Guinness sales up 4% as Diageo sees other beer brands decline

Sales of Guinness rose 4 per cent in Ireland for the 12 months ending June 30th, but other Diageo-owned beer brands declined by 4 per cent locally.

Diageo attributed the rise in Guinness sales to the success of its Brewers Project, which is based at the company's experimental Open Gate microbrewery at St James's Gate in Dublin.

Currently, more than one in three pints sold in a pub in Ireland is a Guinness-related beer, giving the brand a 34.6 per cent share of volume in the “on trade” pub sector.

Emerging markets

Globally, Guinness sales increased 4 per cent, largely on the back of increased sales in emerging markets. Diageo said net sales showed double-digit growth in Cameroon and Ghana and by 3 per cent in Nigeria, a key market for the company. Guinness also gained share and additional sales in Britain.

Hop House 13, one of the key beers to emerge from the Brewers Project, now holds an almost 3 per cent share of lager sales in Ireland, the drinks giant said. Other Diageo-owned beer brands, which include Smithwicks, and Carlsberg and Budweiser, the latter two of which are brewed under license, declined over the year.

Spirits

Diageo said sales of spirits fell by 1 per cent in Ireland. Gin was the fastest growing segment with sales of the premium brand Tanqueray rising 107 per cent in volume. Gordon’s grew 4 per cent over the same period with the brand representing one in every five gins sold locally.

Liquers, which account for 5 per cent of Diageo net sales locally, rose 3 per cent over the 12 months under review, led by Baileys, which was up 4 per cent due to double-digit growth in Britain.

“Sales in Ireland continued the momentum seen in the first half of the year to close with what I think is a strong result,” said Oliver Loomes, Diageo Ireland’s country director told The Irish Times.

“Beer remains really key for us in Ireland. The Guinness brand is critical and it’s encouraging to see a strong performance from it,” he added.

Group results

Elsewhere, Diageo Ireland’s parent returned to growth, after reporting a profit gain as improved demand for whiskey, tequila and vodka in the US offset declines in Brazil and China. Operating profit for the company, which also owns the Johnnie Walker, Captain Morgan and Smirnoff brands, was up 3.5 per cent for the twelve months ended June 30th.

Revenue increased 3 per cent versus the previous year. In Europe, sales were also up 3 per cent with Guinness rising by 2 per cent and Baileys by 9 per cent.

“The results position us well to deliver a stronger performance and our objective is for mid- single digit level growth and we’d be confident of achieving that,” said Mr Loomes.