Positioning Products for Broad Appeal

by Bill Yenne

How can you position a familiar product like beer to appeal to the widest possible market? That's one of the marketing challenges Guinness has faced. Read one of the ways they've approached the problem in this excerpt from Guinness: The 250 Year Quest for the Perfect Pint.

The following is a book excerpt 

Guinness: The 250 Year Quest for the Perfect Pint
by Bill Yenne
Published by John Wiley & Sons, Inc.;

September 2007; $24.95US/$29.99CAN; 978-0-470-12052-1
Copyright 2007 Bill Yenne. All rights reserved.

Guinness in the Twenty-First Century

By the beginning of the twenty-first century, two billion pints of Guinness were being poured annually in more than 150 countries around the world. According to the industry newsletter, Impact: Global News and Research for the Drinks Executive, Guinness Stout is the seventeenth largest selling beer brand in the world, and by far the best-selling beer brand that is not a pale yellow lager.

Ireland and the United Kingdom remain the largest markets in the world for Guinness, with Nigeria in third place. In fourth place, the United States is the fastest growing Guinness market. According to Jonathan Waldron, the Dublin-based Guinness Draught marketing manager, "Our top four markets explain 95 percent of our volume."

Though no longer the largest in the world, the Guinness Brewery at St. James's Gate remains the largest in Ireland -- and the largest stout brewery in the world -- with a capacity of 6.5 million barrels. After 69 years, the huge Guinness brewery at Park Royal was closed in 2005. It had once been Guinness's largest brewery, but as production at the site declined, the company decided to close it, and to concentrate stout production for the United Kingdom and Ireland -- as well as for the United States -- at the birthplace of Guinness in St. James's Gate.

In Ireland, the company also has an additional 1.5 million barrel capacity in Dundalk, as well as 1.2 million barrels at Kilkenny. At Warerford, the former Cherry's Brewery has been upgraded to a state-of-the-art special ingredient plant to produce Guinness Flavor Extract for export to the 50 countries where Guinness is brewed, either under license or at brewing companies in which Guinness is a partner.



Overseas, the company still owns a share in Malaysia's Guinness Anchor Berhad and it operates 10 breweries in six African countries, including Nigeria, Ghana, Cameroon, Kenya, Uganda, and the Seychelles. Africa is a key market for Guinness. Indeed, Africans drink more than one third of all the Guinness in the world.

Today, as much as ever, St. James's Gate is the center of gravity, not only for Guinness, but for its fans and devotees. Guinness aficionados who have made the pilgrimage to St. James's Gate since the turn of the century have been welcomed at the Guinness Storehouse, the brewery's new visitor center. The Storehouse is the successor to the Guinness Hop Store that served as the visitor center from 1988 to 2000. When the Storehouse opened, the Hop Store was sold to the Digital Hub, an Irish Government initiative to "create an international center of excellence for knowledge, innovation and creativity focused on digital content and technology enterprises."

Just as the previous visitor center had served for hop storage, the massive Storehouse was once part of the process of producing stout. Built to house fermentation vessels and opened in 1904, the 125-foot-high, red brick building once contained the largest fermentation vessel in the world. Updated and expanded in the 1950s, the Storehouse was superseded in the 1980s by a newer facility across James's Street to the north. It reopened in its new incarnation in December 2000. As the Hop Store before it, the Storehouse contains a myriad of exhibits relating to the history and folklore of the beer, the brand and the brewery. It also houses the Guinness Archives.

The Guinness Storehouse now has the distinction of being Ireland's number one visitor attraction, with three million visitors in its first five years. It is topped with the Guinness Gravity Bar, which is the highest point in Dublin. Constituting the seventh floor of the Storehouse, the Gravity Bar is a nice place to enjoy a pint, while also enjoying a 360-degree view of Dublin itself.

When those people who are enjoying their pints at the Gravity Bar -- or at the 150 or so Dublin pubs visible from the Gravity Bar -- or in the 150 countries across the horizon -- what pints are they enjoying? Jonathan Waldron explained, as we sat in the Brewery Bar one floor down from the Gravity Bar, that Guinness thinks in terms of a lead variant in each of its markets.

"Our approach to date has been that there is a lead variant in each market. In Ireland, the United Kingdom and North America, the lead variant would be Guinness Draught by a margin of about 75 to 80 percent," he said. "In Ireland, Guinness Extra Stout is drunk by an older population, including people who began drinking Guinness when Guinness was only Extra Stout. That is evolving a little bit as we see, for example, that younger consumers might like to enjoy Guinness Extra Stout with certain meals, such as with fish. They find the bite of the carbonation, plus the deeper tone, as a good balance with fish."

Waldron observed that in Ireland, Guinness has been so ingrained in the culture for so many years, that it presents an interesting marketing challenge. This challenge is to market a beer to younger people who may perceive it as being their "father's beer."

As he explains, "We will always strive to maintain a contemporary association with the brand in Ireland because everybody's father did drink it. On the other hand, in the United States, the average stout drinker tends to be younger and more highly educated than the average beer drinker because Guinness is perceived as a premium beer."

In the United States, the huge increase in attention to microbreweries has been a great boon for Guinness because they have revitalized interest in complexity and rich flavor in beer. As Waldron puts it: "The craft brew segment of the American market is great for Guinness in that those kinds of beers are drunk by people who are looking for a taste experience. We can certainly offer people a taste experience! There are some great beers out there, and the more popular they become, it's only going to help Guinness."

In most of the rest of the world, Waldron says that Foreign Extra Stout is by far the lead variant: "In Japan, we've only ever had Guinness Draught, but elsewhere in the Far East, where our big markets are Malaysia and Indonesia, the lead variant has always been Foreign Extra Stout, as it is across Africa. In North America, we see an interesting thing, which is that people in the Afro-Caribbean demographic favor Guinness Extra Stout. In the Caribbean, the lead variant is Foreign Extra Stout, which is unavailable in the United States, so they are getting close to that with Guinness Extra Stout."

Noting that Guinness sees the Foreign Extra Stout world as a potential growth area for Guinness Draught, he said that, "We're experimenting with launching draught in Asian markets. Guinness Draught has long been available in Hong Kong, and it is gradually becoming more available in upscale bars in some major Chinese cities. We have a draught presence in hotels and leading bars, but if we want to expand our business, we have to go for the man in the street. We've found that, whereas the older generation may be happy with the bite and the bitterness of Foreign Extra Stout, the younger generation has grown up with a sweeter palate, so Guinness Draught is a much more appealing product for them."

The fact that Nigeria is the third largest market for Guinness after the United Kingdom and Ireland underscores the importance of Foreign Extra Stout among the variants. On the other hand, the fact that the United States is the fastest growing market is important for the draught products.

"In time, I hope that the U.S. market will become the largest," Waldron said. "It's such a huge market. There is an established 'taste beer' segment, which has grown in recent years. Canada is a reasonably good market, but it is a much smaller market than the United Stares. In Europe, Germany is the largest but France, Italy and Spain are close behind. In Russia, Heineken brews Foreign Extra Stout under license from us.

Copyright © 2007 Bill Yenne. All rights reserved.

Guinness: The 250 Year Quest for the Perfect Pint can be ordered from Amazon.com


Bill Yenne has been writing extensively about beer and brewing history for two decades and has discussed these subjects as a featured guest on the History Channel. He is the author of more than forty books on a variety of historical topics, and a member of the American Society of Journalists & Authors.

 
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