Guinness Confidential, 1977: Economic Crisis, Quality Problems, Image Issues

In 1977 Guinness commissioned consultant Alan Hedges to look into why sales of the bottled version of the stout were dropping off. His research revealed changes in the beer, and changes in society.

Hedges is, it turns out, some­thing of a leg­end in the world of mar­ket research hav­ing writ­ten an impor­tant book called Test­ed to Destruc­tion, pub­lished in 1974.

We guess from the odd con­tex­tu­al clue that he got the Guin­ness gig because he had worked for S.H. Ben­son, an adver­tis­ing firm that held the Guin­ness account in the 1960s.

He may well still be around – he was active in the indus­try in the past decade or two – so maybe he’ll pop up to tell us more if he ever stum­bles across this post. (That’s one rea­son we like to put things like this out into the world.)

This par­tic­u­lar item is yet anoth­er doc­u­ment from the col­lec­tion of Guin­ness paper­work we’re cur­rent­ly sort­ing through on behalf of its own­er. We’re not going to share the whole thing, just high­light some of the most inter­est­ing parts.

Sales collapse

Hav­ing reached some­thing of a post-war peak in 1963/64, from 1964 sales of bot­tled Guin­ness began to decrease. After a plateau in the ear­ly 1970s, in 1973/74 it then dropped away “in a jagged but con­tin­u­ous plunge”:

By the begin­ning of of 77/8 the lev­el is about 63% of the 12-year aver­age, and the rate of loss is about 4 or 5 index points in the pre­vi­ous year…

Hedges chose to focus on the mid-1970s drop in par­tic­u­lar.

Before we go any fur­ther… What’s your guess for the pos­si­ble cause?

Those dates imme­di­ate­ly made us sus­pect that the resur­gence of inter­est in real ale around the rise of CAMRA might have been the key fac­tor, giv­en Guinness’s pre­vi­ous sta­tus as the Chief Drink of Very Dis­cern­ing Men.

Hedges first thought, though, was some­thing clos­er to home.

The emergence of Draught Guinness

Could the new kegged stout be can­ni­bal­is­ing sales from the bot­tled ver­sion? This cer­tain­ly seems like a sen­si­ble sup­po­si­tion, and from the point of view of those inter­est­ed in beer his­to­ry it has the added ben­e­fit of prompt­ing Mr Hedges to include a graph show­ing sales of Draught Guin­ness, or DG, from 1963 to 1977:

Graph: draught guinness sales, 1970s.

Frus­trat­ing­ly, it doesn’t have actu­al num­bers but, still, inter­est­ing.

His con­clu­sions are cau­tious:

It is pos­si­ble to argue that DG stole sales from BG [bot­tled Guin­ness] dur­ing the lat­ter six­ties, and that it was this trans­fer­ence of loy­al­ty that first set BG on the down­ward path. How­ev­er, there is no par­tic­u­lar con­fir­ma­tion of this view from the tim­ing of the respec­tive slides and spurts… From [1971/2] until the end of 74/5 the two lines move in par­al­lel – sug­gest­ing a glob­al Guin­ness prob­lem… On the oth­er hand it may also be argued that the dynamism cre­at­ed by DG in the first eight years of my charts gen­er­at­ed enough excite­ment to help keep BG alive…

In short, maybe BG lost out to DG, but prob­a­bly not.

The beer market overall

There are some love­ly num­bers in this sec­tion, pre­sent­ed in a very func­tion­al table, repro­duced below with slight amend­ments to labels for clar­i­ty:

Table showing Guinness sales declining at a higher rate than the bottled beer market between 1963 and 1977.

Now, tables are bor­ing, but you know what’s even more bor­ing? Graphs! We took those num­bers and turned them into a cou­ple of charts.

Graph showing Guinness sales declining faster than general packaged beer market.

Guinness percentage of packaged beer market plummets.

It’s obvi­ous from all this that Guin­ness was in trou­ble, per­form­ing rel­a­tive­ly worse than pack­aged beer more gen­er­al­ly. After a lot of pon­der­ing and reflec­tion on detail, Hedges zeroed in on a key devel­op­ment in the pack­aged beer mar­ket, name­ly the increas­ing pop­u­lar­i­ty of non-return­able pack­ag­ing (espe­cial­ly cans):

Guin­ness has been heav­i­ly depen­dent on return­able bot­tles… [And] that the return­able bot­tle mar­ket is declin­ing faster and more con­sis­tent­ly than the total pack­aged mar­ket… shows in some sens­es why BG sales have fall­en so rapid­ly.

He goes on to argue that if it’s just a mar­ket­ing prob­lem – bung Guin­ness in cans, or more inter­est­ing­ly brand­ed dis­pos­able bot­tles – then it’s a quick fix, but…

There is a good deal of cir­cum­stan­tial evi­dence to sug­gest that Guin­ness in some sense belongs cul­tur­al­ly to the return­able bot­tle and not to the can.

This sounds like quite a 2018 con­ver­sa­tion, and an issue that the UK’s old fam­i­ly brew­ers are grap­pling with today.

"Ideal Suit in Lager" -- a hand with playing cards depicting lager brands.
Detail from the cov­er of Whit­bread Way No. 13.
Lager, and ‘anti-dark movements’

Next, Mr Hedges looked at lager, and pon­dered whether Guin­ness was a vic­tim of “the band­wag­on growth of lagers”. After much reflec­tion on lager sales, both draught and pack­aged, com­pared to those of Guin­ness, his con­clu­sion was that, yes, lager was doing remark­ably well, but even with lager tak­en out of the equa­tion, Guin­ness was still in steep­er decline than oth­er beers on the mar­ket. But…

This dis­cus­sion of lager brings out a fur­ther point. In recent years dark beers have tend­ed to lose ground to light beers. Although there have been dark beers that have suc­ceed­ed at least tem­porar­i­ly against the tide (like New­cas­tle Brown) [which] shows that this is not an immutable law. The una­nim­i­ty of the move­ment, how­ev­er, sug­gests that it is more than coin­ci­dence that the beers gain­ing ground are almost all light, while those that are los­ing are main­ly dark.

At this, he gath­ered some num­bers from the Brew­ers’ Soci­ety: what share of the mar­ket did dark beers have?

1972 | 29.9%
1973 | 27.3%
1974 | 26.1%
1975 | 23.8%
1976 | 21.7%

Hedges:

This is very close indeed to a straight-line share decline. There is no sign that gen­er­al anti-dark move­ments might help to account for the sud­den down­turn in Guin­ness in 1974.

Easygoin' -- Guinness advertising beer mat from the 1970s.

Too expensive for old working class men

A cou­ple of sec­tions here run togeth­er. To sum­marise (because it’s a bit dry, and we want to get to the next bit, which isn’t) mar­ket research car­ried out through­out the 1970s showed that a lot of old­er work­ing class men quite sud­den­ly stopped drink­ing bot­tled Guin­ness in 1973/74: “Although the changes are small the bases are large, and move­ments of this mag­ni­tude would be quite suf­fi­cient to bring about the sort of changes we are con­sid­er­ing.”

Hedges won­dered if they were put off by a change of label (more on that short­ly), or per­haps by a series of eco­nom­i­cal­ly dri­ven price ris­es that occurred at around this time. Guin­ness didn’t rise in price much more than any oth­er type of beer on the mar­ket, but…

[The] sec­tors of the pop­u­la­tion in which Extra Stout holds its fran­chise – old­er peo­ple with a high pro­por­tion of DEs, typ­i­cal­ly pen­sion­ers – are more sen­si­tive to price changes than oth­ers.

That, he sug­gest­ed, cou­pled with a gen­er­al sense of cri­sis and aus­ter­i­ty prompt­ed by the three-day week, might be the most impor­tant fac­tor.

How Guinness is made.
1970s leaflet: ‘How Guin­ness is Made’.
The beer changed (got worse)

This is far and away the most inter­est­ing bit of the report, if we’re hon­est, not least because Guin­ness itself is so cau­tious about dis­cussing changes, or acknowl­edg­ing any drop in qual­i­ty over the decades.

Alan Hedges seems to have had access to lots of con­crete data on how the beer had changed, even if he grum­bled that there was no record of ABV, or brew­ery-lev­el qual­i­ty con­trol reports on file.

What he did have was notes on the orig­i­nal grav­i­ty (OG) of Guin­ness ES at var­i­ous points in the process which led him to con­clude there had been a sub­stan­tial drop in strength between 1960 and 1976:

I have no way of know­ing what sort of dif­fer­ence in strength is per­cep­ti­ble… [but] I would guess that the full 10% drop over the peri­od could be impor­tant. Old­er BG drinkers (whose loy­al­ty to BG has been under obvi­ous pres­sure) could well feel that the drink was less strong than they remem­ber it.

So there’s Item 1 in the evi­dence for Guin­ness not being the Beer It Used to Be.

Item 2 is that, from 1971 onward, the beer was brewed weak­er in the sum­mer, so that a drinker in August in the mid-1970s could end up with a pint that was 14% weak­er than those they’d been drink­ing in 1960. You’d notice that, sure­ly?

He also man­aged to dig up sta­tis­tics on the Iso­hu­mu­lone lev­els of Guin­ness ES – that is, the hop bit­ter­ness. Though he con­clud­ed that there was no cor­re­la­tion with sales, the num­bers are inter­est­ing: there were around 58 parts-per-mil­lion in 1960, com­pared to 47 ppm in 1976. Guin­ness ES also got roasti­er. Or at least the amount of “roast mate­r­i­al” went up, from about 7.7% of the total grist in 1960 to around 8.8% in 1976.

On the tech­ni­cal front, there were prob­lems, too, accord­ing to Hedges’ analy­sis of qual­i­ty sur­veys car­ried out in the retail and whole­sale arms of the busi­ness:

There are in all four occa­sions when the whole­sale sur­vey per­cent­age with [unac­cept­able] taste-marks greater than 1 falls with­in a point either side of 10%. Each of these coin­cides with a local high point on the smoothed sales curve fol­lowed imme­di­ate­ly by a sharp fall.

In oth­er words, when qual­i­ty testers noticed off flavours in the bot­tles, cus­tomers would too, and they’d stop buy­ing the beer.

As well as off-flavours there were also car­bon­a­tion issues at var­i­ous points and (per­haps a vicious cir­cle) bot­tles start­ed stick­ing around on pub shelves for longer: “If stocks build up age increas­es. Then qual­i­ty falls off again, and demand slack­ens fur­ther. And so on.” Guin­ness: drink fresh!

Now, here’s a great bit sure to wind a few peo­ple up:

The above com­ments are based on whole­sale sur­vey fig­ures for [Lon­don] pro­duc­tion. If Dublin pro­duc­tion is brought into the pic­ture the dis­crep­an­cy between the sur­veys wors­ens, since the per­cent­age of Dublin pro­duc­tion over the accept­able taste mark on two occa­sions approach­es 15%.

Yes, that’s right – Dublin-brewed Guin­ness dragged the over­all qual­i­ty down. Oof!

Advertising

Was there, Hedges won­dered, a cor­re­la­tion between adver­tis­ing spend­ing and sales? By now, his con­clu­sions are begin­ning to sound a bit repet­i­tive: maybe a bit, but not con­clu­sive­ly so. Guinness’s share of over­all beer adver­tis­ing did dip in the 1970s but sat at a remark­able 20% in 1965/6, and was still at around 16% in 1976.

What is inter­est­ing here apart from the num­bers are some of the obser­va­tions about Guinness’s place in the mar­ket…

[One] has to bear in mind the unusu­al load that Guin­ness adver­tis­ing has to bear in main­tain­ing demand pres­sure since Guin­ness is sell­ing large­ly through out­lets owned by its com­peti­tors. For this rea­son adver­tis­ing may be unusu­al­ly crit­i­cal to Guinness’s per­for­mance.

Anoth­er obser­va­tion he makes is that Draught Guin­ness and bot­tled Guin­ness, though they shared a trade­mark, were quite dif­fer­ent beers tar­get­ing quite dif­fer­ent mar­kets, and adver­tis­ing con­tent reflect­ed that:

In peri­od 1967/8 the repar­a­tive cam­paign was aban­doned in an attempt to broad­en appeal, and Benson’s intro­duced the rather Coca-Colaish ‘World of Guin­ness’ cam­paign. This ran for about 18 months.… For the first six months of ‘World of Guin­ness’ noth­ing much hap­pened to sales. Then they began to dive, and the plunge last­ed until the end of the cam­paign, after which it tapered off.

(Repar­a­tive? See here.)

It seems this cam­paign worked for Draught, which was “young and out­go­ing”, but might (Hedges spec­u­lat­ed) have turned off “the more tra­di­tion­al­ist Extra Stout loy­al­ist”.

A full list of Guinness’s var­i­ous adver­tis­ing strate­gies from 1970–76 is also sup­plied. For exam­ple, in 1969/70, the mes­sage was that Guin­ness tastes “pleas­ant, not bit­ter and med­i­c­i­nal”, put across on TV in an ads called ‘Irish Cof­fee’ and ‘Cham­pagne’, and on a poster with the slo­gan ‘Give him a Guin­ness’. By 1972/3 the empha­sis was on the “nat­u­ral­ness and char­ac­ter of drink”, tar­get­ing pri­mar­i­ly younger drinkers. Which nat­u­ral­ly leads us to…

Close-up of the CAMRA logo from the 1984 Good Beer Guide.

CAMRA?

No sur­vey of beer in the sev­en­ties would be com­plete with­out men­tion of CAMRA.… CAMRA has undoubt­ed­ly been suc­cess­ful as a move­ment, in that it has become more than a nation­al beer-drinker’s talk­ing point. CAMRA claims cred­it for the intro­duc­tion of 18 cask con­di­tioned beers, and the with­draw­al of adver­tis­ing sup­port from kegs tells its own sto­ry…

One of the dif­fi­cul­ties we had in research­ing Brew Bri­tan­nia was find­ing out what the big brew­ers made of CAMRA because the pol­i­cy seemed to be, as far as pos­si­ble, to ignore men­tion­ing it. But we’re cer­tain there was lots of chat going on behind the scenes, and this doc­u­ment strength­ens that feel­ing.

Hedges sum­maris­es all the rea­sons peo­ple were drawn to the real ale move­ment: ‘small is beau­ti­ful’ hip­py ten­den­cies; nos­tal­gia for the good old days; the anti-addi­tive, anti-pro­cess­ing, health food dri­ve; but most of all, their guts:

Although it became linked by CAMRA main­ly with flavour and body, the main orig­i­nal source of dis­plea­sure was prob­a­bly in the lev­el of car­bon­a­tion. Bit­ter has tra­di­tion­al­ly been flat­tish, thin­nish liq­uid which can be drunk in prodi­gious quan­ti­ty. Peo­ple sim­ply found that drink­ing a lot of keg beer blew them out and gave them stom­ach ache.

Hedges not­ed that CAMRA’s growth mapped well against declin­ing sales of Guin­ness Extra Stout, includ­ing a sharp bump up/down in 1973/74, but couldn’t think of any par­tic­u­lar rea­son why that should be. In fact, he thought, Guin­ness ought to have done quite well out of the gen­er­al attack against “the com­pe­ti­tion” (Watney’s et al) but “Guin­ness failed to speak to the dis­en­chant­ed bit­ter-men in the right terms”. In oth­er words, Guinness’s adver­tis­ing at the cru­cial moment was pur­su­ing lager lads, not ale drinkers.

Weatherman

Final­ly, Hedges con­sid­ered the weath­er, a fac­tor often cit­ed as cru­cial in the rise of lager in the UK. Guin­ness, he con­clud­ed, was with­out doubt a sea­son­al beer which was less pop­u­lar in sum­mer, but there was no par­tic­u­lar cor­re­la­tion between hot sum­mers and the sud­den drops on the sales graph.

No firm conclusion

In the end, Hedges is unable to pin­point a sin­gle fac­tor respon­si­ble for the drop in sales of Guin­ness, but in try­ing he leaves us with a fas­ci­nat­ing pic­ture of the ups and downs of an impor­tant brand, and the many com­pet­ing fac­tors that can nudge a prod­uct in or out of the public’s affec­tions.

* * *

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4 thoughts on “Guinness Confidential, 1977: Economic Crisis, Quality Problems, Image Issues”

  1. CAMRA ought to have giv­en a slight boost to bot­tled Guin­ness sales since it was con­sid­ered bot­tle-con­di­tioned and there­fore ‘accept­able’ to drink in a pub with no draught real ales. I can’t remem­ber when the pro­duc­tion process changed – pos­si­bly in the 80s? When I start­ed drink­ing in about 1972 the draught ver­sion was nick­named ‘road tar’ and it was a bit of a dare amongst my school friends to try one. I did and actu­al­ly found it quite palat­able, but the stum­bling block was the pre­mi­um price. At uni­ver­si­ty around 1975, I think Adnams was 16p and Guin­ness maybe 19p so we went for the for­mer. Hence atti­tudes and pric­ing must have been fac­tors in putting off at least my gen­er­a­tion when we were what you might call ‘for­ma­tive drinkers’.

    At school in the ear­ly 70s we had a geog­ra­phy teacher who said that his father was pre­scribed BG for some ail­ment or oth­er (iron defi­cien­cy?) and a crate was deliv­ered each week from the NHS. I’m not 100% sure that he wasn’t hav­ing us on but, if not, I won­der when (or even if) the prac­tise ceased.

    A fur­ther rec­ol­lec­tion (prob­a­bly 80s after my first vis­it to Ire­land) is that if you put a fin­ger over the top of an open bot­tle of Guin­ness, then shook it up and very care­ful­ly released the gas, you got some­thing that tast­ed much more like Dublin draught than what you got here.

  2. a friend of mine worked at Park Roy­al Brew­ery for a long time dur­ing this peri­od. He resent­ed the fact that brew­house oper­a­tions were employ­ing state of the art hygiene and pro­duc­tion facil­i­ties only to turn good beer over for bot­tling to an old fash­ioned and filthy bot­tling plant. Imme­di­ate­ly after the war a dif­fer­ent mate worked as a Guin­ness rep. He would vis­it pubs, buy a bot­tle for him­self and the land­lord, the land­lord would equal the round. And then he would vis­it anoth­er half dozen pubs – 14 bot­tles of Guin­ness while dri­ving. He wouldn’t have done that if the qual­i­ty was poor (or if the breathal­yser had been invent­ed). You may find that the deci­sion to pas­teurise for cans and bot­tles reversed the decline in sales

  3. I’ve seen stout pre­scribed for med­i­c­i­nal pur­pos­es, to one old lady in a geri­atric ward. I think it wasn’t so much that the hos­pi­tal doc­tor believed it was a good vehi­cle for an iron sup­ple­ment, more that her doc­tor back at home had pre­scribed it and he didn’t see any harm in car­ry­ing it on – nev­er­the­less, pre­scribe it he did. (I think it was Mack­ie rather than Guin­ness, fwtw.) 1979 this would have been. Going back a bit fur­ther, my wife recalls her moth­er say­ing she was on pre­scrip­tion Mackeson’s dur­ing her preg­nan­cies(!!!). O tem­pu­ra, o morays!

  4. I have a the­o­ry about Guin­ness, entire­ly due to the won­der­ful work of Ron Pat­tin­son
    It seems that, up to the ear­ly 50’s, Guin­ness grists were pret­ty much like most stouts, with atten­u­a­tion to match. Sud­den­ly flaked bar­ley appears in the make­up, and the atten­u­a­tion shoots up. So the sto­ries about the ori­gin of “Dry Irish Stout” are about 100 years out. Did drinkers not notice?

    They did in the 70s – 90s, because I was one of them! Some­one who worked for Guin­ness told me that flaked bar­ley con­tent went from20% to 30%.“the Saun­ders grist?” A lot of the prob­lems may be due to adding cat­tle food to the grist.

    Thanks to Ron – the man’s a genius!

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