During the presentation of Diageo's results in January, a rare highlight emerged: the rising popularity of Guinness, the famous Irish stout that became the most popular beer brand in the UK last year.
Diageo CEO Debra Crew attributed the brand's success to so-called "Guinnfluencers" on social media, stating that consumption among women had increased by 24 percent, with the growth mainly driven by consumers aged 25 to 45 in the UK and Ireland.
For a long time associated with Irish pubs, rugby, and older male drinkers, Guinness has found new consumers through changes in its marketing strategy. In the pubs of London's Soho district, one now encounters young, trendy drinkers of the stout, similar to in the USA, where hip circles have discovered working-class beers like Pabst Blue Ribbon and Michelob.
Meme accounts like @real_housewives_of_clapton and @shitlondonguinness have promoted the new viral status of Guinness. The peak was reached two weeks ago when designer JW Anderson presented a collection of Guinness sweaters at Milan Fashion Week.
Anna MacDonald, Marketing Director of Guinness in Britain, could not say exactly how much of the boom was due to the viral effect and how much to their own marketing strategy. “I think it's a mixture of both,” said MacDonald. “But you have to be a brand that can thrive in this space and also embrace it.”
Sure! The translation of the heading to English is:
"Even @shitlondonguinness, which documents how poorly Guinness pints are poured in London pubs, shows, according to MacDonald, how much people care about the brand.
Diageo's beer sales had long lagged behind spirits like Casamigos Tequila and Smirnoff Vodka, and the company gradually sold off its beer assets, most recently Guinness Nigeria. However, since the decline in spirits sales following Covid, this trend has reversed, almost exclusively due to the growth of Guinness.
Beer sales in Europe increased by 7 percent in the second half of 2023 and by 3 percent in the USA, while spirit sales in both regions declined by 4 percent. Guinness sales in Europe rose by 24 percent, driven by drinkers in the UK and Ireland, while sales of the non-alcoholic Guinness 0.0 more than doubled.
The beer business of Diageo increasingly contributes to the group's growth," said Simon Hales, an analyst at Citigroup. "After several years of the beer portfolio lagging behind the larger brewing peers, it is now growing faster than they are, which we believe is not adequately reflected in the group's share price.
The analysts will watch for a recovery in spirit sales this month in the full-year results, following a period of inventory reduction as retailers sold off the stocks they accumulated during the Covid boom.
Sales of stout in pubs increased by 14 percent in the last quarter compared to the previous year, while ale and craft lager fell by 8 and 9 percent, respectively, and overall beer volume decreased by 4 percent, according to the consulting firm Curren Goodden Associates.
We are definitely seeing a new customer base," said Mark Brooke, Managing Director of the company Proper Pubs, led by Admiral Taverns. "Guinness has managed to appeal to a more female audience without losing its relationship with its traditional consumers.
Guinness is said to be less "carbonated" than lager beer and to have fewer calories, which makes it more popular among women, according to Brooke. MacDonald said that Diageo has not undertaken anything special to specifically target women but has simply directed media spending towards all consumers.
I like Guinness because you feel less bloated at the end compared to lager," said Maria Aguinaga, 35, while having an after-work pint with colleagues outside the Hand & Shears pub near Smithfield Market in London.
Guinness remains extremely popular in its home market, although some customers have been deterred by price increases in pubs since the beginning of last year and are turning to competing products like Murphy's.
Consumers pressured by the cost-of-living crisis have reduced their spending on more expensive spirits, while beer sales have not dropped as drastically and volumes are normalizing, supported by warmer weather and sporting events like the 2024 UEFA European Championship.
MacDonald said that taste has shifted in favor of classic and established brands after a period of "anti-brand" consumer sentiment, exemplified by the rise of craft beers.
Despite new consumers, the company continues to associate Guinness with rugby, with Debra Crew assuring during the January trade update that "rugby guys still like it.
Diageo hopes to replicate this success in football. Guinness signed a four-year sponsorship deal with the Premier League last month, starting in the 2024-25 season.
A regular Guinness drinker will drink nothing else," said James Baer, CEO of Amber Taverns. "If a pub doesn't have Guinness, a regular Guinness drinker will probably say: 'Can we find a pub that has Guinness?'
