Guinness sales drop despite heavy promotion
Good things come to those who wait, according to one of its catchphrases, but fewer people are prepared to wait 119.53 seconds for a Guinness to be served.
During the past year sales of the creamy stout in Britain have fallen by seven million pints, despite heavy promotion of the 250th anniversary of Guinness’s Dublin brewery last year.
The decline is part of longer term trend: over the last three years British sales have slumped by £28.5m, according to a new report by the market research company Mintel.
Diageo, the British spirits group which counts Guinness among its prized assets Smirnoff, Johnnie Walker and Tanqueray, has tried, so far without success, to arrest the decline by a marketing blitz and new product launches.
Guinness, behind some of the most memorable marketing slogans, including Good Things Come to Those who Wait which stated the time it should take to pour, accounts for 54 per cent of all advertising on stout and bitter.
Earlier this year Diageo launched Guinness lager, which it is trialling in Northern Ireland, hoping it will fare better than a lighter version introduced three years ago, Guinness Red.
Diageo accounts show that less Britons drank less Guinness in the six months to February and less during 2009 than in 2008.
Although British sales by value fell by “only 1 per cent” in the year to June 2009, price rises – Guinness now costs an average £2.94 – have masked a steeper decline in volume.
Guinness’s GB Marketing Manager, John Roscoe, told The Independent sales by volume were down 2 per cent in the last 12 months, the equivalent of 7 million fewer pints.
“The major cause is the decline of the beer market,” he said. “People are going to the pub less and there has been a move away from beer and into wine and spirits.”
Pub closures are of particular concern. Out of 52,500 pubs, two per cent, 1,013 closed in the last half of last year and, although shop sales have been rising, they cannot make up for the fall in draught sales in pubs and bars.
In a report into the Ales and Stouts, Mintel estimated that in the three years to the end of last year, UK sales of Guinness fell by three per cent from £943m to £915m.
In pubs and other “on-trade” premises, they fell by £35m to £795m. Shops sales rose by only £6.5m to £120.3m – leaving a net loss of £28.5m.
Mintel was sceptical about its ability to counteract the long-term decline in pubs despite growing its share of the ale and stout market - which it said was not surprising given its advertising spend.
“It suffers from a similar problem to the ale sector in that it is overly dependent on pubs for its revenue... which has meant that its revenue has been declining rapidly in the face of pub closures,” Mintel said.
“Guinness has not had a successful innovation since its Extra Cold variant a decade ago. Guinness Red sank largely without trace, and it will be interesting to see whether its new Black Lager and Mid-Strength variants can take off and give its sales a much-needed boost.”
Mr Roscoe said the company was concentrating on improving the quality of draught Guinness in pubs, introducing the drink to new licensed premises and innovating - including the launch of Guinness Black Lager in March.
Guinness staff have been handing out the drink free. If successful, it is likely to be launched on the mainland, providing another twist to the drink referred to as a “Pint of Plain” in a poem by Flann O'Brien.
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