Guinness growth overview: why it defies alcohol industry decline
- Guinness defies declining alcohol market
- Diageo struggles globally but Guinness performs strongly across most regions
- Social media gamification like splitting the G boosts younger consumer engagement
- Affordable indulgence positioning helps retain consumers amid inflation and cost pressures
- Investment in Guinness 0.0% attracts non alcohol drinkers seeking similar taste
The alcohol market has seen better days. As consumers flock to moderation trends and affordability pinches hard, sales of alcohol are falling around the world.
Yet Irish stout brand Guinness is showing remarkable resilience. Far from declining, it is still seeing steady growth as the alcohol industry crumbles around it.
What is enabling Guinness to buck these trends?
The decline of alcohol and Diageo‘s struggles
Both Diageo, Guinness’s parent company, and the alcohol category as a whole, have seen significant challenges in recent years.
This is one of the most difficult times for the alcohol industry in decades, says Spiros Malandrakis, head of research for alcoholic drinks at consumer insights platform Euromonitor.
Consumers are increasingly stressed financially, and are sacrificing non-essential purchases.
Guinness’s parent company, Diageo, is also struggling. The company’s recent H1 results reported weak sales in many key geographies, including the US and China.
The one bright spot for the company seems to be Guinness. The classic Irish stout is up by 10.9%, growing in all regions apart from Asia Pacific.
The ‘gamification’ of Guinness
Guinness is seeing success partly because it has managed to resonate with younger audiences, for whom alcohol isn’t always a go-to option. In particular, social media campaigns, such as the one around ‘splitting the G’, have been good for the brand.
“Social media campaigns designed to boost brand awareness with new generations of consumers, not all of whom wish to consume as much alcohol as their forebears,” are evidence of the brand’s ability to adapt to new audiences, says Russ Mould, investment director at investment platform AJ Bell.
The ‘gamification’ of drinking Guinness, through social media campaigns such as this, heightens the drink’s relevance to younger demographics in particular.
Guinness has managed to do this whilst continuing to maintain its traditional consumer base; “a fine balance”, suggests Euromonitor’s Malandrakis, which very few brands have managed to achieve.
Furthermore, while younger consumers are increasingly worried about affordability, Guinness is seen as an “affordable indulgence” – neither an economy brand nor premium, for many consumers it allows them to indulge without breaking the bank.
The rise of 0.0%
As alcohol declines, many drinks brands have ploughed investment into the no-and-low category, aiming at an audience that is no longer as interested in alcohol consumption as it once was.
Guinness has done well in this category because its flavour profile is so “characteristic and unique”, says Malandrakis; it provides consumers something they cannot get from other non-alcoholic beers. Essentially, its selling point is non-alcoholic Guinness, rather than just non-alcoholic beer.
“It’s the patience that paid off. And that patience is not counted in quarters, it’s counted in decades.”
Spiros Malandrakis, head of research for alcoholic drinks at Euromonitor
Guinness has invested heavily in its 0.0%, he says, paying particular attention to the mouthfeel and the pour.
“The successful launch of Guinness 0.0% is further evidence of the brand’s ability to adapt and cater to new and different audiences,” suggests AJ Bell’s Mould.
Long-term strategy
These things have been achieved whilst Guinness itself remains “basically the same”, says Malandrakis, at least in terms of the formulation of the drink itself. What has changed is how it is marketed, and the formats it’s presented in.
Guinness has been “patient”, he says; “this is not something that happens because of one successful advertising campaign overnight.”
In his view, Guinness’s success is a “decades-long culmination” of its successes, not giving up even when the brand was struggling.
“It’s the patience that paid off. And that patience is not counted in quarters, it’s counted in decades.”
