What Diageo’s new London hub says about the future of Guinness

London is not exactly known for being the home of great Guinness. In fact there is even a Twitter account (@shitlondonguinn) with 62,800 followers dedicated to naming and shaming pubs and bars offering up atrociously served pints in the capital.

But despite the city’s reputation for poor pours, London has gone nuts for the brand over recent years, to the point where one in 10 pints sold in London is now a Guinness [CGA 52 w/e 4 December 2021].

So Diageo is returning some of London’s love for the brand with a massive £73m Guinness Hub in Covent Garden. The 50,000 sq ft site, unveiled last week, will house a microbrewery, events space, Guinness merch store, and create 150 jobs. It will also become the southern hub of Diageo’s ‘Learning for Life’ training programme.

So why has Diageo chosen now to build this giant edifice to the brand? And what does it tell us about the drinks giant’s wider strategy?

Such visitor experiences aren’t confined to the Guinness brand. Last September Diageo opened an eight-storey, 71,00 sq ft ‘visitor experience’ centre for its Johnnie Walker scotch in Edinburgh. These tourist traps “root the brand in its home market”, says one industry source.

Even if London isn’t strictly the home market for Guinness, “if you can hook into a consumer set of people in their 20s and give them an amazing day out, maybe it’s irrelevant where it is”.

It’s a sign of how dramatically booze marketing is changing. “The days of being able to invest in mass media like the classic Guinness adverts are over because of the way media is dispersed,” the source says. “It’s pretty hard to have one big programme, so investment is moving into experiential and point of purchase.”

Soaring sales

Guinness is a sensible target for this investment. Sales haven’t just been soaring in London – the brand has grown in popularity throughout the UK during the pandemic. Sales were up almost a fifth (18.4%) to £123.3m in grocery over the 52 weeks to 11 September 2021 [NielsenIQ].

What’s more, it’s the kind of brand that will attract tourists. Diageo has been ruthless about protecting Guinness’ status as a beer with premium credentials, the source adds. “It has a relatively low abv and its wholesale price to the trade is really high because there’s no competition,” they point out.

Plus, the brand rarely invests in any promotional activity in the mults compared with the likes of Stella, Heineken and Carlsberg. “They treat it like a spirits brand compared to the high volume, low margin beers of companies like Budweiser,” the source says. Which means Diageo has much more money to spend on marketing.

This all comes amid a sharper focus on the core Guinness brand. In the past year, Diageo has culled underperforming range extensions such as Hop House 13 and its Brewers Project beers in the UK. Instead, it is putting more focus on the main brand, which a Diageo spokesman says has led to “a positive impact and one we hope is also felt by our retail customers”.

This makes perfect sense at a time when retailers have been slashing unnecessary lines to prioritise top sellers and improve availability.

That’s not to say the brand has ditched NPD – it has just stuck to the core brand more closely. Guinness 0.0 finally hit the market last year following its false start in 2020, when it was recalled due to a microbiological contaminant being found in some cans.

So the new premises could just represent a further strengthening of Guinness brand – while giving Londoners a decent pint, too.