Non-alcoholic Guinness hopes to address beer challenges

01-Sep-2015 - Last updated on 02-Sep-2015 at 11:26 GMT

Diageo hopes its non-alcoholic Guinness will improve fortunes in Indonesia, with the alcoholic beverage giant saying the beverage is addressing market trends in the country, and legislation which now bans the sale of beer in some stores.

The company is trialling Guinness Zero, its 0% ABV version of its famous Guinness stout, in Indonesia.

Diageo says it has been seeing increased demand in the non-alcoholic beer category in Asia. It has also been seeing disruption in Indonesia, where recent legislation banned the sale of beer in mini marts and convenience stores – leading to volume decline of around 40% since the changes were announced in January. Diageo expects to see such disruption continue into FY 2016.

Innovation in response to changing consumer demands and market trends is an important part of Diageo’s strategy in Asia, the company said as it released its FY2015 results in June.

Guinness Zero is a ‘delicious zero alcohol product made using the finest ingredients; which retains the classic Guinness liquid colour, creamy head and distinctive flavour,’ and was launched in September 2014.

Diageo told BeverageDaily.com the drink is available in all major cities and towns in Sumatera and Java (where the capital of Jakarta is located) in Indonesia. It retails at a price of 8,500 Indonesian Rupiah. However, it is understood there are no plans to extend the product elsewhere.

“Guinness Zero allows consumers experience the bold Guinness flavour without the alcohol content,” continued Diageo.

The packaging retains the ‘Guinness’ word and font, harp logo, and signature from Arthur Guinness. However, the black base is replaced by a yellow and white backdrop.

Asia Pacific accounts for 21% of Diageo’s net sales, and 11% of the group’s operating profit.

Euromonitor International says the beer category in Indonesia has been strongly affected by April 2014 legislation which mandates that every retailer selling alcohol requires a licence. Beer sales are expected to slow down significantly compared to previous projections.

However, it also believes the growth of modern retailers equipped with proper licenses will offset these issues, meaning it expects overall positive growth in beer sales to be recorded.