BBC News
watch One-Minute World News
Last Updated: Friday, 23 November 2007, 00:06 GMT
Last orders for Guinness?
By Debbie Fabb
BBC Money Programme

Guinness
Guinness: is the glass half full or half empty?

Guinness is one of Britain's best loved brands, yet sales of the famous black stout have been falling year after year both in the UK and Ireland.

But with nearly 250 years of history behind it, Guinness is not about to go quietly.

It has launched a fight back with a new lighter, sweeter version, Guinness Red, and a much hyped multi-million pound advertising campaign.

Will it be enough to reverse the decline?

Global reach

In the last two years Guinness sales by volume have declined by 13% in the UK and things are even worse in Ireland, where sales are down nearly 30% since 2001.

Guinness sales

Guinness is however, continuing to perform well in some markets, particularly Nigeria and America.

In the UK and Ireland, a growing taste for lighter, blander, more refreshing drinks and a long term shift to entertaining at home, have taken their toll on Guinness's sales.

Despite this, the brand is hopeful.

"You're talking about a company that's been around for 250 years and a brand that has been growing from strength to strength, not just in this market but all over the world over that time," says Philip Almond, marketing director for Guinness GB.

Something refreshing

Andy Lee and Ollie Scott are typical of the sort of consumer Guinness wants to attract.

Guinness could look to new territories for salvation

Both are young professionals in their late 20s, they meet regularly for a game of football and a post-match pint.

But it is lager, not Guinness they go for.

"It's just what you want after a game, because it's refreshing," says Mr Scott.

The preference for "refreshing" drinks is a trend that has seen lager brands grow their market share from just 7% of all beer sales in 1970 to more than 70% today.

More recently, it is reflected in the "cider over ice" phenomenon, started by Magners and Bulmers, which has added more than 200m to cider sales.

Amongst the wines, it is rose that has been the winner, with sales increasing 188% since 2005.

Guinness Red

Guinness's secret weapon, Guinness Red, "is still a stout, but it's slightly smoother and sweeter than the mainstream Guinness", Mr Almond says.

Calories

"It's aimed at people who perhaps enjoy other beers and other drinks and are looking for something a little bit more refreshing."

Following a six month trial, Guinness is spending 2.5m on rolling out Red across the UK. It is the brand's biggest attempt yet to lure back lager and bitter drinkers.

Critics question whether it is the right product for the job.

"It maybe bridges the gap between a stout and an ale," says Ian Bell of Euromonitor. "But if you look at the reality, where both the stout and the ale market are declining, something which sits on the fence between the two is probably unlikely to work."

From pub to home

There is another problem for Guinness to address.

Guinness Red
Great Guinness advertising did not equal great Guinness sales
Julian Spooner, former Guinness' marketing director

At the moment, Guinness Red is unavailable in cans, yet more of us are choosing to drink at home.

Fifteen years ago, only a fifth of beer drinking was done at home. Now it is 43%, and rising.

Despite revolutionising the home drinking market in 1988 with the launch of the "widget" - a bit of plastic inside a can that makes the beer inside frothy when poured into a glass - Guinness has struggled to be accepted away from the pub.

The message

Guinness is almost as famous for its adverts as it is for its beer.

"Guinness has survived as a brand as well as a product, and that's what's enabled it to stay afloat when lots of its peers absolutely drowned," observes advertising guru Peter York.

A BRIEF HISTORY OF GUINNESS
1759 - Arthur Guinness signs a 9,000 year lease on a disused brewery at St. James's Gate, Dublin
1769 - The first export of Guinness leaves Dublin: six and a half barrels bound for England
1886 - The Guinness brewery becomes the first major brewery to be incorporated as a public company on the London Stock Exchange
1936 - The first Guinness brewery outside Ireland is opened at Park Royal, London
1958 - Guinness draught is launched
1963 - The first brewery outside Britain and Ireland opens in Nigeria
1988 - The 'widget' is launched, and Guinness is available in cans
1998 - Guinness Extra Cold is launched
2005 - Park Royal brewery in London closes
2007 - Guinness Red is launched

In 1999, Guinness launched its famous "surfer" advertisement: a surreal black and white story of a surfer waiting for the perfect wave as white sea-horses gallop around him.

Culminating in the tag line "Good things come to those who wait", the advert won several industry awards, as well as the public vote for best ever advert in a TV poll.

It was the epitome of Guinness advertising: sleek, stylish - and surreal. And that, for some, was the problem.

"I think it had gone too far away from the product," says Julian Spooner, former Guinness' marketing director.

"It created a separation between Guinness, the advertising brand, and Guinness, the brand itself. So great Guinness advertising did not equal great Guinness sales."

This month Guinness has launched its most complex and expensive advert ever: Tipping Point.

Yet again the beer maker has gone for the surreal, with the inhabitants of a remote Argentinean village using everyday objects to create a domino-style toppling sequence through the village streets.

The culmination is a giant statue of a pint of Guinness made out of books and the old tag line "Good things come to those who wait".

The real question is this: Will it help the brand increase sales?

The Money Programme: Last Orders for Guinness? - BBC Two, Friday 23 November at 1900.

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific