Craft Beer Marketing Series - The Evolution of Guinness
When's the last time you took a look at the SUV market? Ever year, like clockwork, car manufactures come out with latest iteration of their SUVs, touting the latest in comfort, safety, connectivity, fuel-efficiency, and attractive styling. Consumers like SUV's because of their perception around what an SUV can do for them and their family. To the buyer of an SUV, it represents an intelligent trade-off between safety and fuel-economy, space and comfort, all while keeping you lofted off the asphalt high enough to look down on the plebeians in their slovenly, boring little cars.
I'm sure it's not actually this polarizing, as these car companies sell a lot of cars too, but it paints a distinct picture around the marketing that these car companies do on a daily basis to reinforce this point to their target audience. If you don't think marketing works folks, just take a look around and tell me what you see driving on the road right now.
Now let's take a look at one of America's most iconic car companies...Jeep. Jeep has been making Jeeps for almost 100 years, and while they've certainly evolved over the years, their message has barely changed at all. Buy a Jeep because it's a Jeep and it'll take you across any terrain without a problem. Jeep's ads, to this day, will essentially still deliver this message as a core competency of their product.
Why mention all this when I'm trying to make a point about Guinness? Jeep and Guinness share a very powerful branding strategy. In a nutshell, both of these companies have been completely defying categorization since they were born, eschewing labels and creating their own signature concept of what they are and how you should perceive them. Jeeps aren't SUVs. They've never called themselves "SUV's". They've called themselves "Jeeps". And you probably don't perceive a Jeep as an SUV either, if you give it a minute of thought. You probably think of it as a Jeep. Look at this headline from yesterday (9/20). It doesn't say "Man found dead with gunshot wounds under SUV"....it says Jeep. This isn't an accident.
Along the same line of logic, Guinness is not a beer company. It doesn't produce a series of ales and lagers , and has never branded itself as such. Guinness (the company), for the last 250 years, has made Guinness (the beer), one of the world's most widely distributed products, sold in over 150 countries across the globe. You may or may not like Guinness, but its complete market saturation and ubiquity is the result of a global population that has grown up with the product on tap and available at a local pub. Guinness doesn't make beer, it makes Guinness. I could go into the history of Guinness's irreverent and highly original marketing, but that's another article altogether.
Instead, let's focus on what that means for Guinness in today's evolving American beer market. Specifically, how are they going to maintain their current level of market penetration (and sales) when consumer tastes are evolving so quickly? Today's consumer craves variety, locality, and familiarity. They want to fundamentally understand what they're buying, why they're buying it, and where it's coming from. Factually, Guinness is a beer from Ireland made from some ingredients that we don't really know about. It's extremely creamy and smooth, totally opaque, original in its taste, and takes a long time to pour from a draft tower. These are all facts about Guinness that a consumer probably knows, but it doesn't change the fact that Guinness itself is still a mysterious beverage not brewed in the U.S, and not particularly innovative in its approach to the modern beer drinker. Guinness has a challenge ahead of them, keeping their product relevant and striving to resonate with a younger consumer base.
Enter Guinness Nitro IPA. I had a chance to try this guy the other day at a release party in New York City, and it was quite a show. Totally genuine in their communication, and generous during the event, Guinness had me come downtown for a nice dinner and a little background information on their latest, only-for-America creation. This is their answer, it seems, to the issue of resonating with the modern american beer drinker. This is Guinness's subtle, tasteful attempt at taking a bite back at a craft beer industry that's been slowly nibbling away their market share for 10 years. Budweiser, in their own brash way, has been doing this as well.
So Guinness is an established global brand. They've got a dedicated consumer base who loves Guinness. Ostensibly, they make a product that is still quite unique. Nothing, even here in the states these days, tastes quite like it. American craft breweries are pumping out a wide swath of delicious nitro-stouts that I love to drink, but they're not quite Guinness. They might be better or worse, but Guinness has maintained its brand purity relatively well through the growth of great local beer.
Guinness also sells a LOT of beer in the states, and I think they'd like to keep it that way. Here's a point of comparison for you, based on numbers I've roughly put together. Lagunitas, Bell's, and Deschutes are three craft breweries in the top 10 producers in our country. Independently, they make hundreds of thousands of barrels each of beer per year. That is a LOT of beer.
If you combined these three brewery's entire 2014 production together, you still wouldn't have as much beer as Guinness sells in the states. They are a big fish in a big pond, and while they haven't painted a target on their back the way our own domestic producers have done, they're still distinctly aware of their place in the market. They're sales were down last year, and I'm sure they'd like to keep their growth positive in the U.S, which is their largest market.
The Nitro IPA is an interesting strategy. Certainly not a core competency for Guinness, which has been making dry, malty stouts for hundreds of years. They're first attempt at a mass-produced IPA is a solid beer, and is certainly unique, just like their original stout. I can't remember tasting a beer with this combination of aroma, mouthfeel, and smoothness. Marketed on its sessionability and "nitrogenation", this IPA will have a hard time competing with American IPA fans, simply because it's mild, balanced, and lacking the crisp, sharp palate that defines the modern IPA here in the states.
This whole "nitrogenation" concept, with the "widget" inside each can that releases nitrogen when you pop the top, is interesting as well (you've heard it if you ever shake a can of guinness when you're done with it). Guinness, with its famed head that never goes away, is super smooth and creamy because the tap it pours from combines just 25% CO2 with 75% nitrogen, which doesn't dissolve into the beer. It's a selling point for Guinness, and this new IPA has the same selling point built-in. It's supposed to calm the palette of the beer, and make for a more balanced approach to a beer that's still bright and citrusy.
The competition is fierce, and even though Guinness has done a great job over positioning itself as a unique, independent product from Ireland, it will be hard to to find the consumer willing to straddle that line between ultra smooth and "IPA". Jeep has successfully reinvented itself a few times while sticking to a core message, and Guinness has been around a few hundred years longer, so maybe they've got a chance. I like drinking Guinness, and I like drinking local craft beer even more. So far they've lived in relative harmony, so let's see what happens next.