Guinness

During the 1990s, Guinness PLC—now marketing the cans with the amazing widget—continued to grow, with total gross income topping £4 billion in 1991 for the first time. The brewing sector represented about a fifth of the assets, around 40 percent of the income and 30 percent of the profits. Chairman Anthony Tennant reported that 1990 saw Guinness PLC emerge second only to Coca-Cola among the world’s most profitable beverage companies.

In 1991, extending the influence of the brand globally, Guinness Brewing Worldwide established licensed brewing agreements in Barbados, Burkina Faso, Congo, Gabon, Guyana, and Tanzania. The following year, the company entered into license arrangements in the Dominican Republic, as well as renewing an earlier licensed brewing relationship with South African Breweries (SAB) that had been suspended because of the worldwide boycott of South Africa over its practice of Apartheid. With that oppressive policy moved into the dustbin of history, SAB now made freshly brewed Guinness available in South Africa, the largest market in Africa and one of the world’s top dozen beer markets. In 2002, SAB became SABMiller with its acquisition of Miller Brewing of Milwaukee, Wisconsin, the second largest brewing company in the United States.

In the early 1990s, against the backdrop of major geopolitical shifts, Guinness Brewing Worldwide initiated new distribution agreements in Russia and Eastern Europe, and began contract brewing in Vietnam. Elsewhere in the Far East, Guinness Malaysia Berhad, which was 50.01 percent Guinness-owned, merged with Malayan Breweries Limited in which major shareholders included Heineken and Fraser & Neave. As a result of this 1989 transaction, Guinness PLC had a 25.5 percent share in the merged company, which was now known as Guinness Anchor Berhad (GAB). Fraser & Neave was a Singapore-based holding company (also partly owned by Heineken) whose assets included Asia Pacific Breweries, producers of the well-known Tiger and Anchor lager brands.

In 1995, GAB rolled out its Guinness Special Light Stout in Malaysia. It was described as being a “refreshing, easy-to-drink stout with less alcohol than Foreign Extra Stout,” but offering “the added flavor and satisfaction that consumers cannot find in existing Malaysian beers.”

During this same period, Guinness acquired and operated Spain’s Cruzcampo brewing company. That country’s largest and fastest growing brewer, Cruzcampo was known for lager brands such as Alcazar, El Lion, and Estrella del Sur, as well as Henninger, a lager brewed under license from the Henninger Brewery in Frankfurt, Germany. In 1991, the year of the Guinness acquisition, Guinness-owned Cruzcampo acquired a majority share in Union Cervecera, Spain’s sixth largest brewer. Denmark’s Carlsberg, a major shareholder in Union Cervecera, became a 10 percent shareholder in the new Grupo Cruzcampo. Guinness later sold its interest in Cruzcampo to Heineken, and as part of this transaction, the Dutch brewing giant agreed to distribute Guinness in Spain.

At the corporate headquarters in London, meanwhile, Anthony Tennant was succeeded as Guinness PLC chairman in January 1993 by Tony Greener, who had been named as chief executive in 1992. Greener joined Guinness PLC from Dunhill in 1986, and succeeded Vic Steel as managing director of the United Distillers component in October 1987. He served as group managing director from May 1989 until becoming chief executive. Though he had reached the top via the spirits side of the group, Greener had a great deal of interest in the brewing side.

In a September 1999 article in Forbes magazine, business writer Dyan Machan recalls being seated near Greener at a luncheon in the London corporate headquarters. Having been served a tureen of foie gras and wild mushrooms, she noticed Greener, now Sir Anthony, frowning over a glass of French wine. When she asked “with typical American tact,” whether a pint of Guinness could be had, she recalled: “His face lights up. ‘Yes, I believe we can,’ Greener says, pushing aside the cut-crystal wine glass. Normally not one to drink at noon, he sacrificed himself to please his guest.”

After consuming his can of Guinness Draft, Greener, like so many consumers of the product, ripped the can in two, took out the widget, “which he rolls admiringly between a beer-drenched thumb and forefinger.”

It was on Greener’s watch, that Guinness PLC was involved with several historically important and memorable consumer relations programs. In 1994, Guinness launched the Perfect Pint Initiative in the United Kingdom and Ireland. The idea that the consumer should get a perfect pint every time may not be unique to Guinness, but it is interesting to note that in the history of the brand it is a consistently recurring theme. It was the case when Michael Ash and his team perfected nitrogenation in the 1960s, it was the case with the development of the widget, and it was the case once again when Guinness PLC cared so much that the corporation launched an program aimed at the concept of the perfect pint.

As Tony Greener wrote in his report to shareholders, “Its unique and distinctive flavor makes Guinness stout a taste that, once acquired, is hard to relinquish—and as loyal consumers know, appearance and presentation are key to the appeal and enjoyment of the brand. Our challenge is to ensure that in existing markets the consumer gets a perfect Guinness every time—and that in new markets we create the widest range of opportunities for potential consumers to acquire the taste.”

Under this program, dispense system improvements were designed to deliver the beer in optimum condition, while a program of “trade and bar staff education” aimed to ensure that every pint or glass would be correctly served. The education included detailed training in the proper two-part pour and institutionalizing the “six steps to perfection” process.

The Six Steps to Perfection

Step 1: Select a clean, dry glass. Hold the glass at 45 degrees under the spout.

Step 2: Pull the handle slowly toward you and allow the beer to flow smoothly down the side of the glass (note: do not submerge the spout in the beer).

Step 3: As the glass fills, straighten the glass. Fill glass until full.

Step 4: Stand the glass on the counter and allow the gas to surge through the beer.

Step 5: To create the legendary head, push the handle backward slightly (this is known as “topping off ”). The head should rise just proud of the rim.

Step 6: Close the tap and present confidently to the customer.

Meanwhile, similar promotional initiatives were underway elsewhere, including continental Europe, which had seen consistent volume growth of over 20 percent. The Guinness Guild direct mail service brought technical and promotional information—in five languages—to the owners of 1,500 establishments serving Guinness.

Also during 1994, Guinness PLC launched one of the most audacious consumer promotions in the history of advertising. The company decided to promote the pleasures of the brand by giving Americans a little more than just a perfect pint with its “Win Your Own Pub in Ireland” contest. “Win Your Own Pub” worked as a spin-off of the perfect pint concept. Guinness lovers were asked to describe the perfect pint in 50 words or less, beginning with the phrase “ The Perfect Pint of Guinness is . . .”

The “Win Your Own Pub” contest was exactly that. As contestants read in the fine print, the winner really would become the owner of Connie Doolan’s pub at Cobh in County Cork. After 30,000 entries were evaluated and a winner chosen, Tony Greener happily remarked that the competition “provided more than just the opportunity to sample the delights of a pint of Guinness in an Irish Pub for Jay Mulligan from Boston, Massachusetts—he actually won his own pub.”

In a 2002 article naming the contest to a top 10 list of “Most Significant Promotions,” Promo Magazine, wrote “Guinness agencies Creative Alliance and Weiss, Whitten & Stagliano knew they had a killer concept ‘when we both had it on our lists,’ says Creative partner Nick Lemma. The campaign that was pitched cost about $1 million more than had been budgeted, but after Guinness group marketing director Todd Stevenson heard it, ‘He just told us, “Make it work.” . . . Two weeks later, we were on a plane to Ireland.’ ”

And repeated it was. The winner in 1995 was Frank Gallagher, who relocated from Florida to take the keys to the Kilgoban Pub in Bantry, County Cork. The following year, an Oregon woman named Shann Weston won the Seanachaoi Pub in Killaloe, County Clare. In 1997, it was Doug Knight, a Minneapolis musician who won Morrissey’s in Cahir, County Tipperary. A New York paralegal named Trevor O’Driscoll won Finucane’s pub in County Kerry in 1998, and Erika Lee of Portland, Oregon won O’Sullivan’s Pub in Newcastle West, County Limerick, in the final contest of the essay series.

Even as “Win Your Own Pub” was garnering headlines concerning pubs within Ireland, Guinness Brewing Worldwide had embarked on another far-reaching program, the objective of which was “to facilitate the development of authentic, high-quality Irish Pubs outside of Ireland.”

Recognizing that a large portion of its Guinness sales outside of Ireland occurred in Irish pubs, especially authentic ones, the company launched the Irish Pubs Initiative (later known as the Guinness Irish Pub Concept) to help people open Irish pubs around the world. As Tony Greener explained, “Professionalism and pride in the product are only part of the enjoyment of Guinness. Atmosphere and ambience are also important, and where better than the friendly surroundings of an Irish bar? It is no longer necessary to go across the sea to Ireland to find the perfect environment.”

Initiated in 1992, the program soon spread to places such as Canada, Singapore, and Finland. It was extended into the United States with the opening of Fadó Irish Pub in Atlanta in January 1996, the first of more than 130 such pubs in America. Because of “tied-house” laws governing the alcohol industry in the United States, Guinness was unable to participate financially in the pubs, but its pub business development team could assist owners in creating authentic Irish pub ambience, and train the bartenders to pour a perfect pint.

In 1995, Guinness Brewing Worldwide took the Guinness Irish Pub Concept a step further with the launch of a twinning initiative, in which some of the best pubs in Ireland joined in “big brother” type relationships with pubs elsewhere across Europe. Initially, more that 60 Irish pubs “twinned” with bars in Belgium, Denmark, Finland, France, Germany, Holland, Hungary, Italy, Spain, Sweden, Switzerland, and the United Kingdom.

Hand in hand with its successful consumer awareness initiatives, Guinness Brewing Worldwide continued to develop innovative advertising campaigns to support the flagship brand. The “Man with The Guinness” campaign, which was introduced in 1987, came to a close at the end of 1994 with a television commercial featuring the music of Louis Armstrong. The campaign is credited with reducing the age of the core Guinness drinker from 35 to 45 years to 25 to 35 years, giving Guinness an 80 percent share of the U.K. stout market.

In November 1994, Guinness launched the “Anticipation” campaign in Ireland and the United Kingdom. The idea was to illustrate the careful and unhurried process of pouring a pint of Guinness. The television commercials that were released as part of this campaign featured actor Joe McKinney, who became known as “the guy dancing round the pint.” The purpose of the amusing commercial was to show how you may spend your time while waiting for a pint to settle and to be ready to drink.

An old friend rejoined the Guinness advertising line-up again during the 1990s, though he was not featured on television. John Gilroy’s famous toucan, who had made only a couple of cameo appearances since Gilroy’s circus animals were phased out in the 1960s, was reintroduced in Ireland in 1994 as the Guinness mascot for the World Cup. Since then, he has continued to appear on various Guinness ephemera, from T-shirts to key chains and the like. As Eibhlin Roche told us, “the toucan and the harp are the most recognized Guinness symbols.”

While the toucan was flying back into the hearts of Guinness fans, two of the songs featured in Guinness commercials would reach the British pop music charts during the 1995—Armstrong’s “All the Time in the World” went platinum in the early weeks of the year, while Perez Prado’s “Guaglione,” the theme from the Anticipation campaign reached number two toward the end of 1995.

In 1996, the “Black and White” campaign was launched in the United Kingdom with the tag line “Not Everything in Black and White Makes Sense.” The opening pair of commercials, entitled “Old Man” and “Bicycle,” soon attained the highest rating for advertising awareness of any Guinness commercial ever, higher even that the Guinnless campaign of the early 1980s. The Black and White campaign was adapted for a variety of media, including posters, print ads, point of sale promotions, and memorable computer screensavers, as well as additional television commercials.

In May 1998, Guinness launched the “Good Things Come to Those Who Wait” Guinness Draught campaign, which was developed by Abbott Mead Vickers, the fifth advertising agency to possess the Guinness account since Benson’s in the late 1920s. It was this campaign that formally defined the notion that it takes 119.5 seconds to properly pour and serve the iconic perfect pint.

“We have run some really successful ads in the past focusing on why Guinness drinkers are different, but this new work focuses on why the Guinness perfect pint is different,” said Andy Fennell, the marketing controller for Guinness Great Britain. “Central to the development of the new campaign is the issue of time—the time that it takes to serve and anticipate a perfect pint of Guinness. This is, of course, not only unique to Guinness but is also a truth recognized by all beer drinkers.”

Guinness also launched several new additions to its portfolio of product variants during the mid-1990s. One of these was Kilkenny Irish Beer, an ale similar to Smithwick’s, but served using nitrogenation like that of Guinness Draught. The brand name is in fact a reference to the Irish city where Smithwick’s was born. The draught form of Kilkenny Irish Beer was first marketed in the United Kingdom in 1994, and introduced in Ireland the following year. Packaged Kilkenny for the home trade would appear in the United Kingdom in 1996.

At the end of 1996, when Tony Greener wrote that the year “was a landmark year for Guinness,” it was a lot like the end of 1981, when his predecessor, Benjamin Guinness, the Earl of Iveagh, wrote: “I believe that we will look back on the year under review and recognize it as a watershed.”

Just as Iveagh’s statement set the tone for the ensuing decade, Greener’s set the tone for the coming year and for the future of Guinness. Greener observed that the corporation had achieved record profits and record earnings, and that the two main brands, Johnnie Walker Scotch Whisky and Guinness Stout had both achieved record sales. He went on to note that these results flowed directly from “the investments made in the past two years, particularly the £75 million increase in marketing expenditure to build the appeal of our brands with the consumer, and our substantial investment in building our companies in developing markets.”

What truly gave the record earnings of 1996 landmark status was how they positioned Guinness PLC for the events of 1997, a year that would be one of the biggest landmarks in the company’s history. In 1997, Guinness PLC merged with Grand Metropolitan PLC (known as “Grand Met”) to form the world’s largest multinational beer, wine, and spirits company.

As Erik Ipsen wrote in the May 13, 1997, edition of the International Herald Tribune, “A conversation over dinner on April 10 between the chairmen of two of Britain’s leading companies [George Bull and Tony Greener] bore fruit Monday in the form of a plan to merge Grand Metropolitan PLC and Guinness PLC into a $33 billion conglomerate.”

The new company, which was originally to be known as GMG Brands, united the Guinness PLC brands with Grand Met’s spirits business and its Burger King and Pillsbury brands under a single corporate roof. The merged entity would rank as the world’s seventh-largest food and drink company in terms of the total value of the shares outstanding. It would rank as Britain’s eighth-largest company, based on market value. The new entity would control over half the global Scotch business, which was seen as the largest and most profitable category in the global spirits business.

Said GrandMet’s Bull at a news conference: “We have got a tremendous range of complementary brands. We fit geographically and our management shares a common philosophy.”

“Our strengths in developing markets will be one of the biggest attractions of these two companies coming together,” Tony Greener added. Greener and Bull would serve as co-chairmen until Bull’s planned retirement in 1998, when Greener would become sole chairman. In June 1999, he would be knighted for his role in making the merger possible.

As Ipsen pointed out, combining the respective beverage components of the two corporations would “form the world’s largest distiller and vintner, a subsidiary that will contribute nearly 60 percent of the combined group’s earnings. . . . The deal is a marriage of relative equals. As of Friday [May 10], Grand Met had a market value of £10.8 billion, compared with Guinness’s £9.8 billion.” Guinness PLC shareholders would receive 47.3 percent of the merged entity and GrandMet shareholders would get 52.7 percent.

The combined wine and spirits operations of the two companies would be rolled into a division to be called United Distillers & Vintners (essentially accomplished by adding the GrandMet brands to Guinness PLC’s United Distillers component), but Guinness Brewing Worldwide would be excluded from this unit as a separate division. Both Pillsbury and Burger King would also be separate divisions.

The company would be listed on both the London and New York stock exchanges. In addition to the Guinness brand, the beverage portfolio would include leading brands in numerous product categories including Bulleit Bourbon, Captain Morgan Rum, Crown Royal Whisky, George Dickel Whiskey, Gordon’s Gin, Hennessy Cognac, J&B Whisky, Johnnie Walker Whisky, Seagram Whisky, Smirnoff Vodka, and Tanqueray Gin. The single malt distilleries in Scotland included Blair Athol, Caol Ila, Cardhu, Clynelish, Cragganmore, Dalwhinnie, Glen Ord, Glen Elgin, Glenkinchie, Knockando, Lagavulin, Oban, Royal Lochnagar, and Talisker. Among many other holdings, the company also owned the Beaulieu Vineyard and Sterling Vineyards in California.

On October 30, 1997, the companies announced that the corporation that was to be created by their proposed merger would be called Diageo PLC, rather than GMG Brands. The term Diageo, based on the Latin word for “day” and the Greek word for “world,” was chosen to suggest that every day, everywhere, people celebrate with Diageo brands. The corporate slogan became “Celebrating life, every day, everywhere.”