing any of our core beliefs about the brand but we’re just taking the brand to more and more markets, and that would appear to make absolute sense.
Julian Spooner, Guiness's Marketing Strategy Director between 1995 and 1998:
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The role of advertising
It’s really quite difficult if you’re a 19 or 20 year-old in the pub, with all your mates, who are all drinking lager, to then go off to the bar and order a pint of Guinness for the first time. It takes quite a lot of courage to do that. You’ll get asked why you’re ordering something different and why you’re ordering that black stuff that none of them seem to drink, and so one of the roles of advertising is to make it okay to do that and to give them an answer to that question. You know, I’m buying Guinness because it’s a cool drink or because I like the advertising or I thought I’d try it, and that's a key role for the advertising which is to give permission.
The target market for Guinness
The majority of Guinness sales are to a very small group of very loyal Guinness drinkers. Then there's a long tail of very infrequent drinkers, and those are the people who generally are targeted by the Guinness marketing programme. Because the Guinness loyalists will continue to drink Guinness, as long as the product isn’t in any way destroyed or its reputation attacked, but the long tail of very light drinkers are a really big opportunity to increase Guinness sales, and that's really where the campaign should be focused.
The ‘black and white’ campaign
I joined in ’95, and at that time sales were declining, marginally. We had a Black and White campaign, what we called the ‘Not Everything in Black and White Makes Sense’ campaign, which had been running for about a year. The objective of that campaign was really to take out two new stout competitors, which was Murphy’s and Beamish. In my view, in retrospect, that strategy was clearly wrong, in that it was chasing a very small opportunity, which was to reduce the share of the other stouts in the market, rather than looking at the total beer market where the opportunity was much greater.
The ‘good things’ campaign
In my view, great advertising identifies the key truth of a brand and the product within it. And what we had to do with Guinness was to choose what that truth was that we wanted to demonstrate. We had been running a Perfect Pint programme, as we called it, which was designed to improve the consistency of quality of our product in all the outlets where it’s sold, and put a huge amount of time and money into training bar staff to present the product properly, to store it properly, to get the temperature right, put it in the right glass and to do the two-part pour, which is integral to getting that nice head on the top of the pint. And that worked extremely well, and we decided to choose the two-part pour as the way of demonstrating all of those product differences and telling people that it’s worth waiting for the product to be presented in the right way, and that led to the line ‘Good things come to those who wait’.
Advertising as part of a bigger picture
I think Guinness probably has relied too much on advertising. I think the best results, that certainly we had when I was in the company, were coming from a combination of advertising to send a big message about where the brand was going but really strongly supported by activity where Guinness drinkers or potential drinkers really get involved; student bar nights, music events, sponsorship activity. If you go to a rugby match, you get a real sense of what Guinness can be about. And it’s a very exciting place to be. And most importantly it’s fun. I just think some of the fun has gone out of the brand at the moment.
Peter York, advertising guru:
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The challenge for Guinness
The conundrum for Guinness, forever and a day, and it’s very simple, is that they have a product – which is a very traditional product – which is absolutely against the central movement, post-war movement in the beer market. Which is from dark to light, from thick to thin, it’s very dark and it’s full of stuff. And what you get, now, are the most important basic rather boring beer experiences, are very light and very thin; sort of degraded versions of German lager, one way or another. Now, of course, at the margins there's a profitable market in special beers of one kind or another. But Guinness is about volume. Guinness cannot afford to become a marginal special beer. It has to maintain volume. And it’s a national brand that, historically, didn’t have its own tied pub, so it had to create consciousness all the time. So it was literally advertising driven sales. And then, after the beer revolution started, to somehow enable them to buck the trend by being very famous and very funny and very interesting.
The importance of advertising
I think advertising has been absolutely central to what Guinness is about, because Guinness has survived as a brand as well as a product, and that's what's led the whole thing. You know, enable it to stay afloat when lots of its peers absolutely drowned. And it just so happens that it’s not only that it spends a lot of money and a lot of effort on advertising, but that advertising has been sort of touched. Gifted as touched, as the Irish would say, very, very gifted advertising, which has somehow got it right for successive cohorts of people.
The challenge of fast world, slow pint
Essentially, they’ve decided that they have to, not only defend the traditional characteristics of the product but to make a virtue of them. So, the long waiting because of the pouring and the head and all that palaver, you would create a ritual out of it. People used to, it used not to be a special thing because there were lots of stouts around and people were used to the preamble, the long preamble. But people who want an instant life and want an instant rather boring drink regard it as something of a palaver. This is making it into a value.
The new Guinness Red
I think any decision about making a real change under the Guinness brand, a real product change under the Guinness brand, would have been based on an analysis that said the stout market is not going to stay there forever. You have, this is, there's an inexorable reduction in this market. And ten years hence, if we don’t do something, we’ll be marginal. We’ll be a speciality thing in speciality pubs and gastro pubs. We don’t want to be there, we have to have volume. And they’re taking a risk, just like Coke variants have been a risk.
These interviews were recorded exclusively for The Open Universrity by The Money Programme.
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Copyright & revisions
Originally published: Friday, 22nd June 2007
Last updated on: Friday, 23rd November 2007
- Body text - Copyright: The Open University
- Video 1 - Copyrighted: BBC
- Video 2 - Copyrighted: BBC
- Video 3 - Copyrighted: BBC
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