It’s likely that no other major beer brand was as negatively impacted by the closure of bars and restaurants during the pandemic as Guinness. But with the on-premise channel now in recovery mode, the iconic Irish brew has set its sights on building upon the growth it’s experienced off-premise in the last year and a half, continued product innovation, and uncharacteristic sports marketing tie-ins, all while supporting bars and restaurants in their reopenings.
According to Impact Databank, Guinness volume dropped 13% last year to 11.4 million (2.25-gallon) cases from 13.1 million in 2019. “Guinness is very overexposed to the on-premise channel,” says Nikhil Shah, brand director at Diageo Beer Co. “With Covid-19 lockdowns hitting around St. Patrick’s Day last year, the impact of the pandemic was particularly dramatic for us.” But the brand was quick to pivot to “a message of resiliency and optimism” last spring, Shah notes, as well as an enhanced focus on off-premise channels. “Off-premise recruitment is through the roof,” he says, with more than one million new households added among its customer base. “We expect people to continue to celebrate at home, so we’ll maintain its relevancy off-premise.”
First produced in Dublin more than 260 years ago, Guinness stout is available around the world and is perhaps the most recognizable brew anywhere, particularly when served up in a pint glass with a frothy head. Its strength on-premise turned out to be a liability as the brand experienced “negative growth” at the height of the pandemic, according to Shah, as unused kegs had to be redeemed from bars and restaurants. By the second quarter of 2021, however, the on-premise situation had improved significantly, he says.
In addition to off-premise opportunity, Guinness has been pursuing innovation as a growth vehicle. Guinness Nitro Cold Brew Coffee beer, packaged in 4-packs of 14.9-ounce cans, launched earlier this year, and Diageo is very bullish about its potential. “We see coffee as a huge space,” Shah remarks. “It’s an opportunity for Guinness to enter new occasions.” Cold brew— popular for its refreshment attributes—is a natural for a brand like Guinness, he notes. While still early days, he says Guinness Nitro Cold Brew has been “highly incremental to the brand and is pulling in new users.”
Guinness’s craft-like Open Gate brewery in Maryland has been pivotal to the brand in its innovation push. “Led by our expertise in Ireland, the brewery has allowed us to showcase our talent,” Shah says. This year’s Guinness Salt & Lime, for example, has emerged as one of the brand’s most successful local launches, he notes. Open Gate brewers work to incorporate local ingredients into their brews, such as the Lemon Peppermint Stick beer that pays homage to Baltimore’s summertime treat. For the year-end holidays, the brewery releases special barrel-aged offerings. This year, a barrel-aged mint chocolate stout is planned, Shah reveals.
The three-year-old Maryland brewery and taproom—located on the grounds of the old Calvert distillery in Baltimore County—has provided an overall halo effect on the Guinness brand in the mid-Atlantic area, Shah says. And while customer traffic was impacted by the pandemic, the site’s generous indoor and outdoor facilities made it welcoming for visitors seeking a safe space, Shah notes.
In another twist, Guinness has begun to take on major domestic brews in its marketing practices. Last year the brand was named the official beer of the University of Notre Dame’s Fighting Irish Alumni & Fans, a group comprising more than 40 million Americans. And this year’s Super Bowl game featured an ad with football legend Joe Montana as a brand spokesman. More spots are planned, Shaw says. Brand support in the last year has also included donations to local communities and the hospitality industry in the wake of Covid-19.
While last year may have been a blight for Guinness, Diageo has its eyes on the brand’s future. “We’re coming off a great year off-premise,” Shah says. “And we believe the on-premise will come roaring back. Things are looking bright for us.”