Diageo plans major extension of Guinness brand with ‘Red’ launch

GuinessDiageo is gearing up for its first major new product development since the launch of Guinness Extra Cold in 1999. Guinness Red, a new product made from lightly roasted barley, will be launched in the UK over the next few months.

It is understood that, although it will have a distinctive red body, the drink will have a similar white head to standard Guinness and will also be poured in a two-step process. The alcohol by volume (ABV) will be comparable with the standard beer at around 4.1%. It will be launched into the on-trade but is likely to be extended to off-trade sale if it proves to be successful.

There are three Guinness variants currently available in the UK: Draught, Original and Foreign Extra Stout. In Ireland, Diageo is testing a lower-strength version of the beer, Guinness Mid Strength, with an ABV of 2.8%.

Guinness is performing well at the moment, with drinkers spending £1bn on the brand in the UK alone. It recently became the number four beer by volume in the on-trade, according to Nielsen, and is enjoying its highest market share, by value, of 7%.

But analysts have questioned whether Diageo can continue to build Guinness sales in mature markets such as Ireland and the UK. It is still primarily an on-trade brand, given the time it takes to pour a pint, and in Ireland it saw a sales dip after the introduction of the pub smoking ban, which suggests it may experience a similar fall when the ban is introduced to England in January.

Guinness was the first nitrogenated draught beer when it was introduced in 1958. In 1988 came the launch of Draught Guinness in a can, with the now-famous in-can widget. Earlier this year, the Guinness Surger, a piece of technology that recreates the iconic foamy white head using ultrasonic sound waves, was launched (MW February 23).

Diageo’s latest results show worldwide sales of £7.3bn, up 9% from £6.7bn a year earlier. Operating profits were ahead by just 6%, at £2.05bn. Beer accounts for roughly 20% of Diageo’s worldwide profits, with spirits contributing 70%, RTD 6% and wine 4%.

Diageo says Guinness represents 50% of beer volume sales.

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