Subsidiary of Diageo, Guinness Beer Co.

Case Study

Strategic Communication

December 13, 2023

Christopher Rowe
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History and Overview:

In 1759, sir, Arthur Guinness brewed his first batch of ales at the St. James Gate Brewery in

Dublin Ireland. That same year he signed a 9000-year lease at £45 per year, for the St. James

Gate Brewery. And in less than 10 years he shipped 6 1/2 barrels to Great Britain to complete his

first international export. Within 100 years of his first export, Guinness beer company became

one of the top three British and Irish breweries. In 1886 Guinness made its first public offering

on the London stock exchange after Arthur Guinness, his grandson, Edward sold his 65% stake

in the company, valued at roughly £6 million or ~1 billion USD today. The very first day of the

IPO the stock soared 60%, and Guinness was on its way to becoming one of the largest breweries

in the world. By 1914 and the onset of World War I Guinness beer was the largest beer supplier

in the United Kingdom supplying more than 10% of the United Kingdom‘s beer market and

producing more than double the barrels than its nearest competitor, Bass. To help support the war

effort the company lent motor vehicles to military authorities, as well as sold horses, motor

vehicles, and Guinness, his first steam ship the SS W.M. Barkley, which had just been acquired

the year before. Land that had been previously used for barley growing, was restricted by the

government to increase food supply. The company also paid half wages to the soldier's families

at home who volunteered, as well as the guarantee of a job when they return, out of the 800

volunteers from Saint James brewery, 103 of the men did not return, five of whom went down

with the SS W.M. Barkley on October 12, 1917, after a torpedo attack. It was not until 1921

when all restrictions were lifted that the beer company was able to get back to pre-war strength.

World War II, however, was a very much different story, as the United Kingdom lifted commerce

restrictions on Ireland, due to the greater demand for the product among soldiers. But there was

one major issue with the company's religious policy, as before 1939 if Guinness brewers wished
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to marry a Catholic, his resignation was requested and the company “did everything I could to

not employ Catholics until the 1960s” wrote Thomas Molloy of the Irish Independent. The

controversy for Guinness was not over yet as in the 1980s, Guinness considered dropping its

Irish heritage and logos due to the IRAs bombing campaigns across London and Great Britain.

Instead, Guinness made public statements for non-violence among Irish People helped break up

the tensions. Finally in 1997 Guinness and Grand Metropolitan formed to create Diageo, but due

to the extreme controversy of the merger, Guinness maintained itself as its own separate entity.

Advertising:

Early advertisement:

For 35 years, Guinness Beer had no advertisements. The engraved image (Appendix A) was

published in the United Kingdom’s ‘Gentleman’s Magazine’, with the caption “Health, peace and

prosperity”, words that fall short of a beer company in the modern age of medicine. However,

those words stood the test of time when relating to the company itself, 264 years of Guinness

Beer growing to one of the largest beer brands in the world.

It wasn't until 1862, Guinness made its second largest advertising change by adopting the harp

logo as its main brand image. Advertisement was not a major aspect of Guinness’s brand up until

the late 1920’s, in fact it was almost strictly by word of mouth. S.H. Benson an ad agency from

London was hired by Guinness in the early 1930’s after a decline in sales, what would happen

next is considered one of the most successful and well known advertising campaigns in history.

Until the 1950’s doctors believed Guinness had beneficial medical properties and was even given

to Irish mothers after giving birth in hospitals due to the high iron content. Because of this

common belief of the time, so it's no question why ads such as “Guinness is good for you”,
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“Guinness for strength”, and “a Guinness a day” (a play on “an apple a day keeps the doctor

away”) were more than successful. And in a recent study by the University of Wisconsin it was

discovered one pint of the drink a day has the same or similar benefits to that of one aspirin a day

for the prevention of heart attacks. As well as the iron rich beverage being one of the top

suggestions by OB/GYN’s for postpartum mothers, not breastfeeding who wish to consume

alcoholic beverages.

Africa:

Guinness history with Africa, first started back in the early 1800s as the brand was building its

own ships to expedite the export of its own products farther than any of the other competition in

much faster. Ginnis first arrived in Africa through Sierra Leone in 1827, and soon established a

major presence in Nigeria Africans across the continent fell in love with the Irish beer company.

Guinness was also one of the first western beer companies from outside of the continent to

premier and showcase Africans in their advertisement campaign. Nigerians, in particular fell so

much in love with the beer that many claim it as their “ national beer”.

Guinness is advertising campaign has only gotten better in Africa, as time has progressed new

slogans such as “ black is not a color, black is an attitude” and “black got swag” have emerged

and helped promote the business as well as a newer “African special” beer Guinness produces,

made with the “tastes of Africa”

Guinness is in fact, so popular in the continent of Africa that holds around 40% of worldwide

total Guinness sales. Nigerians annually consume the second most amount of Guinness in the

world, beating out its country of origin Ireland(third). Cameroon is the fifth largest consumer of

Guinness beer in the world just behind that of the United States despite having a population size

nearly 12 times smaller!

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SWOT Analysis:

Strengths:

● Advertisement

○ Guinness's first ever major ad campaignTurned out to be one of the most

successful out of any company in history.

○ Simplicity of advertisements.

○ Cultural advertisements for different markets.

○ Extensive use of imagery and digital advertisements.

● Legacy and History

○ One of the most recognizable beers in the world.

○ Over 250 years of history.

○ Simple and similar products with a specific audience group.

○ Complex and unique history and taste of the Stout.

● Africa

○ One of the largest global markets heavily untouched by Western breweries.

○ Strong foothold on the continent already exists

■ Several Breweries on the continent.

■ Top beer in several African nations.

■ Massive populations

■ Cheaper production costs than that of Europe, America’s and Asia

■ “National beer of Nigeria”

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Weaknesses:

● Taste

One of Guinness’s biggest strength is also one its greatest weakness. Guinness and stout’s

in general have a very different and specific taste that not many casual drinkers enjoy,

especially in Western nations, making it much harder to expand consumption to new

customers or individuals looking for something new/different.

● United States

Over the last few decades more and more Americans are preferring ‘Light’ beers, due to the

simple and basic taste as well as the increase in health consciousness, where more Americans

and other western nations are putting a large focus on the lessening of calorie consumption.

There is also a much greater push now for products consumed by Americans to be produced in

America, and with such a strong Irish heritage, the brand thus strongly relates to only the ~9.5%

of Americans with direct Irish heritage.

● How to overcome these challenges?

○ More Guinness breweries in the United States

○ Expand advertisements for “The Baltimore Blonde”, and create different

variations of the product to be more appealing to younger Americans.

○ Be more direct with nutrition aspects in advertisements

■ High Iron

■ Low Calorie (~120 cal, per 12 oz stout)

■ “Antioxidant compounds” similar to fruits and veggies

○ Showcase the history

■ Create the stronger brand identification among Irish Americans

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■ History of working with Ireland to help the United States (WWI,WWII)

Opportunities:

● Africa

○ Through advertisement and acquisition or innovation of new products, Guinness

can create a monopoly on the continent.

○ Massive and ever expanding population

○ Growing rate of beer consumption, higher than any other continent. (Appendix B)

● Liquor:

○ Diageo

○ Some of the most popular and recognizable liquor brands

○ Bailey’s partnership (sweeter mixed liquor)

or

○ Crown Royal or Captain Morgan (basic stronger liquor)

● Light Beer:

○ Expand ‘The Baltimore Blonde’ line.

○ Showcase nutrition facts in advertisements.

○ Seltzer’s, or fruity flavored stouts for younger individuals.

● Coffee:

○ Guinness drinkers are also highly likely to be coffee drinkers as well

○ Expand advertisements for the ‘Nitro Guinness’

○ Expand/reopen the coffee market within the company to target younger

americans.
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○ Create a line of non-alcoholic coffee.

Threats:

*Threat severity listed; Highest to lowest risk

● Castle Milk Stout (South Africa)

● Doppel Munich Stout (Ethiopia)
● Keroche Valley Malt (Kenya)
● St. Louis Export Stout (Cameroon)
● Kilimanjaro Premium Lager - Dark (Tanzania)
● Club Stout (Nigeria)
● Eagle Stout (Nigeria)
● Legend Extra Stout (Nigeria)

Though these are not Guinness’s largest competitors worldwide, they are the greatest threat to the

expanding African market. McGuinness ' interest in the African market, These competitors must

be looked at very closely to help minimize the risk of loss in market share and expansion within

the continent. To combat the growth of these brands Guinness has two clear options, first being

the acquisition of its top competitor(s) on the continent to help fortify the growing monopoly on

the continent. Or second, create an entire new line of ‘African special’, with several variations to

expand the customer range and overall enjoyment of the products. Castle Milk Stout is the

largest threat to Guinness in Africa due to it’s different, unique sweet tastes and texture, often

described as “milky”. Guinness is second behind Castle Milk in South Africa making it the most

likely threat to Guinness on the continent. To prevent the expansion into Guinness dominant

territories there needs to be increased marketing in the country as well as a new stout to fit the

tastes of the South African people, whether it be through acquisition or innovation.

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When the threat of Castle Milk subsides, the expansion and growth opportunities for Guinness in

other countries across the continent are likely to have little to no chance at stopping Guinness

from being the most popular brand in almost every sector of the African market.

Conclusion

For Guinness to continue its great success for another 264 years the greatest thing the

company can do for itself would be to ramp up their global advertising campaign, especially

within the United States and African markets. But that alone will not guarantee the future

success of Guinness has the company will need to create, or acquire different kinds of their

famous stout to help diversify their product line for more individuals varied tastes. There is

also great opportunity for expansion within the company as more beer brands are creating their

own liquor based off of their original product such as Twisted Tea, and Dogfish. Guinness also

has a great competitive advantage over these other brands with the conversion to liquor, with

Diageo who already owns several of the most popular liquor brands in the world such as,

Crown Royal, Smirnoff, Johnny Walker, Kettle One, Don Julio, Tanqueray, Captain Morgan,

Baileys, and Ciroc. All of these different brands give Guinness several fantastic opportunities

to come up with a great variety of stout style liquors. Guinness has the power through

acquisition, innovation, and advertisement to be one of if not the largest and most recognizable

alcohol producer in the world.

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Appendix A:

Appendix B:
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● “https://www.in2013dollars.com/uk/inflation/1886?amount=6000000. Accessed 12
December 2023.
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2023.
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Marketing91, 14 April 2019,
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● “5 Health Benefits Of Guinness.” Virginia Spine Institute, 14 March 2017,
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● “Guinness.” Wikipedia, https://en.wikipedia.org/wiki/Guinness#History. Accessed 12
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June 2018,
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https://kapastor.medium.com/why-did-doctors-prescribe-guinness-to-pregnant-women-77
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