Women and younger drinkers drive Guinness revival
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
At Diageo’s results in January, a rare bright spot amid sluggish sales of its core spirits brands was a surge in the popularity of Guinness, the famed Irish stout that last year became the UK’s favourite beer.
Chief executive Debra Crew credited social media “Guinnfluencers” as key to the brand’s success, telling journalists consumption was up 24 per cent among women, with growth driven largely by consumers aged 25-45 in the UK and Ireland.
Long associated with Irish pubs, rugby and older, male drinkers, Guinness has found new consumers thanks to shifts in its marketing strategy. Pubs in London’s Soho now teem with cool young drinkers of the stout, in an echo of the US hipster appropriation of blue-collar beers such as Pabst Blue Ribbon and Michelob.
Meme accounts including @real_housewives_of_clapton and @shitlondonguinness have helped forge Guinness’s new viral status, which reached an apex two weeks ago when designer JW Anderson showed a collection of Guinness branded jumpers on the catwalk at Milan Fashion Week.
Guinness’s UK marketing director Anna MacDonald said she could not be sure how much of the boom was down to the viral effect and how much was the result of its own marketing strategy. “I think it’s a bit of both . . . It’s a virtuous circle,” said MacDonald. “But you have to be the kind of brand that can thrive in that space and embrace it.”
Even @shitlondonguinness, which chronicles how badly Guinness pints are pulled in London pubs, is a sign of how much people care about the brand, MacDonald said, pointing out that the account had bred copycats all over the country, where demand was also growing.
Diageo’s beer portfolio has long lagged behind its spirits, which include brands such as Casamigos tequila and Smirnoff vodka, and the company has slowly sold off its beer assets, most recently Guinness Nigeria — a superstrong variety of the stout brewed in the west African nation.
Since a post-Covid slump in spirits sales, however, that trend has been reversed, driven almost exclusively by the growth of Guinness.
Beer sales volumes grew 7 per cent in Europe and 3 per cent in the US in the six months to the end of December, while spirits sank 4 per cent in both regions.
Guinness sales in Europe rose 24 per cent, driven largely by drinkers in the UK and Ireland, while sales of non-alcoholic Guinness 0.0 more than doubled.
“Diageo’s beer business is becoming a bigger contributor to group growth,” said Citigroup analyst Simon Hales. “After a number of years of underperforming its bigger brewing peers, Diageo’s beer portfolio is now outgrowing them, a fact which we believe is not being fairly reflected in the group’s share price.”
Ahead of full-year results this month, analysts will be watching for a recovery in spirits sales after a period of destocking as retailers sold through inventory accumulated during the Covid boom.
The volume of stout sold in pubs rose 14 per cent year on year in the last quarter, according to food and drink consultancy Curren Goodden Associates, while ale and craft lager fell 8 and 9 per cent respectively as overall beer volumes declined 4 per cent.
“What we’re definitely seeing is a new customer,” said Mark Brooke, managing director of Admiral Taverns’ managed business Proper Pubs. “Guinness has managed to tap into a more female audience,” while maintaining its relationship with its traditional consumer.
Guinness was “less gassy” than lager and had fewer calories, and was more popular with women as a result, Brooke reasoned.
MacDonald said Diageo had done nothing specifically to target women. Instead she credits a simple shift in how the team targeted its media spend to appeal to all consumers, not just the older male that was once its core.
“One thing that’s true of women, which is true of all people but especially women, is that humanity is important,” she said. “Dialling up the humanity that has always been at the heart of our best marketing on Guinness has been part of the appeal.”
“I like Guinness, because with lager you end up feeling more bulky at the end,” said Maria Aguinaga, 35, enjoying an after-work pint with colleagues outside the Hand & Shears pub near London’s Smithfield Market.
For women “there’s a rebelliousness in drinking pints”, said Ali Dunworth, author of A Compendium of Irish Pints, noting how pubs were traditionally male spaces and women were once only served half-pints.
Guinness remains hugely popular in its home market, where the stout has been brewed since the 1770s. But Dunworth said some customers had been turned off by price rises in pubs since the start of last year and were turning to rival stouts.
Her own local pub in Maynooth has put in a tap for Murphy’s, a stout rarely seen in Ireland’s pubs outside the south of the country. “Price-sensitive customers are going for Murphy’s,” she said.
Consumers squeezed by the cost of living crisis have cut down spending on more expensive spirits after splashing out on home cocktail making during Covid-19 lockdowns. Beer sales, however, did not dip as drastically, and volumes are beginning to return to normal, aided by warmer weather and sports events such as the Euro 2024 football championships.
MacDonald said tastes had shifted to favour classic and established brands after a period of “anti-brand” consumer sentiment exemplified by the rise of craft beers. “They were looking for the independent, anti-establishment brands,” she said. “But now it’s gone full circle with Gen Z.”
Despite its new consumers, the company continues to capitalise on Guinness’s association with rugby, with Debra Crew assuring media during the January trading update that “rugby lads still like it”.
In the UK, 38 per cent of rugby fans say their preferred drink is Guinness, doubling since 2014, according to Fanzo, a pub discovery app for sports fans. The brand is the title sponsor for the Six Nations rugby tournament.
“As the Six Nations and rugby’s audience has gotten younger, Guinness has been able to ride that wave of penetration into a younger audience,” said Dominic Collingwood, co-founder of Fanzo.
Diageo is hoping to replicate this success with football. Guinness last month struck a four-year sponsorship agreement with the Premier League, which begins in the 2024-25 season.
“A regular Guinness drinker won’t drink anything else,” said James Baer, chief executive of Amber Taverns, which operates nearly 170 pubs across the UK, where he added there had been a double-digit percentage increase in Guinness sales over the past year.
“If you’re a regular Guinness drinker and a pub doesn’t have Guinness and you’re with a group of friends, you probably say, ‘Can we find somewhere with Guinness?’” But with other brands, “you wouldn’t not go into that pub”.
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