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11.2011

Massachusetts Beverage Business

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Article By: Andy Crouch

These are tough times for big brewers.  The craft beer industry continue to nip at the heels of long established beers from international companies.  Consumers are also demanding new products and are causing some of the world’s best known breweries to rethink their own portfolios.  Despite possessing one of the world’s most recognized brands in Guinness, Diageo is not resting on its past performance when handling even its most ubiquitous ale. 
After 25O years of celebrating dark ales, the company is now launching a new Guinness branded lager for the public.  In an attempt to combine and capture the markets of dark beer drinkers and lager lovers, Guinness has produced a straight-forward and uncomplicated dark lager that is strongly carbonated and with only a mild bite or roasted malt profile.  Meant to be consumed straight from the bottle, Guinness does not have plans to release a draft version of the new brand.  After test marketing the beer in Chicago and San Diego, Guinness brewmaster Fergal Murray traveled to Boston recently to celebrate the nationwide American launch of Guinness Black Lager.  I recently sat down with Murray to discuss the beer, the American beer scene and the future of Guinness. 

ANDY CROUCH To start, how has the introduction of the Foreign Extra Stout into the United States gone? 
FERGAL MURRAY There are two communities that really recognize it: the African-American community and beer aficionados.  And then there are now consumers who are learning about this unique beer.  It’s done very well.  We heard for a number of years from consumers, “Why isn’t this beer available in America?”  And so it has been very well received. 

AC This beer is made in an assembly line sort of way, with different parts being made in different breweries.  Can you talk a little about that process. 
FM The roasting plant and facilities are in Dublin at St. Jame’s’ Gate, where we have the unique process of taking roasted barley and turning it into Guinness essence.  Our process involves about two and a half hours in an oven and it is only in the last fifteen minutes that the grain turns in color.  And it is at that moment that the barley has the intensity and roasted character that we want.  It’s quite a complex art as you can imagine.  And then we use the lagering facility at Dundalk. 

AC And that is for the base beer? 
FM Yes. 

AC So that is wholly separate from any other recipes that Guinness produces?
FM That process was started at our pilot brewery, which is our innovation center at St. Jame’s’ Gate.  And so we refined the lager process there.  That is where we worked out all the protocols and mash times and fermentation.  Then you bring that to the brewery and everything gets adjusted again.  We then go through lager process A, B then C, and test which one gives us the best.  The number of brewing trials is phenomenal, it just doesn’t happen overnight.  We may have done two hundred different brews to get the right result. 

AC Larger breweries in America, such as Coors and Miller, do a lot of small test batch brewing at their facilities and they produce a range of unusual styles, including barleywines.  And sometimes products have come to market from these smaller batch brews, such as with Blue Moon by Coors.  Does Guinness do much in the way of test batches along these lines? 
FM Oh yes.  We are constantly looking at new trends and ideas and refining our processes and optimizing our efficiencies.  We test different yeast improvements and hop level adjustments.  Rarely do we dream up new styles of beer or things like that.  We would need pull from the markets for us to go down that road.  We’re mainly focused on improving our brewing capabilities. 

AC My understanding is that there has been a general downward sales trend for beer in Ireland.  How important are the export markets for Guinness? 
FM Volume for beer in Europe in general has been flat and the volume of beer in Ireland has also been decreasing as Ireland changes.  Our market share has actually increased.  In our global markets, such as in Africa, their whole economy is changing and they want premium beer.  Guinness is pretty much a household name in Nigeria for example. 

AC What are your thoughts on the American craft beer scene? 
FM It has always been very strong and the consumers want to have the flavor experience.  So we are delighted with it.  I think it is going to continue and pubs are going to continue getting these products to people – it’s good for the beer business in general and helps us get to where the wine industry has been.  Wine has long been offering more choice and now beer is as well.  For the microbrewers, it’s exciting.  They’re beginning to figure out whether it is about having multiple different products or about consistency with their brands.  I think you need to gain your credibility as a brewer.  It’s a good journey to be on. 

AC What have you thought about the products themselves? 
FM I’ve had a number.  There is a lot of hops going in and some of it works and some of it doesn’t.  Some aren’t balancing it out consistently and they could be doing a better job as brewers.  But there is a demand for that.  I think they are learning a lot and that is the critical thing.  Some have been around for eighteen, twenty or thirty years and have been through all of the ups and downs.  And these micros, well they’re not really micros, some of them do more volume here that we do.  Sam Adams does more volume in North America than we do but they are still seen as a micro and they love being viewed that way and being part of it.  I think it’s great though and I love meeting the brewers.  I do wish sometimes that I was one of them and I’d love to dabble and create in my own head.  But I’ve also learned that it is great to be able to consistently do your job and I loved on brew day getting out on spec and hitting our numbers.  Because you knew people would have a great experience with your beer. 

AC If we lived in a world where you could brew whatever you wanted for the market, what would you want to brew? 
FM I think the Guinness Black Lager is a product that on occasions I’ll be dying to have.  At barbecues and watching the game, I don’t want a pint of Guinness if I’m on my own.  I think a proper Black Lager will be perfect for that.  Other than that, I’d love to see a couple of more draft offerings and with the nitrogenation process, maybe a nitrogenated lager or ale.  I’d like to give people a better understanding of what the nitrogen process adds to the beer, such as with the smoothness and textures.  I am interested to see how pubs would look to that. 

AC One of the questions that I get from people who are familiar with Guinness relates to the Guinness essence.  What exactly is that? 
FM We can’t really talk about it because it’s secret and isn’t allowed.  The essence gives you the fundamental elements.  It gives the beer its flavor, its color, and it is the DNA of the brand.  You can purchase the raw materials of the brand and make a great beer and then you can turn it into Guinness.  And that is consistently the same Guinness across the globe.  So even if you have twenty-nine or forty-nine breweries around the world, you can have them brew and add this in and you’re fundamentally always going to have the same Guinness.  It’s a great business model for us because we can get into local markets that otherwise might be difficult to ship beer to.  You don’t want beer sitting in kegs near the Equator.  You don’t want bottles out there in eighty or ninety degree temperature.

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