GUINNESS COMPANY OVERVIEW

HISTORICAL BACKGROUND
The story of Guinness remarks an incredible sense of belief and adventure. It all started in 1759
when Arthur Guinness signed a staggering 9,000-year lease on the unused St. James Gate
Brewery in Dublin (Wikipedia, 2024). It is clear now that his belief stemmed from a vision that
transcended many decades to come. Today, Guinness is brewed in over 50 countries and sold in
about 150, making it one of the most successful alcohol brands globally (Diageo, n.d.). However,
to truly understand its success, we must examine its early days and the remarkable efforts of
Arthur Guinness.
In 1769, Arthur made his first export, sending six and a half barrels of his ale to Great Britain
(Wikipedia, 2024). His quest for innovation began with the West Indie Porter in 1801 (Guinness,
n.d.). After many years of selling ale to Great Britain, Guinness brewed the West Indie Porter to
serve countries in the West Indies region. To preserve the beer over long-distance travels to these
countries, Arthur developed a recipe with a high quantity of alcohol and hops (Guinness, n.d.).
This brew remarks his dedication to commitment, excellence, and dedication.
Even after Guinness became a public company in 1886, its excellence and innovation persisted
over time as a crucial component of its culture (Wikipedia, 2024). From introducing nitrogen to
beer in 1959 (Guinness, n.d.) to building the world's first liquid carrier (Diageo, n.d.), MV
Miranda Guinness, in 1977, Guinness is still pushing the limits in the brewing industry.
Guinness merged with the Grand Metropolitan to form Diageo in 1997 (Tenon Tours, n.d.),
making Guinness one of the brands under Diageo plc. Still, after this merger, Diageo continued
to maintain the existing culture of innovation in the Guinness brand. In 2020, it introduced the
Guinness 0.0 (Diageo, n.d.), an alcohol-free variant, which offers the same unique blend, flavor,
and taste of Guinness without the alcohol. Similarly, in 2021, it introduced Guinness
MicroDraught (Diageo, 2021), a cutting-edge dispensing technology that allows small-scale
restaurants to serve Guinness by solving storage and cooling system complexities.
Guinness Nigeria's story begins in the 1940s-50s with Guinness product imports. The first
Guinness brewery outside the British Isles opened in Ikeja, Lagos, in 1962, a partnership
between Arthur Guinness Son & Co. and UAC. Guinness Nigeria Plc was listed on the Nigerian
Stock Exchange in 1965. In 2024, a majority of its shares were sold to Tolaram, marking a shift
from Diageo's ownership.

In retrospect, Guinness's long history is an adventure characterized by bold vision, unwavering

dedication to quality, and setting the stage for its prestigious standing in the brewing industry.

PURPOSE AND CULTURE

Diageo's mission (or purpose as they call it) is "Celebrating life, every day, everywhere." This
purpose is about celebrating life in every aspect and providing their people with the means to
keep improving and becoming better at work, at home, and in their communities (Diageo, n.d.).

Vision Statement: "To be the best performing, most trusted and respected consumer products
company in Nigeria." Its culture is deeply ingrained in its sense of purpose, partnerships with its
brands, its ambition to succeed in the marketplace, and belief in its people.

CORE VALUES
The following are the four core values of Diageo. Note that the statements in brackets are the
core values as stated by Diageo on their website (at: https://www.diageo.com/en/careers/why-
diageo/purpose-culture-and-values).
Devotion to Customers (Passionate about consumers and customers): Diageo demonstrates a
strong commitment to consumers and customers. Prioritizing customers and consumers, driven
by curiosity and insights, allows them to utilize data on consumer insights to drive growth and
revenue.

Mutual Respect (Value each other): At Diageo, people establish genuine relationships and
respect one another. Additionally, they value and consider diverse viewpoints and perspectives,
creating an atmosphere where every voice is heard, and people are encouraged to succeed.
Personal Development (Be Better): Diageo values hard work and personal improvement.
Employees are encouraged to continuously improve and grow, be innovative, take chances, and
learn from mistakes and successes.
Professional Pride (Proud of what we do): At Diageo, people are proud of their work, the way
they do it, and their overall impact on their customers and the business. The workforce is
responsible and upholds the highest moral and ethical standards.

RELATIONSHIP BETWEEN DIAGEO AND GUINNESS

As stated in the historical background, Diageo came into existence through the merger of
Guinness and the Grand Metropolitan (Tenon Tours, n.d.). Grand Metropolitan plc was an
English leisure, manufacturing, and real estate company. Before its 1997 merger with Guinness
plc to become Diageo, the business was a part of the FTSE 100 Index and traded on the London
Stock Exchange (Wikipedia contributors, n.d.).
Currently, Guinness functions as a major brand within the Diageo portfolio, using its rich history
and name recognition in the worldwide alcoholic beverages industry, while Diageo acts as the
parent business supervising operations and strategy. As a brand under Diageo, Guinness gains
access to Diageo's resources, distribution channels, and marketing expertise. Diageo has multiple
production facilities and sells its products all over the world, which gives Guinness access to a
large market.
However, despite being under Diageo, Guinness maintains its distinct brand identity and legacy
even after joining Diageo. It continues to brew its well-known stouts and other beer styles,
preserving its unique flavor and appeal in the international market.

STRATEGIES ADOPTED BY DIAGEO

After a careful examination of Diageo and Guinness Nigeria’s strategic priorities, and business
activities, the following strategies were identified:
Historical Strategies: Guinness initially focused on large-scale production and international
exports, becoming one of the first global beer brands. In Nigeria, the strategy focused on brewing
and marketing Guinness Foreign Extra Stout, making Nigeria the world's second-largest
Guinness market.
Current Strategies: Today, Guinness focuses on innovation, such as developing new products
(e.g., Guinness Nitro IPA), expanding into new markets, and leveraging digital marketing. In
Nigeria, they've expanded their product portfolio beyond stouts and lagers, introducing drinks
like Malta Guinness and Smirnoff Ice. They also invest in local farming of brewing ingredients.
Sustainability Practices: The company emphasizes sustainable brewing practices, including water
conservation, renewable energy use, and reducing carbon emissions.
Responsible Drinking Policies: Guinness promotes responsible drinking through various
campaigns and supports initiatives to reduce alcohol misuse.

Growth Strategy: This strategy entails using product development, market penetration, market
development, and diversification to increase the company's profitability and market share. This
aligns with the business growth strategy of expanding market share and enhancing profitability,
as discussed by Ansoff (1957) in the product-market growth matrix. They do this by acquiring
both new and established beverage businesses. The following are examples of strategic
acquisitions that have been made as part of their growth strategy.
 Diageo acquired Seagram's wine and alcohol divisions in 2001.
 In 2003, Diageo paid Jose Cuervo $100 million for fifty percent of the Don Julio Tequila
brand.
 In February 2011, a US$2.1 billion deal was agreed for Diageo to purchase the Turkish
liquor business Mey Icki.
 In May 2012, Diageo paid £ 300 million to acquire Brazil's top-selling premium cachaça
brand, Ypióca.
 For £1.28 billion, Diageo purchased a 53.4% share in United Spirits, an Indian spirits
producer, in November 2012.
 In November 2014, José Cuervo paid Diageo $408 million to become the sole owner of
the Don Julio tequila brand and the Bushmills Irish whiskey.

Operational and Resource Efficiency: Fostering a mindset where staff consistently look for
ways to enhance operations and eliminate waste is at the heart of Diageo's everyday efficiency
culture. This is similar to the Lean Management concepts that Womack and Jones (1996), which
center on generating greater value with reduced labor. Diageo produces a "fuel" for reinvestment
through process and resource optimization, similar to Barney's (1991) Resource-Based View
(RBV) of the company, which emphasizes the significance of effectively utilizing a company's
resources and capabilities.
Corporate Social Responsibility Strategy: Diageo is dedicated to teaching people about the
negative effects of alcohol and encouraging moderation. This aligns with Carroll's (1991)
framework for CSR, which emphasizes a company's obligation to have a beneficial social
influence. Diageo's strategy, which aims to influence behaviors for social good, mirrors the
Social Marketing Theory (Kotler & Zaltman, 1971) through activities against underage drinking
and drunk driving.

Sustainability Strategy: Diageo promotes sustainable design, water conservation, and a

decrease in carbon footprint by the Sustainable Development Goals (SDGs) of the United
Nations, especially Goal 12 (Responsible Consumption and Production). The company's
endeavors to produce a greater number of drinks with fewer materials are in line with the
Circular Economy concepts (Ellen MacArthur Foundation, 2013), which promote resource
efficiency and waste reduction.

Sustainability Practices: The company emphasizes sustainable brewing practices, including water
conservation, renewable energy use, and reducing carbon emissions.
Responsible Drinking Policies: Guinness promotes responsible drinking through various
campaigns and supports initiatives to reduce alcohol misuse.

GUINNESS BRAND PRODUCT OFFERINGS

Guinness offers the following variety of beers to its customers. More details on this product can
be found on the Guinness website
Guinness Draught: This beer was brewed in 1959 to commemorate the 200th anniversary of
Arthur Guinness's 9,000-year lease signing on St. James's Gate Brewery. It has a 4.2% alcohol
content, with a perfect blend of ingredients like malted barley, barley, roasted barley, hops,
nitrogen, yeast and water.
Guinness Hop House 13: After a brewer famously said "Needs more hops," Hop House 13 was
born. In response to his request, his fellow brewers produced a crisp, full-flavored lager that was
bursting with distinct scents of fresh hops and subtle notes of apricot and peach. With a 4.1%
alcohol content and a bright golden appearance, this beer is a rich blend of malted Barley, hops
(obviously), yeast, and water.
Guinness Foreign Extra Stout: Once known as West India Porter, the Guinness Foreign Extra
Stout has changed over time, but its essence hasn't changed. A robust beverage with a bold
character was produced from the recipe, which was brewed with extra hops to preserve the beer
in the ship's holds during four- to five-week trips in tropical climes. It has the popular signature
black appearance with a frothy head. With a 7.5% alcohol content, this beer is a perfect blend of
malted barley, barley, roasted barley, hops, yeast and water.
Guinness Smooth: The Guinness Smooth has all the qualities of the Guinness stout with an
additional creamy and smooth taste. Guinness Smooth is not just about taste; it's also about
feeling. The perfect blend of malted barley, barley, roasted barley, sorghum, hops, yeast, and
water gives it a dark ruby-red appearance. With a 4.5% alcohol content, this beer is brewed to
deliver a smoother, more refreshing flavor with a precise blend of sweet and bitter undertones.
Guinness Clear: Well, the Guinness Clear is just water. According to brewmaster Joseph
Glendenning, Guinness Clear was produced to make people aware of the advantages of spacing
their drinks with water. It was introduced in 2019 as part of their responsible drinking campaign.

ORGANIZATIONAL STRUCTURE
Being a sizable multinational corporation, Diageo usually uses an organizational matrix. This
organizational structure combines product-based divisions (beer, spirits, wine) with functional
departments (marketing, finance, operations). Employees in a matrix organization report to both
a divisional manager and a functional manager, which increases flexibility and facilitates
collaboration between various products and areas while utilizing functional expertise (Galbraith,
1971). Diversified businesses, such as Diageo, which sells its products in several markets,
frequently use this configuration (e.g., Guinness, Johnnie Walker, Smirnoff). A detailed
organizational chart can be found here: https://theorg.com/org/diageo
REFERENCES
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https://en.wikipedia.org/wiki/Guinness
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Guinness. (n.d.). Our craft: The Guinness story.
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Tenon Tours. (n.d.). Dissecting Diageo: The parent company of Guinness & Irish beer.
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Guinness MicroDraught. Diageo.
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Diageo. (n.d.). Our leadership team. https://www.diageo.com/en/our-business/executive-
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Guinness. (n.d.). Our beers. https://www.guinness.com/en-us/beers
Guinness. (n.d.). Our history. https://en.wikipedia.org/wiki/Guinness
Guinness. (n.d.). Responsible drinking. https://www.guinness.com/en/sustainability/positive-
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The Drum. (2020, December 18). Guinness marketing
strategies. https://www.instagram.com/thedrummag/p/C4GT7wmq5pS/
The Guardian. (2020, October 26). Guinness 0.0
launch. https://www.theguardian.com/food/2020/oct/22/alcohol-free-guinness-set-to-hit-shelves-
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Yenne, B. (2007). Guinness: The 250 year quest for the perfect pint. John Wiley & Sons.