Diageo to Launch Zero Alcohol Guinness in UK, Test in US; Coffee Line Extension to Launch in Time for St. Patrick’s Day

An alcohol-free version of Guinness, called Guinness 0.0, will launch in Great Britain and Ireland on October 26 — and the product will come to four markets in the United States in 2021.

Diageo announced the roll out of the beer Thursday. In a conversation with Brewbound earlier this week, Diageo Beer Co. president Nuno Teles said the zero alcohol version of Guinness would test in four states, including Michigan, in 2021.

The non-alc nitrogenated stout contains zero alcohol and 70 calories.

“It’s the ideal drink when you are having lunch with a couple of friends,” Teles said.

Teles, who launched his first non-alc beer around 2005, said non-alcoholic beer portfolio equates to “steady growth” but “not a spike.” That said, he believes non-alc beer could become as much as 5% of Guinness’ business in the future. The opportunity could be big; year-to-date through October 4, off-premise dollar sales of non-alcoholic beer are up 38.9%, to nearly $144.9 million, according to market research firm IRI.

Fresh from Diageo’s national sales meeting with wholesalers last week, Teles shared some of the company’s plans for the future, including plans for three additional taproom locations in the U.S. and a continued push into hard seltzers and FMBs.

In the conversation, Teles laid out the “lighthouse” for Diageo Beer Co.’s direction: “We want to be the most progressive, consumer-inspired beer company in the U.S. in service of achieving twice our revenue and also twice our investment in the next three to five years.”

Portfolio-wide Diageo Beer Company sales are up 24.4%, to more than $572.9 million, in off-premise retailers tracked by IRI.

Dollar sales of Guinness Draught are up 19.3%, to $76.7 million, according to IRI. Guinness Extra Stout dollar sales are up 12.8%, to nearly $50.3 million, through the first nine months of the year. Sales of the Smirnoff brand family are up 25.7%, to $366.7 million, through early October, with Smirnoff Ice sales up 18.7%, to nearly $97.2 million.

Teles said Diageo is well-positioned to double its business over the next five years.

“We see an opportunity to continue to grow Guinness quite significantly,” he said. “We want to grow Smirnoff. It’s a brand that is outperforming the market for the last five years with some great momentum. And we want to see beyond those two brands.”

In an effort to push that growth further will be a slate of innovations that build upon core products, such as Guinness and Smirnoff.

In addition to Guinness 0.0, Guinness Nitro Cold Brew Coffee (4% ABV) will receive a national launch in January in time to build toward activations and sampling around the St. Patrick’s Day holiday. The brand, which he said “is on fire” in test markets, has been well-received by chain stores.

Teles said he views the coffee line extension — which launched in 4-packs of 14.9 oz. cans — as a recruitment vehicle for new consumers to bring them to Guinness and Guinness Extra Stout and open up new drinking occasions.

Beyond Guinness, Diageo will launch a Smirnoff-branded Pink Lemonade flavor across several alcohol styles, including an FMB, a hard seltzer and a vodka. Meanwhile, the Smirnoff-branded Red, White & Berry FMB and hard seltzer lines will extend to the company’s convenience store play, the 8% Smash. Although the pandemic stymied the plans for Smirnoff’s Red, White & Berry brand through the summer holidays, including July 4, the company pivoted the brand’s messaging with a physically distant campaign.

Teles said 2020 ended up being the company’s best year ever for not just Red, White & Berry hard seltzer, but also the FMB brand. The company will also test a zero sugar version of Smirnoff Ice in cans.

Teles believes that hard seltzer can be one of Diageo’s three big sources of future growth.

The success of the Guinness Open Gate Brewery in Relay, Maryland, which opened in 2018, has the company exploring sites for potential future taproom breweries in the U.S.

In the Maryland brewery’s first year, the location attracted more than 400,000 visitors, with as many as 4,000 people visiting each weekend.

During St. Patrick’s Day weekend, the brewery was anticipating 10,000 people. Of course, that didn’t happen. Teles praised the agility and the resilience of the Guinness team in the U.S. and its ability to pivot to the “We Will March Again” advertising campaign.

Even with the pandemic surging across the country, Teles said Diageo is confident in the future of own-premise locations. He explained that the taprooms are a way of connecting to consumers, even during tough times. For example, in Maryland, the Guinness brewery continued to brew beers, as well as bake bread, which was donated to the Maryland Food Bank.

“We need to be as close to the communities elsewhere as we are in Baltimore,” he said. “And the best way is to have a taproom. It’s to have that physical presence.”

Teles said the company is exploring multiple locations, with plans to announce the new locations in the next calendar year. He added that several factors will determine where Guinness goes, including real estate availability and consumers’ adoption of the Guinness brand.

“Our intention is to open a sequence of taprooms to help the communities by brewing beers that others can sell,” he said. “So it’s not like us just opening a retail experience and doing nothing for the other retailers around. So we want to brew beers that we can make available in the area of those breweries.”

In the meantime, the Guinness brand will focus on at-home occasions this fall, including watching college football from their couches. The company has partnered with former San Francisco 49ers and University of Notre Dame legend Joe Montana and Guinness Draught is the official beer of the Fighting Irish. Teles said the results for Guinness Draught in a can have been positive, with the package “growing strong double-digits ahead of the beer market.”