Guinness and the American Craft

In 2011, President Barack Obama made news during a trip to Ireland when he downed a pint of Guinness in four executive gulps. What’s noteworthy now isn’t that Obama drank the stout, but what he said while doing so: “I tried one of these and I realized it tastes so much better here than it does in the states… What I realized was that you guys, you’re keeping all the best stuff here.” Without parsing fact from pander there, Obama’s endorsement is one that Guinness, founded in 1759 and owned for the last 18 years by multinational alcoholic beverage company Diageo, would most benefit from dismissing entirely.

With dollar sales up nearly 11 percent in multi-outlet and convenience channels (MULC) through Aug. 9, 2015, the import category is the third-fastest growing segment in the American beer space, according to market research company IRI. But a lot of growth has come in recent years from Mexican lagers, which align stylistically with the mass-produced American lagers that comprise the bulk of U.S. beer sales, a bulk that is nevertheless shedding share.

Knowing that the movement is toward craft, better beer, a flight to quality, Guinness is increasing its investment in the U.S., a country where more and more people are demanding, to quote the leader of the free world, “all the best stuff.” But in an import adjustment, the creamy stout, a nitrogenated rite of passage in its homeland, won’t be alone in the company’s effort to toast America’s craft-conscious consumer base. New on-trend products are also being readied to hit shelves and draft lines to satisfy a distinctly American palate.

“Guinness is looking for beer consumers, and better beer consumers,” said Emma Giles, Guinness brand director in North America. “What’s great with all this experimentation that’s going on, consumers are out trying lots of beer and their eyes are coming back to Guinness.”

Even as the company plans on expanding its portfolio, it’s not as though diversification in the marketplace has sounded a death knell for its well-known stout brands, which have long been a ubiquitous fixture in the states. Dollar sales of Guinness Draught were up a slight 2.1 percent in MULC through August 9 (to $42.3 million), and its Extra Stout made a bigger leap, increasing sales 8.2 percent (to $24.5 million) in the same time frame.

Fergal Murray, former master brewer at Guinness, worked there for more than three decades before leaving last year (he now operates an independent beer consultancy firm). He said that while some die-hard beer aficionados might scoff at Guinness as a craft brand, “talking about independence and stuff like that,” the two top beers continue to succeed in part because they don’t appear out of place next other craft offerings on the shelves.

“Guinness doesn’t find itself as a liquid in the bottle on the shelf and [you] say, ‘Why the hell is that there among the craft section?’” he said. “Guinness doesn’t open that question up.”

Which is to say, the company has already been able to feasibly play in the craft space. And it seems to like it there, and is designing a portfolio to fit in a bit more. Released last fall, Guinness Blonde American Lager signaled an overtly craft-focused direction for the company, to some small success. In the 52 weeks leading up to August 9, the beer earned $12.8 million dollars in the food and convenience channels combined. Though brewed in Latrobe, Pa., the Blonde lager is considered part of the company’s Brewers Project, a sort of catchall moniker that refers both to its pilot brewery in Dublin that specializes in product innovation and the expanding line of beers that come from it.

The company is working on a number of beers slated to come out stateside in 2016, Giles said, most imminently, one that should, in theory anyway, resonate even more with American craft drinkers than last year’s Blonde. This fall, the company is releasing Guinness Nitro IPA. The beer will be treated to a nationwide rollout and be available both in cans and on draft.

As far as its strategy for executing behind these newer brands that appeal to American craft drinkers, Giles said the company plans to take the well-traveled route of trumpeting its 256-year history and telling that story however and wherever possible.

“The people that made this beer, [they’re] going to be coming to life,” added Giles. “The broad play would be through the communication methods to start with, using the new TV ads and digital content we’ll have. And at the same time, as our teams go out and sample the beer, we’ll be telling the story around that.”

Michael McGrew, senior director of communications with Constellation Brands, a major importer that sells prominent Spanish beer brands like Corona, Modelo, and Pacifico in the states, said he believes it’s one of the most effective ways to sell a foreign beer in a marketplace exceedingly loyal to its own home brewed libations.

“Local is important, obviously, you see that as a major component of the way craft beer is positioned in grocery markets and things of that nature,” he said. “At the end of the day, people are drawn to beer with interesting back stories.”

And while the Guinness back story will remain rooted in Dublin, anchored by the stout, it has become clear it hopes to change the conventional wisdom, as echoed by the president, that one need travel to Ireland to get the perfect pint of Guinness. The company is now making some of the so-called “best stuff” with America specifically in mind.

“I think overall the consumer in the U.S. has changed over the last couple of years,” added Giles. “What’s important is we want consumers to know we’re not just the Guinness brand. We are Guinness the brewery.”