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Case Study: How an International Beer Co. Keeps Its Brand Distinctive and Fresh

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Company: Guinness (a Diageo company)
Contact: Jonathan Waldron, Guinness Draught Marketing Manager
Location: London, England
Industry: Retail (B2C)
Annual revenue: Confidential
Number of employees: Confidential

Quick Read:

Irish-brewed Guinness, which claims to be the top-selling stout in the world, is facing competition to keep that title as the global beer industry consolidates. It also needs to diversify its customer base, as about 95% of its sales volume comes from its top four markets: the UK, Ireland, Nigeria and the US.

To keep a distinctive reputation, Guinness has put considerable resources into its Dublin brewery and visitor center, located at the company's birthplace. The brewery is now Ireland's largest and has become the country's top international tourist attraction. It is a strategy that Guinness hopes to eventually replicate in the US, its fastest-growing market.

The Challenge:


Traditional beer markets have reached their maturity. The Western Europe beer market—closest to home for Guinness and the region that accounts for 19% of world sales—is expected to account for just 16% of global sales by 2011, predicts Canadean Ltd., a London-based beverage research firm. The North American market is seen falling from 16% of total beer sales to 13% by 2011, according to the group.

Guinness, the oldest beer in Ireland and the top-selling stout in the world, needs a strong image to keep its edge in this globally competitive beer environment. It also needs to diversify away from its mostly Western European consumer base.

The Campaign:

St. James Gate in Dublin is considered the birthplace of Guinness. It is where the company opened its first brewery in 1759. Today the brewery is the largest in Ireland—and the largest stout brewery in the world—with a capacity of 6.5 million barrels. It takes up 64 acres of land.

Another huge European Guinness brewery at Park Royal was closed in 2005 after 69 years because of declining production. Instead, Guinness concentrated stout production for its biggest markets at St. James Gate, guaranteeing that the company's birthplace would be a significant source of stout for the foreseeable future.

Visitors to St. James Gate are welcomed at the Guinness Storehouse, the visitor center. The massive, 125-foot-high Storehouse was once part of the process of producing stout, holding the world's largest fermentation vessel in the world. Now it contains a myriad exhibits relating to the history and folklore of the beer and the brewery. It also houses the Guinness Archives.

The Storehouse last year became Ireland's number-one visitor attraction, with three million visitors in its first five years of operations. Its top floor—the seventh—offers the Guinness Gravity Bar, the highest point in Dublin. It's a place to enjoy a glass of beer as well as a 360-degree view of the city.

Guinness may be a victim of its own success in Ireland and other European countries. The brand has been so ingrained in Irish culture that the company worries about marketing it to younger people, who may perceive it as being their "father's beer," said Jonathan Waldron, Guinness Draught marketing manager.

"We always strive to maintain a contemporary association with the brand in Ireland because everybody's father did drink it," Waldron said.

St. James Gate, along with the Storehouse, can help counter that view if it attracts a younger audience and piques their interest in Guinness stouts and draughts. The Storehouse should also attract more beer drinkers from new markets, as international visitors continue to visit and sample Guinness.

Waldron hinted that Guinness will try a similar strategy in the United States, where recently there's been a large increase in attention to microbreweries.

"The craft brew segment of the American market is great for Guinness in that those kinds of beers are drunk by people who are looking for a taste experience, and we can certainly offer people a taste experience. There are some great beers out there, and the more popular they become, it's only going to help Guinness."

"In time, I hope that the US market will become the largest," Waldron said.

Results:

In its first five years of operation, the Storehouse at St. James Gate became Ireland's top international tourist attraction, helping it attract potential new Guinness drinkers from throughout the world. If Guinness opens future breweries with welcome centers in markets that it hopes to expand—such as the US—the success of the Storehouse gives the company instant credibility as it seeks to attract tourists and potential Guinness drinkers.

Lessons Learned:

  • Think of new ways to extend your brand name if your brand is already established. Guinness already had a top-selling beer and a 240-year-old brand when it decided to open the massive Storehouse visitor center next to its largest brewery in Ireland. That made the birthplace of Guinness a top tourist attraction and helped make Guinness a topic of national conversation, garnering much free publicity.
  • Reinforce your strategy on your Web site. Guinness's homepage gives visitors an extensive history about the company from before its formation in 1759. It also offers them information about St. James and a link to the Storehouse Web site.

Related Links:

Notes:

  1. Guinness corporate parent Diageo's revenue annual revenues are 7.48 billion, and the number of its employees is 22,000; Diageo does not break out revenue or employee numbers by product line.
  2. Most of the information presented here is from the book Guinness by Bill Yenne, published by John Wiley & Sons, Inc. Sept. 2007.

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