US: Diageo holds high hopes for Guinness Black Lager
Diageo makes "big play" with Guinness Black Lager
Guinness Black Lager is Diageo's "big play" in the US beer market in the group's current fiscal year, according to Oliver Loomes, Guinness global brand director. Having tested the beer in San Diego and Chicago, the group has launched the brand nationwide this month as it seeks to tap into consumer thirst for flavourful, bottled lagers.
"If we can crack it, the numbers will be big," said Loomes, speaking to just-drinks in Dublin last week. "In the US, Guinness is a small player, so if ... we could get [an extra] 1% or 2% share of the market, then that would be quadrupling the current size of the business."
In the past Guinness has proved a tough brand for Diageo to expand. Many consumers have shunned new takes on the established brand and not enough new consumers have been wooed. Added to this, in the US specifically, overall beer sales are in low single digit decline.
Momentum, though, is already with Guinness in the US. Sales rose by 3% in both volume and value off a small base in Diageo's last fiscal year, to the end of June. Loomes believes that US consumers have "endorsed Guinness Black Lager as something credible from the Guinness brand". At 4.5% abv, it is being pitched at around US$8.49 per six-pack, which Diageo says is in-line with other premium imported beers.
"If our test markets are going to be replicated nationally, then we're on to a big opportunity," said Loomes, who declined to comment on specific sales targets.
For now, the US will be Diageo's focus for Guinness Black Lager, but there is scope for launches in other markets if all goes well. In terms of profit margins, Guinness Black Lager could also pay dividends. "Safe to be said that if we can make this thing successful in the US then over time it'll be very successful for the business," said Loomes.
"In the world of beer, the majority is lager, while stout is a relatively small part. If we could tap into all of those people that are consuming lager via the Guinness brand, then that would clearly offer us huge potential."
As well as in the US, the Guinness brand has shown growth in Africa and Asia-Pacific. But Europe, which accounts for 40% of sales, continues to drag on results. For Diageo's full-year, Guinness sales dropped by 5% in value and volume in Europe, despite share gains in the UK and Ireland.
"If 40% of your brand isn't doing well then that will definitely have an impact on your global performance," said Loomes. "We're very focused and very determined to get to a positive place [on sales]."
In part two of this month's four-part just-drinks management briefing, Richard Woodard continues to cast his eye over the rebranding process. What are the effects of a rebrand, and how broadly are tho...
In these modern times, as the world gets smaller, Diageo would appear to be embracing the softly-softly approach of the post-colonial age....
I shifted my money off Bacardi's square today. For what it's worth, I don't think the firm is in the Beam Inc picture anymore....
There's a large and very prominently displayed sign at the entrance of Kavalan's visitor centre in their distillery at Yi-Lan, Taiwan. "The New Homeland of Whisky", it reads. Now, it would be easy to ...
- Whatever happened to binge Britain? - comment
- The dangers of squaring up to your competitor
- The US beer market - A level playing field for all
- Remy Cointreau's Q2 and H1 - preview
- Constellation and Ballast Point's "sticker shock"
- Sidney Frank CEO to head Clooney's import co
- Diageo Australia appoints commercial head
- Diageo sells off United Spirits' Bouvet Ladubay
- Irish whiskey brands could fail without bulk
- A-B InBev to "kick the tyres" at Coca-Cola
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Wine Market to 2019 - Market Size, Development, and Forecasts
- Global Wine Market: News and Events September 2015