The path to innovation is often fraught with risk and potential failure.
Innovation to meet the needs of consumers is the cornerstone of many great brands’ strategies. Yet, when innovations don’t take off, the failure can be extremely costly for businesses.
The most successful brands manage to launch innovations that drives new demand from consumers, while staying true to what made the brand great in the first place.
That’s certainly true for Guinness, which is Marketing Week’s Brand of the Year 2023. In the last few years, the Diageo-owned stout brand has successfully launched NitroSurge, a device that allows consumers to replicate the famous Guinness pub pour at home, and Guinness 0.0, the alcohol-free version of the beer.
Guinness 0.0 was launched in 2021 to much excitement from fans of the beer, who had been eagerly awaiting a non-alcoholic version of the distinctive stout, as other big brands launched no and low alternatives.
It has become the fastest-growing non-alcoholic beer globally, and, in the UK, is the best-selling non-alcoholic beer in the four-can pack format. Diageo claims the product has added 500,000 incremental consumers to Guinness year on year.
In short, the launch of Guinness 0.0 appears to have been a home run for Diageo. However, the path to success was far from straightforward, Diageo’s chief innovation officer Mark Sandys tells Marketing Week.
Sandys has spent more than 26 years at the drinks giant, joining as a graduate trainee on Guinness.
Across his two-and-a-half decades at Diageo, he has held roles in marketing, innovation and heading up categories. Before being promoted to chief innovation officer he was global head of beer, Baileys and Smirnoff at the business.
It was at this period that Guinness launched its 0.0 product, something Sandys was pivotal in leading on.
What went wrong?
Sandys helped lead Diageo to enviable success with the launch of Guinness 0.0. However, the road to success was paved with missteps, including several false starts and even a full product recall.
While Guinness 0.0 was only launched two years ago, the ambition to launch a lower-volume version of the beer was long-standing.
Around a decade before Guinness 0.0 hit the shelves, Diageo launched Guinness Mid-Strength. This was a version of the beer, which had a 2.5% ABV measure.
“We thought this was going to be hitting exactly the right spot for people,” Sandys says. “It was still Guinness, it was still alcoholic, but it was this lower-strength drink that would allow you to participate in different occasions, like midweek occasions.”
He adds that the quality of the product was strong, with it being difficult to tell the difference between original Guinness and the mid-strength version.
But “it just absolutely bombed,” he says.
Sandys diagnoses the failure of the product to take off as being a case of a good product, launched at the wrong time. While markets like Australia have a well-established mid-strength category, this was simply not the case in the UK or Ireland.
“Guinness likes doing things first and being a leader, but the market wasn’t quite ready,” he states.
Guinness Mid-Strength was sold for a few years in Ireland before Diageo determined it wasn’t resonating in either the brand’s home market or the UK.
Mid-Strength was designed to be a lower ABV version of the original beer, and so, Guinness decided it would next create a new distinct non-alcoholic brand.
Another false start
Guinness Open Gate Brewery ‘Pure Brew’ was a 0.5% ABV lager, created by the business. The product took a long time to create, Sandys says, describing the process of finding a yeast that doesn’t ferment to create the lager as a “scientific breakthrough”.
“It led to this unbelievable beer, which I can say, hand on heart, is the best non-alcoholic beer that’s ever been created,” he says.
While the quality of the product was strong, like with Mid-Strength, Pure Brew did not fare well commercially.
“I personally really kind of held out for this and was convinced that it was the right way to go to create a new brand that had its own associations of being non-alcoholic,” Sandys says.
In the end, the positioning for Pure Brew was too complicated, he states. Pure Brew brought with it all the challenges of launching an unknown new-to-world brand, meaning it just didn’t take off.
The market was ready
Despite two false starts with mid- and low-strength Guinness products, the brand still wanted to create a non-alcoholic product. By this time, it was seeing its competitors launch non-alcoholic versions of their main brands and realised it ought to do the same.
“It was a risky thing to do because it’s such an iconic beer, expectations are so high,” Sandys says.
With those expectations, Diageo took two years to get the product right. It faced the challenges brought by lockdowns in 2020 but eventually, its brewers hit the right formula.
In November 2020, Guinness 0.0 was launched with great fanfare. Sandys notes Guinness had been really pleased with the coverage the launch had garnered from the media both in UK and in Ireland. The company had also sent out early samples to its celebrity fans to have a sneak preview.
At the time, it felt awful. It felt like one of the worst moments of my career.
Mark Sandys, Diageo
But the excitement to launch Guinness 0.0 was abruptly brought to a halt.
“I got a call from the brewery early in the morning to say that there was a problem with the beer,” Sandys says.
In its quality testing, the brewery had found issues with the liquid. At the time, Diageo said it had found a risk of “microbiological contamination” in the beer.
“Initially, I was thinking, this is really frustrating, we’ve got off to a good start, this is going to delay the rollout,” Sandys says. “Actually, it was worse than that. We had to do a full product recall.”
In his nearly three decades at Diageo, he says he can’t recall another time when the business had to do a full product recall.
How things unfolded
Sandys distinctly remembers how bad that period felt, deep in the lockdown winter of 2020, when Guinness had to do the recall.
“At the time, it felt awful. It felt like one of the worst moments of my career,” he says.
The company had to go out to all its celebrity partners, asking them not to drink their Guinness 0.0 samples. It also had to inform its retailers it would not be launching the product.
At the time when the business had hoped to be attracting positive press through its launch, media outlets were splashing the news of “contamination fears”.
Having to recall a product over safety concerns is a nightmare for any business but the reaction from the very top of Diageo was to support the team.
“One of the things that was really important around that time was our CEO at the time, the late great Sir Ivan Menezes,” Sandys says.
As a leader just showing up and signalling that you don’t know the answers, talking about your failures and where you’ve got things wrong makes a big cultural impact.
Mark Sandys, Diageo
Menezes reaction to the failure was to celebrate the work of the brewers. While acknowledging the failure, he emphasised to the rest of the executive team that the priority now was to support the work of the brewers.
“That very visible support that he gave was critical, it made an enormous difference and it made sure that we took the breathing space to get it properly right,” he said.
In August 2021, Guinness 0.0 was launched again. In the intervening time, the team took time to “really interrogate” what had gone wrong in the process. The business was also in contact with its big retail partners, keeping them up to date on the quality assurance checks it was undergoing.
Sandys says that one of the things that was of reassurance to its retail customers was that Diageo itself had picked up the issue, rather than this being something that had come from the consumer.
“Actually, even though it didn’t feel like it at the time, it was actually a really important sign of the lengths that we go through to ensure quality,” he says.
Despite the recall, Guinness 0.0’s second launch in August 2021 proved to be a resounding success.
“It has gone from strength to strength,” Sandys says.
The success of Guinness 0.0 saw not just one, but several missteps along the way. Although the 2020 product recall was the most publicly visible failure, Sandys had also been part of two unsuccessful launches in the lead-up to the eventual launch.
While these false starts were frustrating, Sandys says it was the learnings the company took from the failures of these products that gave it the confidence to then make a big bet on Guinness 0.0.
“One of the gifts you get from perspective – I’m in my 27th year of working at Diageo now – you realise that when we do have innovations that aren’t successful, they don’t work but they’re also not an anchor on the brand, you’re able to move on to the next thing,” he says.
“All of these were intelligent failures. You’re almost planning to fail and iterate and experiment,” he states. “In innovation, we’re increasingly setting ourselves up so that we can experiment and fail and learn at a small stage, before then choosing what to invest behind.”
There will be some things that don’t perform as well as expected and others that exceed expectations.
“I think part of the job of being innovation leaders is to not pre-destine what’s going to be the outcome before we’ve actually seen how consumers are going to respond,” he says.
When it came to the recall and the issues that caused that, Sandys had to rely on the expertise of his team. Brewing non-alcoholic beer is a difficult process, one in which he is not necessarily the functional expert.
In that situation, as a leader, “you’ve got to lead with questions rather than lead with answers,” he says.
Posing the questions to help the functional experts get to the solution was a big part of Sandys role at this time, as well as ensuring the team felt supported and didn’t feel as though the recall was a mark against their achievements in their career.
Approach to failure
Diageo has built a culture that actively embraces the potential for failure and the learnings that can come from making a mistake.
That culture comes from the top down.
“If as a leader, you give the impression that you’ve got the answers to everything and that failure is not an option, then I find ultimately, that creates a culture that really limits the potential of your organisation,” Sandys says. “Because everyone looks to the leader to give them the answer rather than feeling like they’re empowered to go and find new answers and challenge the existing perceptions of how things are done.”
If you’re not pushing out and risking failure, then you’re not doing your job fully.
Mark Sandys, Diageo
“As a leader just showing up and signalling that you don’t know the answers, talking about your failures and where you’ve got things wrong makes a big cultural impact,” he adds.
Recently Diageo gathered its most senior leaders and encouraged them to each talk about their biggest failure to others.
“We’ve made some big mistakes and yet we’ve learned from them, we’re still here, we’re still thriving in our jobs,” he says.
“If you’re not pushing out and risking failure, then you’re not doing your job fully. I need to make sure that I’m encouraging my team to swing out as much as possible.”