In The Black
The Grocer reports bad tidings for Diageo, makers of the “black liquidation with the froth on the top”. Sales of their star brand Guinness have fallen by nearly 10 million pints in the last year. That breaks down into a 15.8% fall for Guinness Draught and a 5% slump in Guinness Original sales.
Now, Guinness is a market leader and is a very heavily advertised brand. Indeed their esoteric adverts, while baffling the public, have long been the darling of the advertising industry. But times change and sales have been in decline for some time now.
Experts attribute various reasons for the fall-off in sales. Their traditional market is shrinking: there is a general shift towards lighter drinks and the growing premium bottle market has made inroads into their customer base.
Guinness is also under increasing pressure from the supermarket’s own brand Stouts. This is a difficult front to fight on as Guinness has traditionally been priced as a premium product. However, it seems that with Tesco’s Simply Stout available for £1.33 compared to £1.89 for Guinness, customers are voting with their wallet.
However, as you might expect, Diageo are not ready to throw the towel in just yet. They claim some of the fall in sales is down to customers switching pack sizes and will address the issue with a greater emphasis on “pack differentiation”. They also aim to hit back with that most traditional of weapons: advertising-£33 million of it, to be exact.
Most experts seem to think that Guinness is in irreversible, if gradual, decline. Whether the might of Diageo can prove them wrong, we will have to wait and see.