Diageo taps into Guinness boom with new London tourist hub

It’s the fourth tourist attraction for Guinness, following the Dublin Storehouse and microbreweries in Baltimore and Chicago

The Guinness Open Gate Brewery. Photographer: Betty Laura Zapata/Bloomberg

Diageo finally opened the doors to its new Guinness attraction in London on Thursday, two years later than planned, but just in time for incoming Chief Executive Officer Dave Lewis.

The £73m (€83.4m) Guinness-themed site in the city’s Covent Garden district features a microbrewery, restaurants, a gift shop, and, importantly, bars for people to sip a stout that’s become a star brand for Diageo.

It’s the fourth such tourist attraction for Guinness, following the Storehouse attached to its St James’s Gate site in Dublin and microbreweries in Baltimore and Chicago.

But like the US outposts, the central London hub won’t actually brew the stout. Instead, the new facility will produce roughly 750,000 pints a year of other beers, including a London porter and a lager, a fraction of Dublin’s capacity. Guinness will be imported.

Once considered a staid drink for old men, Guinness, whose distinctive taste comes from malted barley, has had a resurgence in recent years, particularly among Gen Z drinkers and women. Opening just weeks before Lewis starts, London’s new 54,000 sq ft venue is part of Diageo’s plan to extend Guinness’s winning streak, which is now at risk from the rising success of rivals’ stouts such as Heineken’s Murphy’s and weak consumer confidence.

Lewis, who previously ran Britain’s largest grocer Tesco, is faced with reviving a company whose stock is down roughly 60% since its covid peak in January 2022 and is beset with management change, lackluster sales and fickle consumers with stretched budgets.

More broadly, the sector is grappling with a decline in booze consumption among health-conscious consumers. It’s severe enough that the UK government is forecasting a substantial drop in government revenue from alcohol duties in the coming years.

Organic net sales of Guinness rose 13% globally in the year through June, but this was a slight slowdown from the 15% growth a year earlier. The beer was so popular that it ran out in pubs across the UK last December as Diageo struggled to meet high demand. The company says it will have enough this Christmas.

The Netflix drama House of Guinness, based on the founding family’s history, is expected to further boost its appeal among the masses.

Guinness 0.0, the non-alcoholic version, has also been a success. Last year, it became Britain’s best-selling non-alcoholic beer and is proving particularly popular with younger drinkers shunning the real thing.

Bloomberg.