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Data and charting from Hemscott unless otherwise indicated. Data delayed by at least 20 minutes

  Consumer goods

The Sunday Times October 30, 2005

Marketing: A pint of plain brewed up to woo the young

With a new series of stouts, Guinness hopes that younger drinkers will refresh its ailing fortunes
GUINNESS once tried to convince the world that it was “good for you” and that it “gives you strength”, but it seems these qualities are not enough for Ireland’s discerning young drinkers today.

With wine and white spirits sales on the march, the black stuff has been battling to hold onto its share of a falling beer market.

In a bid to buck declining sales volumes, brand owners Diageo this month launched Guinness Brew 39, a smoother version of the bitter stout, as part of the Guinness Brewhouse series. The brewer is planning to launch a different potion every six months.

“People will always ask the question: ‘Should the natural heritage of the black stuff be messed with?’” said Gary Power of the marketing agency Saor Communications. “But the big stout brewers like Guinness will also have noticed the success of the likes of the lighter Porterhouse stouts. That’s given people a new taste for experimentation,” he said.

Guinness has tried to introduce new beers before and failed to excite much interest. So why does it think it will be successful this time? Guinness XXX Extra Strong, Guinness Gold and Breo all faltered within a short time of being launched.

Its “fast pour” experiment, designed to cut the settling time for a pint, was abandoned two years ago, and the brand has crept back with new campaigns that focus on the 119 seconds it takes to pour the “perfect pint”. Guinness Light was launched in a blaze of publicity in 1979 with the slogan: “They said it couldn’t be done.” Two years later it was withdrawn.

“The Guinness drinker base is older, it always has been,” said Paul Kelly, the marketing director of Diageo Ireland. “It’s a drink that people tend to graduate onto. Our target buyers with this (Guinness 39) are people coming into their mid-twenties.”

The new brews are being promoted as being more “drinkable” in a push to attract younger drinkers. There will be a new brew each month so Diageo can assess just what taste this market prefers.

“The Brewhouse series is going to be a serious part of our marketing strategy going forward. As to how long it will last, consumers will be the judge of that,” said Kelly.

Sales of Guinness in Ireland have dropped about 15% in volume since 2000, mainly due to its reliance on the pub trade, which accounts for almost 90% of all its Irish sales.

In the first six months of this year, Diageo’s sales in Irish pubs and restaurants fell 5% as the sector struggles to shake off the after-effects of the smoking ban.

The €3.24 billion beer market overall is in serious decline, although Guinness managed to increase its share by 1% last year after two straight years of decline.

Some foreign analysts have been sceptical about the new move. Gerard Rijk, a beverage analyst at ING Financial Markets in Amsterdam, told one news agency: “The answer isn’t to mess around with the product, but rather to invest in marketing the traditional heritage of the product.”

Guinness 39 is being test- marketed in about 300 key pubs in the greater Dublin area, with plans to roll out the next Brewhouse product nationwide next March.

Perhaps mindful of its past failures, Guinness executives are being a little more cautious this time around, spending just €1.2m marketing Guinness 39 through branded beer mats and glasses and a small amount of radio and press advertising. This is just a fraction of its annual global €230m marketing spend on the mother brand.

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