HomeOpinionGUINNESS: A SAD REQUIEM by Roland Uzor


The story behind Guinness is one of a company that once dominated a market segment but was unable to anticipate market swings and consumer fickleness. Guinness first lost the beer market when Harp and Satzenbrau started dying around the mid-2000s after these brands were decimated by Nigerian Breweries’ expansive portfolio of beers and lagers. While Guinness shuffled Harp by diluting it through triple filtering in a bid to lighten it and make its taste have a cross appeal,it could not achieve the expected market increase with the once strong tasting beer. Harp failed to spring up despite huge amounts spent on advertising and promotions. At a stage,it was “Buy one and get one free” promotion by Harp in 2008/2009. All to no avail because at the same time, Nigerian Breweries had commenced an acquisition spree of struggling beer brands. In the South East,a very crucial market for beer, NB bought over Life Beer, and also acquired 33 Export Lager, a beer that was once owned by Continental Breweries at Awo omama in Imo State. Guinness followed suit by buying Dubic, established by Chief Dike Udensi(a mogul who also owned defunct Citizens Bank) but Dubic Beer was dropped when NB introduced cheap beer brands leaving only Dubic Malt to soldier on. It appears NB did not want to cede an inch of the beer market for Guinness just like Guinness did not want to cede an inch of the stout market to NB.

Earlier on, Heineken BV,the parent company of NB had taken a stake at 33 before launching a full takeover of the brewery and expanded it. The former MD of Nigerian Breweries,Festus Odumegwu had brokered the deal and was soon manufacturing Turbo King, a hard ale with a tangy flavour in the brewery. Heineken also invested in Champion Breweries in Akwa Ibom State but later shelved a full takeover of the brewery when it felt it was overreaching its expansion strategy.
When Nigerian Breweries bought More Lager beer in Benue State,and Goldberg in the southwest,the beer market was effectively theirs. Harp was now destined for the morgue. Satzenbrau followed suit when Gulder was rebranded and reintroduced by NB. Without a beer brand, Guinness was forced to start tinkering with her almighty stout and stretched the brand into becoming several things. It was a very risky move which risked creating success or failure. They created Guinness Extra Smooth, Guinness Gold among others as a way to make the famous stout a one size fits all. It backfired. At the same time,NB had reinvented Legend,their stout brand.

Gradually, Legend was refined after consumer feedbacks showed that it was deemed too sweet and crude. Legend came back better and better,with massive sales promotion. I knew Guinness was in trouble. Diageo,her parent company,switched to spirits and brought in a slew of spirit brands into the market. But we all know that spirits are niche brands and not the main tipple on most tables. The only brand left for Guinness was Smirnoff and Snapp which had a fair share of the lady’s market but that market was not stable. Origin,their bitters was also struggling with Ghanaian imports and some local newcomers.
Nigerian Breweries finally sealed the beer market by introducing Tiger,a very popular (and potent) Asian beer with Singaporean origin. Tiger has so dominated that it almost sent her sister beer brands like Life and 33 out of the market. Meanwhile,NB also has Star Radler to help her compete in the lady’s game. Heineken is of course in a world of its own; untouched and unaffected.
Guinness was bleeding by the time she more or less languished in the malt market. Guinness Malt,which is by the way my best tasting malt,lost market to Amstel Malt and Maltina. But wait for it.

No one saw the arrival of SABMiller which is in joint venture with Peter Obi’s Intafact and International Breweries . With their arrival into the scene, Nigeria’s drinks’ market changed. The introduction of Hero created a cult beer brand in the South East with its logo reminiscent of Biafran coat of arms. It was almost a patriotic exercise to buy or drink Hero,as far as many in the region are concerned. Hero took over and gave NB a run for its money. As if that was not enough, they reintroduced Trophy into the South West and used it to cage Goldberg. Then they went ahead to introduce a slew of cheap beers and stouts under the Castle brand names. Meanwhile,they cut costs by using the same bottle to brew Hero and Trophy and other products. This strategy helped International Breweries become the new kids on the block and worsened Guinness’s woes by also venturing into the stout market through Trophy Stout and Castle Milk Stout which are all priced much lower than Guinness’s products.

The arrival of Budweiser introduced by International Breweries was the game changer. The beer is giving Heineken a run for its money and prestige. They are also stealing the lower end of the Malt market through Grand Malt and Beta Malt. Nigerian Breweries had to rescue HiMalt to compete at the lower priced Malt market. In all these, Guinness was slowly dying because she had lost touch with market trends. I used to see Guinness marketers in pubs looking exasperated by the way International Breweries sales representatives acted with gusto and Nigerian Breweries sales teams overwhelmed them. The once adorable Guinness became timid and shy in the market resorting to second place,and now third place. Their sales vans were getting older and older while NB and International Breweries bought some sleek new white Mitsubishi L200 trucks.

Your human resources are your greatest resources. I evaluate companies based on how their staff act. I could see NB and International Breweries marketing staff dress and walk with a confidence I stopped seeing in the gait of Guinness staff. Something was amiss; their products were losing market and they knew not what the hell was going on.
It’s so sad they gave up the fight though no one would blame them after a 61 billion Naira loss. You don’t throw in good money after bad. But in the revolving door hypothesis,their exit has given Singaporean conglomerate Tolaram Group a foothold into Nigeria’s beer market. There’s definitely much to expect from Asians who are known for their shrewd approach to the market. Who knows,they could introduce new products like Japanese Rice beer and the Chinese Baiju beer that have eclectic appeals. I only hope the employees of Guinness would find a role in the new entity.
In all, Guinness did not die a sudden death or had a brief illness. It was a slow,steady and protracted death caused by wrong bets, inability to reinvent, market forces,changes in consumer tastes, consumer resistance and of course economic tailwinds. Guinness could not read the maps well.



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