How Guinness became No.1, the power of sporting partnerships & the “Diageo way” to build brands - Grainne Wafer

0:07Ladies and gentlemen, welcome to the Uncensored CMO. Now, in this special series, we are partnering with our very good friends at NBCUniversal to do a special series focusing on CMOs that have used the game-changing power of sport to transform their brand. Now, hopefully you caught our episode last week with Corey Marchessoto from Elf. And this week, we have Gronja Wafer, who's the Global Category Director at Diageo for Beer, Vodka and Spirits. Now, she's here to talk about, in particular, how Guinness have used the power of sport to transform their brand over the last few years. Lots of really exciting things they've done on the brand.

0:41And I know you're going to love hearing all about it. Here it is. Gronja, welcome to the show. Thank you so much, John. Pleasure to be here. It's fabulous to be here. It's a great place, isn't it, to hang out and talk about what we're up to? It is. It is. And I was just saying earlier, it's such a place for, you know, serendipitous connections as well. So I'm looking forward to meeting new people over the course of the week. It's great. I often describe it to people who haven't been here. It's a bit like LinkedIn in real life. 100%. 100%. You spot someone walking down the Quasette and go, I know you, don't you?

1:08I know you. I've seen that. Oh, yeah, I know exactly who you are. And then, obviously, you know, we do a lot of panels and discussions to meet people through that and think about how you can collaborate. So, yeah, it's a great week. You've got a pretty exciting role heading up a large portfolio of alcohol brands for Diageo. Fascinating to know kind of what the trends are out there in the kind of world of alcohol and what you're seeing around the world and what should we be paying attention to? Yeah. Well, I think, first of all, there's a big trend towards sort of socialising in a very different way.

1:38And obviously that impacts our industry. So you're seeing, obviously, rise of moderation. So people choosing non-alc options, people choosing to do what we call zebra striping, which is, you know, basically might have an alcoholic drink, they might, you know, mix it up with a non-alc, they might have an alcoholic drink, et cetera. So that's zebra striping behavior. Experience is really coming to the fore. Like people are looking for sort of, you know, much more mixed up, freer, less fixed experiences. So they expect to find, you know, sports and music and entertainment and food and everything all in the one sort of evening.

2:12And, you know, venues that are increasingly are sort of, you know, tilting to that are actually doing really, really well. Obviously, we still see the growth of premiumization, even in, you know, cash conscious times. People are still choosing to, you know, trade up and make those choices where actually there's no sort of buyer's regret in it, right? So you're actually spending your money wisely. And obviously, with a premium portfolio like Diageo's, that favours us as well. So, yeah. And then obviously, the media landscape is fragmenting and the rise of digital and social is not going away. So we really see that as a kind of key lever and it's been a big part of the success story on Guinness, actually, tilting into that.

2:50As you remind me, I've worked in soft drinks most of my career, so the non-alcoholic side. But you're right about premiumisation. I mean, having been through two global recessions in soft drinks, the market kind of polarizes that people actually, when they're tight in their belts, do want to spend money at home typically, but on more premium. And also, if you're going out, you want to have a really great experience and you have a higher expectation for the standard of service, the standard of cocktail. If you're going to spend that money, you want it to be something memorable. And, you know, again, that's something that favors a lot of our portfolio.

3:23So it's good news for us. Now, talking about your portfolio, you have a very enviable portfolio of kind of brand leaders, but you also have challenger brands, don't you, and sort of up and coming brands. Which are the brands up and coming within the portfolio that are doing particularly well? Yeah, so across the portfolio, so I look after beer, vodka, liqueurs and ready to drink. So there's plenty of big brands within that, like Guinness and Smartoff and Baileys, but also small brands like obviously Kettle One in vodka. Obviously, also brands like a new brand called Ventura, which we launched in liqueurs.

3:54It's an aperitivo brand. It's launched in Italy. It's doing very well. And so, yeah, there's quite a mix of, you know, different brands across that and different types of sort of business models and marketing models that goes alongside that as well. So, you know, obviously, when you're building those sort of challenger brands, you're thinking probably bar and store back. And you're really thinking particularly with a brand like, for example, Kettle One, the bartender's favorite vodka. so you're really thinking about how you build those relationships with bartenders how you really you know make sure the kettle one is on the cocktail menus on cocktail lists and we have a platform called made to cocktail which is really plays into kettle's strength and you know really thinking about that sort of ambassadorial role and the word of mouth that comes from that very influential community so it's quite a different model as you can imagine than building a brand like Smirnoff even though it's the same category where actually you're thinking of you know a global giant of a brand in Smirnoff, you know, like Smirnoff alone, nevermind Smirnoff Ice, you put those two together and you've like a behemoth.

4:54And so they're very different. You're thinking about scale reach and all of that with Smirnoff and obviously much broader audiences as well. How do you make the decision like between those? Because I remember years ago when I was at Britvik, I worked on, I created a new team called Seed Brands, which is basically managing the innovation. It's about 3 % of company turnover, but I was competing internally for resource and time and attention. So given your role is very broad, how do you make those kind of portfolio decisions? We have an amazing data-led tool called Catalyst, which basically allows us to use data to map portfolio and optimize our choices within that based on profit pool, scale of growth opportunity, return investment.

5:34And we can basically look at any category in any market and sort of say, okay, actually the best mix of portfolio to invest behind would be here. Now, obviously, we also then apply a sort of a judgment call on it as well because you might have things where you say actually that's still not being captured as a big profit pool for the future but we can see the trends going that way and that's when we're using things like future insight etc and to really drive you know those choices but that tool actually also works right down to growth driver levels so we can actually be saying you know what if you moved let's say a thousand pounds from tv to social on that brand in that market, you could drive your ROI by that.

6:12That then turns off money that you can then make some of those investments in the brands that are at an earlier stage in their life cycle. So you can sort of play around like that as well. So it's a fascinating, great tool on everybody's desktop. We've recently just refreshed it. So, yeah, that's one of the main ways we'd make those choices. Oh, that is very fascinating. And one of the challenges as well you've got is that you've got beer and you've got kind of premium spirits as well. and they're very different sort of P &Ls, I would assume. But am I right in saying that all the rumours of Guinness being disposed of are all kind of put to bed now?

6:44I think our CFO came out and categorically said that was the case. So put to bed. Very relieved to hear. And it's interesting, right? So like Guinness, although it's a beer brand in a sort of spirits company, it's actually a very distinctive brand. And it behaves in a way that's much closer to sort of the rules of spirits marketing than other beer brands, for example. So it's highly distinctive. It has really strong meaning. Obviously, you know, Guinness is highly salient. In fact, it's the most talked about brand in its category. Sometimes the scores are so high, I'm wondering, is there space for any other brand to be talked about at all?

7:19Like I think it's something like 60 % share of talkability in GB, right? Which is phenomenal. So it sort of behaves like a spirit brand in many ways. And we sort of think about how we're building, you know, according to those sort of meaning, distinctiveness and salience on the brand throughout. Right, yeah. That's very, I'd never actually clocked that idea that if you take a spirit brand, because obviously on spirit brands, because it's high margin and it's sort of premium, you do focus on building brand, don't you? Whereas in, I guess in lager, it's very commoditized. You can switch between lots of different brands.

7:50You can't really tell the difference between products. But maybe there's a benefit, actually, to the fact that it's not being subsumed into a big. Absolutely. And the other thing I'd say is that actually, I mean, Guinness in terms of, you know, obviously it's mix. It also is an entree primarily focused brand. although obviously we're growing in the off trade but still it's heartland in the on trade which is a higher margin channel as well right so you know it's it's a premium brand it's got high pricing power from its distinctivity um and you know it does as i say sort of behave more like a spirits brand which is interesting because then we can also take the learnings from some of the success stories on guinness and apply that back into our spirits portfolio as well interesting yeah yeah particularly when you're talking about like for example ready to drink which is just a booming category at the moment, one of the fastest growing categories in TBA.

8:35And there's a lot of synergy with that between both the sort of beer learnings and also the spirits ones as well. Yeah. And lots of big headlines last year. So I think you grew 17%. Is that right? That's right. Yes. Yeah. Our eighth consecutive half of double digit growth. Really? Wow. That's incredible. So that's sort of four years then of consistent growth. Yeah, exactly. Which is very consistent, very sustained, which is great. And I think it comes as the result of a very deliberate sort of strategic shift that we made on the brand, you know, that preceded the four years, obviously. But it's great to see it really bearing fruits.

9:09I mean, it's a good question. Can you trace it back to a moment or a period in time where that trajectory changed? And what led to that and what were the kind of main drivers? I mean, I would say less about the point of the trajectory changing and more about the point of which we decided we needed to make a strategic sort of comprehensive intervention. And that was sort of, you know, sort of in the early 2010 to 2014 type of period where our growth had sort of tailed off. And, you know, we were not recruiting drinkers at the rate we wanted to be recruiting them. And as well as that, the, I mean, it sort of culminated with Mintel, I think in 2014, put simply, Guinness is no longer cool.

9:50Oh, no. That's kind of like quite a strike to the heart, right? so we took that very much to heart and basically overtook a full sort of root and branch strategic review of the brand obviously you know it's a brand that's been built on decades of like epic legacy marketing we had you know really strong sort of history particularly in broadcast advertising but the world had changed and media fragmented and consumers were spending their time on digital and social and although tv and broadcast is still a really important channel for guinness and will continue to be, we had to sort of reorientate our model entirely around the social first approach and really building it with our community of drinkers, of which we are incredibly fortunate.

10:30Like the passion that our consumers have for Guinness, I think, is unrivaled. You know, people literally get it tattooed on them. You know, it's amazing, you know. So we really sort of tipped into that from a sort of a media model. And obviously, alongside that, we took a look at our innovation pipeline and we rapidly accelerated programs that have been in development like Guinness Zero for example which has been a huge success story for us but also things like MicroDraft which is basically a piece of kit that allows us put Guinness into any bar or restaurant in the world without the need for keg or any of that cooling setup it's literally a plug and play system so that immediately expanded our distribution base of places where we could be Nitro Surge which was a Covid project which basically we saw the like I mean the nuts things that people were doing to get like a really great pint of Guinness at home like they were doing everything from those supersonic jewellery cleaners they were putting their pint in it to using electric toothbrushes like it was crazy and we were like okay we can do better than this.

11:31They're trying to replicate the pub experience. Basically they wanted all of the craft right so and there's something in that sort of insight that Guinness drinkers in particular love when you give them craft into their hand and really give them the ability to sort of do the two-pipe par pour etc etc so we invented Nitrosurge that came out of that and that's been a big success story for us as well so sort of innovation and we also looked at our sort of go-to route to market and how we distribute Guinness around the world as part of that and we moved to sort of more third-party operations as well so that was very helpful and obviously we doubled down on our sports activation um with amazing properties like obviously Guinness rugby which we um extended into women's rugby um in 20 24 25 obviously the 24 sorry because yeah we're in 25 now I'm a year ahead of myself and then obviously um signing the premier league deal last year as well which is phenomenal I mean And that's a big move, isn't it?

12:29Absolutely. Just before we get into that, because I'd love to sort of, you know, pick your brains on how you bring an activation of that scale to life. You mentioned 0%, and I think that's had a major kind of shift in terms of the brand. I guess a couple of questions. Firstly, how close to the real taste of Guinness can you get without the alcohol? Have you tried it? Yeah, yeah. I think. Well, this really surprised me. Yeah, it is a really good product. Because I wasn't expecting it to be, you know, as close as it was. How did you manage that? It was, I mean, I would put all kudos to our brewers who were just amazing.

13:02An amazing brewer called Aisling perfected the process that's very, very gentle. And that's what sort of differentiated from other non-alcoholic oggers, where you sort of get a little bit of that, you know, harsher taste profile. But she's... You sort of lose the body a lot, don't you? Exactly. It feels like watered down. You need exactly that. So she did an amazing job of working with this process to deliver a Guinness that's, very gently has the alcohol removed. Tastes pretty much identical to Guinness with alcohol. If you're sipping them both side by side and you're a real officiato, you might spot a difference.

13:35But the feedback has been phenomenal. It accounted for 20 % of our overall trademark growth. It's already 12 % of the trademark in GB, for example. And it's just going from strength to strength and we've only really got going on it in GB Ireland and recently in the US so there's huge headroom for further growth with it. 12 % is a lot and there are very very few brand extensions that I've seen get in that short space of time get to double digit kind of share. Yeah it's been a big success story and I think like as I said at the beginning it really sort of you know reflects that consumer trend that we're seeing to moderation to zebra striping to like wanting to have fantastic experiences with no compromise right and and that's what we're giving with guinness era i think people are responding you know really really well to it yeah and you mentioned there that you've now sponsored the uh english premier league yes which is a pretty big deal right i mean that's probably one of the most prestigious globally recognized sponsorships on earth um and you've had a really long heritage in rugby i mean certainly if you were to ask me what do i associate guineas with it would be rugby and that's kind of well established so what was the thinking to make the move into football and then how have you brought that to life because you're up against some very big kind of brands doing something doing similar ones you're right we had a 70-year association with rugby and you know really deeply ingrained in it at all grassroots right through to sort of title sponsorship property and when then moving into women's rugby as well but you know rugby as a property is really in the six nations obviously is confined to sort of gb Ireland as our two main markets that really benefit from that.

15:13So when we heard the Premier League property was available, we jumped at the opportunity because it gives us huge global scale and reach, over 2 billion viewers. And I was just commenting earlier, we moved so quickly on it. We moved from signing the deal to within 90 days, activating it in over 80 countries, 5 ,000 assets produced in those 90 days. Can I say last summer was very busy. Wow. We literally were flat out getting ready for that. And we're activating it around the world in viewing parties, obviously through some beautiful TV spots as well. We're using it to really broaden the impact and awareness and trial of Guinness Zero as well.

15:58So you'll see Guinness Zero being sampled in and leading out on some of the comms as well. you know it's just been a fantastic you know very short sharp eight months but um so far you know we're already the number one beer in consumed in the viewing occasion in gb which is huge because we were number three when we started the property so um like very exciting to see that sort of progress and we're activating it with real scale as well so it's good to see well a couple of questions on that because a lot of people that i speak to in in sponsorship seem to come up with the same challenge, which is how do you value sponsorship?

16:34Because at a headline level, there's a lot of money that gets spent on sponsorship. And it's one of those things that I think marketers struggle a little bit to work out the attribution and how you measure the performance of it. So how do you approach that? I mean, again, we're building the learning right now. It will go into our catalyst system, which will be able to track the actual impact of it. And early science from the research we've done is it is having an impact. It's a big property. And it gives us like a lot of consumption moments, you know, around the game, which is like very strong link with volume.

17:08And we can activate it in channel with proximity media. We can see the benefits of that in terms of short term ROI. So actually, we've a lot of data that would say it's a big part of the success we're having on Guinness. And hopefully, as I say, we're only getting going. We're already eight months into a four year deal. Well, I can attest to it. I was at a Premier League game earlier in the season and you were on all the electronic hoardings and available at half-time as well to drink. Although I have to confess, they did run out during the middle of half-time. I can't believe it. Sorry about that, John.

17:39We'll do better next time. But this was a news story, wasn't it, last Christmas that Guinness actually ran dry. Yeah, I know. It must present its own success slash problem. It was an unprecedented sales period for Guinness. We sold more in December than we did in March, which if you think of Guinness March, you've got St. Patrick's Day and you've got two Six Nations matches. So that just gives you a sense of just how unprecedented the demand was. So we worked pretty hard to get the stocks back up again and meet that demand on an ongoing basis. Now, talking about Six Nations, you now sponsor the women's Six Nations as well, which is great.

18:11And there's some fun activations you're doing as well, which looking at how you bring boots, I think, wasn't it, to women's rugby. Explain what that was about. Yeah, so again, in rugby, I mean, one of the things, even in the men's game we you know start the journey do you remember the Gareth Thomas spot yeah which is beautiful you know really it was the first um openly gay rugby player so we sort of shone the light of on making you know rugby more accessible full stop and that's our mission with rugby um and signing the women's uh deal then obviously was a great foray into that and we set out a campaign called never settle in the first year which was really about writing some of the imbalances in coverage of the women's game in celebrating the women players.

18:53So for example, we did the double blue tick on Wikipedia to make sure that all the women's profiles were updated and were fully validated as well across all social channels. And then we did a media campaign, which was around really boosting the media coverage that's given to the women's game as well. So that was a sort of first year in. And then this year for the season, we did this amazing world first which is the very first ever soft ground football rugby boot designed for women and we did it in partnership with IDA we gave it to the players we gave 2000 clubs at grassroots level and honestly the commentary from the women players is just fantastic and again it's like kind of nuts isn't it that's like we're not designing sports shoes for women and we need to be so yeah a great first and then we did some other amazing work on accessibility in terms of for visually impaired and people who are hard of hearing with live audio descriptions for the first time ever at games and we did a um an amazing uh piece of technology called field of vision where we launched that at the irish games this year and people who were visually impaired could follow for the first time ever in real time the action was going on on the How does that work?

20:05Yeah, it's amazing. It's amazing. It's sort of like a, for want of a better word, it looks a bit like an iPad with the screen in real time. So you can kind of touch and feel what the players are doing. And obviously, you're getting the audio as well. So you actually sort of have a sense of really what it's there to be at. That's amazing. That's astonishing. Wow, I love that. I remember actually years ago, I was working on LucasAid. And we were a sponsor of the men's English team. and then we took out a sponsorship of the women's team. And what I noticed, I mean, this was back in about 2016, 17.

20:38So I think, you know, England hadn't won the women's Euros at that point. So, you know, we were kind of early in our journey. But what I noticed is when you kind of, you know, as we did move into women's football, there's so much more passion and engagement from the players. I remember speaking to the FA and they're like, well, you get maybe 20 minutes of Harry Kane a year in the deal. Or with the women's team, it's like, right, they'll all turn up to any event you want. They'll go anywhere. they'll engage with everything. And I just think there's so much more passion and engagement, isn't there, when you put a spotlight on it?

21:06Absolutely. And it's a game that's still growing. It's very exciting to see the skill and the standard of women's rugby and how it's really just, I think, capturing new audiences. It's brilliant to see Twickenham completely full for women's matches, etc. Whereas a couple of years ago, that wouldn't have been the case. There's still work to do. And we're committed to sticking by that mantra of we won't settle until, you know, we've achieved the same things in partnership with the unions for women's rugby as we have for men. So I think that's very exciting. That's wonderful to see, isn't it? And I mean, for me as a dad with two daughters, it's exciting to see what's going on.

21:44I wanted to pick out a comment you made in an article about rigour and return. You know, the fact that, you know, there are some things you can measure easily and there's some things you can't measure. What's your approach to kind of evaluating i mean i guess beyond catalyst you know you've explained that but how do you measure kind of the effectiveness of marketing more broadly and how do you make the kind of case for it internally yeah i mean to be honest john we do use catalyst and like we have literally data at our fingerprint that shows the return investment of you know pretty much most of our growth drivers there's some areas like cultural influence is still an area where it's harder to get really accurate data on.

22:22But across the board, you know, you can basically see like, and as I said, like what happens to your ROI if you shift money from broadcast to digital, for example, which we did on Guinness, some improvement as a result in our short term and held our long term ROI as well. So like it is literally with that degree of accuracy that you're able to pinpoint it. And, you know, I think then the other piece is making room for experiments and you know bravery and having some some things that you just say actually this is something we're just going to do and we don't know yet but we're going to learn a ton and then therefore your KPIs for that is more about learning experimenting what are we actually gathering here in terms of consumer insight or knowledge as to how a new platform works or knowledge as to how we might execute something differently so I think you separate out the ones where you you know sort of you know these are absolutely proven growth drivers and then create the space for creativity and groundbreaking work as well.

23:17I like giving the room for the experimentation, because that's where you uncover the potential new gems and the things that kind of will break the model of the future. Yeah, break the model a little. Tweak around the agency. You don't want to break the model fully. Yeah, yeah, yeah. No, but I think it's important, you know, that you do create that space for, you know, both our agency partners and our teams to sort of feel they can come to us with something that hasn't been done before, because we've always been a brand, particularly on Guinness, but in Diageo across the board, that's, you know, focused on breaking your ground and doing work that really sort of, you know, makes you go, I wish I had done that.

23:52And yes, so it's, I think it's an exciting thing. It means we get the best people on our work as well. So yeah. And one brand in your portfolio we haven't talked about that's a big favourite in our household is Bailey's, of course. And Bailey's turned 50, didn't it, last year? Yeah, Bailey's is an amazing brand. And again, you know, sort of a big sort of reframe that we led out on Bailey's because before Bailey's was sort of like this dusty, slightly forgotten about liqueur brand, you know, drunk by your granny maybe and on the bottom shelf in a supermarket. And OK, at Christmas it would come out, but the rest of the year wasn't really top of mind.

24:26So we sort of went right back to the sort of product insight that's at the heart of Bailey's, which is that it's part cake, part booze, pure pleasure. And we said, you know what, our mission is to be the number one grown up adult treat because all other treats in the world, you know, don't have what we bring to the party, which is that bit of booze, right? So we created a whole strategy all around building Bailey's presence as a treat brand. And it's been, you know, a fantastic turnaround story for Bailey's. It's now 40 % bigger than it was before that strategy took off. So it's been great, yeah.

25:01So 50 years at Bailey's, one of our biggest innovations and glad to see that it's still innovating. We have a fantastic oat milk we've just launched in the US and we have Bailey's chocolate as well, which is doing very well. Well, I was looking at it, it was born two years, sorry, two months before I was. So in the same year. So I had a bit of affinity for it. And you're still innovating too, you see. Exactly. Well, yeah, exactly. Yeah, keep going on that front. So you talked about 40 % growth. What were the main kind of changes that you made that delivered on that growth? Was it innovation led?

25:28Like you talked about chocolate and things like that. I mean, I think it's the whole reframe of actually saying we are a treat brand and understanding that consumer insight. Yeah. And then behaving like a treat brand. So that meant that you're showing up where, you know, much more present in Instagram. You're showing up with delicious serves. You're doing partnerships with, you know, licensing opportunities, for example, moving into ice cream, chocolate, etc. So then you have dual siting in store, which is very helpful in terms of building physical availability. And, you know, again, like Bailey's is highly responsive to, you know, media dollars.

26:00So honestly, you switch them on, you see the response, you know. So getting that balance right in the mix and then extending the seasonality of Baileys from Christmas into, you know, we started obviously with Easter. We have an amazing sort of Easter egg campaign where you fill chocolate Easter egg with Baileys, delicious, and, you know, use it as a serving vessel. So, you know, expanding into then even into summer with like things like iced Baileys frappes and coffees, which is delicious. We were just saying we should get it here at Cannes. Yeah. So, yeah, so it's a combination of, you know, really extending the salience and relevance and then being clear on your proposition, which is adult trade.