Guinness in the Twenty-First Century

Author: Bill Yenne

Article:
By the beginning of the twenty-first century, two billion pints
of Guinness were being poured annually in more than 150
countries around the world. According to the industry
newsletter, Impact: Global News and Research for the Drinks
Executive, Guinness Stout is the seventeenth largest selling
beer brand in the world, and by far the best-selling beer brand
that is not a pale yellow lager.

Ireland and the United Kingdom remain the largest markets in the
world for Guinness, with Nigeria in third place. In fourth
place, the United States is the fastest growing Guinness market.
According to Jonathan Waldron, the Dublin-based Guinness Draught
marketing manager, "Our top four markets explain 95 percent of
our volume."

Though no longer the largest in the world, the Guinness Brewery
at St. James's Gate remains the largest in Ireland -- and the
largest stout brewery in the world -- with a capacity of 6.5
million barrels. After 69 years, the huge Guinness brewery at
Park Royal was closed in 2005. It had once been Guinness's
largest brewery, but as production at the site declined, the
company decided to close it, and to concentrate stout production
for the United Kingdom and Ireland -- as well as for the United
States -- at the birthplace of Guinness in St. James's Gate.

In Ireland, the company also has an additional 1.5 million
barrel capacity in Dundalk, as well as 1.2 million barrels at
Kilkenny. At Warerford, the former Cherry's Brewery has been
upgraded to a state-of-the-art special ingredient plant to
produce Guinness Flavor Extract for export to the 50 countries
where Guinness is brewed, either under license or at brewing
companies in which Guinness is a partner.

Overseas, the company still owns a share in Malaysia's Guinness
Anchor Berhad and it operates 10 breweries in six African
countries, including Nigeria, Ghana, Cameroon, Kenya, Uganda,
and the Seychelles. Africa is a key market for Guinness. Indeed,
Africans drink more than one third of all the Guinness in the
world.

Today, as much as ever, St. James's Gate is the center of
gravity, not only for Guinness, but for its fans and devotees.
Guinness aficionados who have made the pilgrimage to St. James's
Gate since the turn of the century have been welcomed at the
Guinness Storehouse, the brewery's new visitor center. The
Storehouse is the successor to the Guinness Hop Store that
served as the visitor center from 1988 to 2000. When the
Storehouse opened, the Hop Store was sold to the Digital Hub, an
Irish Government initiative to "create an international center
of excellence for knowledge, innovation and creativity focused
on digital content and technology enterprises."

Just as the previous visitor center had served for hop storage,
the massive Storehouse was once part of the process of producing
stout. Built to house fermentation vessels and opened in 1904,
the 125-foot-high, red brick building once contained the largest
fermentation vessel in the world. Updated and expanded in the
1950s, the Storehouse was superseded in the 1980s by a newer
facility across James's Street to the north. It reopened in its
new incarnation in December 2000. As the Hop Store before it,
the Storehouse contains a myriad of exhibits relating to the
history and folklore of the beer, the brand and the brewery. It
also houses the Guinness Archives.

The Guinness Storehouse now has the distinction of being
Ireland's number one visitor attraction, with three million
visitors in its first five years. It is topped with the Guinness
Gravity Bar, which is the highest point in Dublin. Constituting
the seventh floor of the Storehouse, the Gravity Bar is a nice
place to enjoy a pint, while also enjoying a 360-degree view of
Dublin itself.

When those people who are enjoying their pints at the Gravity
Bar -- or at the 150 or so Dublin pubs visible from the Gravity
Bar -- or in the 150 countries across the horizon -- what pints
are they enjoying? Jonathan Waldron explained, as we sat in the
Brewery Bar one floor down from the Gravity Bar, that Guinness
thinks in terms of a lead variant in each of its markets.

"Our approach to date has been that there is a lead variant in
each market. In Ireland, the United Kingdom and North America,
the lead variant would be Guinness Draught by a margin of about
75 to 80 percent," he said. "In Ireland, Guinness Extra Stout is
drunk by an older population, including people who began
drinking Guinness when Guinness was only Extra Stout. That is
evolving a little bit as we see, for example, that younger
consumers might like to enjoy Guinness Extra Stout with certain
meals, such as with fish. They find the bite of the carbonation,
plus the deeper tone, as a good balance with fish."

Waldron observed that in Ireland, Guinness has been so ingrained
in the culture for so many years, that it presents an
interesting marketing challenge. This challenge is to market a
beer to younger people who may perceive it as being their
"father's beer."

As he explains, "We will always strive to maintain a
contemporary association with the brand in Ireland because
everybody's father did drink it. On the other hand, in the
United States, the average stout drinker tends to be younger and
more highly educated than the average beer drinker because
Guinness is perceived as a premium beer."

In the United States, the huge increase in attention to
microbreweries has been a great boon for Guinness because they
have revitalized interest in complexity and rich flavor in beer.
As Waldron puts it: "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. 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 most of the rest of the world, Waldron says that Foreign
Extra Stout is by far the lead variant: "In Japan, we've only
ever had Guinness Draught, but elsewhere in the Far East, where
our big markets are Malaysia and Indonesia, the lead variant has
always been Foreign Extra Stout, as it is across Africa. In
North America, we see an interesting thing, which is that people
in the Afro-Caribbean demographic favor Guinness Extra Stout. In
the Caribbean, the lead variant is Foreign Extra Stout, which is
unavailable in the United States, so they are getting close to
that with Guinness Extra Stout."

Noting that Guinness sees the Foreign Extra Stout world as a
potential growth area for Guinness Draught, he said that, "We're
experimenting with launching draught in Asian markets. Guinness
Draught has long been available in Hong Kong, and it is
gradually becoming more available in upscale bars in some major
Chinese cities. We have a draught presence in hotels and leading
bars, but if we want to expand our business, we have to go for
the man in the street. We've found that, whereas the older
generation may be happy with the bite and the bitterness of
Foreign Extra Stout, the younger generation has grown up with a
sweeter palate, so Guinness Draught is a much more appealing
product for them."

The fact that Nigeria is the third largest market for Guinness
after the United Kingdom and Ireland underscores the importance
of Foreign Extra Stout among the variants. On the other hand,
the fact that the United States is the fastest growing market is
important for the draught products.

"In time, I hope that the U.S. market will become the largest,"
Waldron said. "It's such a huge market. There is an established
'taste beer' segment, which has grown in recent years. Canada is
a reasonably good market, but it is a much smaller market than
the United Stares. In Europe, Germany is the largest but France,
Italy and Spain are close behind. In Russia, Heineken brews
Foreign Extra Stout under license from us.

Copyright © 2007 Bill Yenne. All rights reserved.

The above is an excerpt from the book Guinness by Bill Yenne
Published by John Wiley & Sons, Inc.; September
2007;$24.95US/$29.99CAN; 978-0-470-12052-1 Copyright © 2007 Bill
Yenne. All rights reserved.

About the author:
Bill Yenne has been writing extensively about beer and brewing
history for two decades and has discussed these subjects as a
featured guest on the History Channel. He is the author of more
than forty books on a variety of historical topics, and a member
of the American Society of Journalists & Authors.