Business Irish

Saturday 7 December 2019

His tap runneth over: the man who keeps Guinness flowing

As head of Diageo's Irish brewing operation, Paul Armstrong looks after the black stuff. Sarah McCabe picked his brains over a pint.

Paul Armstrong; illustration by Jon Berkeley
Paul Armstrong; illustration by Jon Berkeley

GUINNESS. Is there any other brand on earth so heavily intertwined with a national identity? It sums up so much of what it means to be Irish, whether we like it our not. Cosy pubs, hard drinkers, working-class roots made good.

President Obama happily downs it on camera. Foreigners drink it at the furthest corners of the earth, eager for a slice of Irishness, their order recognisable whether they are speaking Spanish or Swahili.

At home, we treat it like an old friend; "to Arthur!" we cry, greedily gulping it down after work, reaffirming our place in the world, our heritage. Marketing executives say it long ago abandoned the confines of "product" - it is a lifestyle, a story, part of who we are.

But just how many of us really rock up at the pub on a Friday night and order a Guinness?

Fewer and fewer, is the answer.

Sales of the black stuff have held up relatively well outside of Irish borders over the past few years, despite a small contraction last year, but they are tanking at home. Net sales fell by 6pc in the final six months of 2013, Diageo's most recent set of results.

Even TDs are losing their taste for it, with sales in the Dail bar down by a fifth last year.

If this keeps Paul Armstrong up at night - he is Diageo's top man in Ireland - he doesn't let it show. He exudes an air of contentment as we wander around St James' Gate's vast campus, animatedly explaining the logistics behind the brand new €159m brewhouse he will unveil at a no-expense-spared bash the following day.

Armstrong (58) looks after the Diageo's entire Irish brewing operation. That encompasses about 600 staff and an annual spend of £300m as well as exports to 130 counties and facilities that produce 35pc of Diageo's total beer stocks.

He, more than anyone else in the country, has an interest in whether the Irish public is drinking Guinness.

Most of the decline, he tells me later over a pint, comes down to an overall slump in pub sales. "At home the trend is very clear. Pubs are under pressure, particularly rural pubs".

He blames enhanced drink and drive legislation as one of the reasons for this, though is quick to point out that Diageo takes a tough stance on the misuse of alcohol. That line repeated regularly during the interview.

"People's drinking habits are changing, too - wine is much more popular today. When I started at Guinness 34 years ago you drank beer at home. A bottle of wine after work just wasn't the done thing. Now most families have a well-stocked wine rack."

Add to the mix more competition for discretionary income in general, everything from ramped-up cinema releases to pop-up events. The pub simply has less of a hold over our social lives.

But Guinness still makes up, he points out, one out of every three pints drank in Ireland. "Our goal is to hold that share."

Armstrong joined Guinness in 1981, more than a decade before it merged with British conglomerate Grand Metropolitan and formed the group known as Diageo.

He is an engineer by trade but has worn a lot of hats in his time at the company. "The fantastic thing about this business is that you can do anything you want within it - you can come in as an engineer and end up as a brewing expert".

As we wander around the world's most famous brewery, a hive of activity on the banks of the Liffey in Dublin 8, almost every staff member stops to say hello. They clearly like him. "After 34 years, I know almost everyone here," he says. He was shortlisted in the "most trusted leader" category at last year's Great Places to Work Awards.

But a happy working environment will not solve Guinness' domestic sales problem. The decline of the pub is not its only problem; the slump has also been blamed on the fact that young people aren't forming any relationship with the brand.

Faced with more choice than ever, they are moving into their thirties without developing a taste for it.

Guinness' competitors, by contrast, have been incredibly effective at targeting young Irish people. Heineken and Bacardi pour millions at sponsoring youth-oriented events like Electric Picnic, but Guinness has eschewed this tactic. Even though its headline Arthur's Day promotion heavily emphasised music by hosting surprise gigs in Irish pubs, the campaign mainly played upon the heritage of Guinness rather than its youth appeal.

That is about to change with the roll-out of Guinness Amplify. Amplify is the replacement for Arthur's Day, the annual celebration of founder Arthur Guinness' birthday which attracted condemnation last year for promoting binge drinking.

Damning stories on the subject made headlines around the world, even the front page of the Financial Times.

Diageo quietly scrapped the event this year in favour of a more music-oriented replacement. Amplify is a sort of mini music festival centred around the pub, bringing acts big and small to Irish snugs for a series of surprise gigs in September and October.

Armstrong admits that "recruitment", as he unashamedly refers to the targeting of young people, is a concern. But that is changing, he says, pointing to the fact that I (a twenty-something) am sitting there with a glass of Guinness in my hand.

Its youth-oriented efforts include piggybacking on the explosion in popularity of craft beer, which he describes as a "fantastic opportunity."

Diageo claims to own Ireland's number one craft beer in the form of Smithwicks Pale Ale, though purists might challenge the description of a variety of Smithwicks that is made in the world's most advanced brewery as "craft".

It recently launched two new Guinness brews marketed as craft beers, rich-tasting Guinness Dublin Porter and Guinness West Indies Porter.

But the company clearly does not want to entice younger drinkers at the risk of alienating core customers. It is not going to change what Guinness is fundamentally about, says Armstrong.

"Guinness is a drink that comes with maturity. People grow into it."

Some of the publicity around Arthur's Day was a bit unfair, he adds.

"Clearly we didn't like some of the publicity around it . . . we don't think people who drink Guinness are binge-drinkers.

"Like all marketing campaigns it came to a natural end. Amplify is very much about pubs. It is a logical change of direction."

Diageo, he says, leads the agenda in terms of encouraging responsible consumption of alcohol. "It is not in our interest to have people misuse our products".

Armstrong was brought up in Belfast in humble surroundings. His father was a painter and decorator.

He calls himself a product of Northern Ireland's 11-plus system, which allowed him to go to grammar school and on to an engineering degree at Queens University without racking up fees.

"Without the 11 plus I don't know where I would have ended up" he says.

His job appears very glamorous, all sampling new brews and greeting the various rock stars who pass through Ireland's most popular tourist attraction, the Guinness Storehouse - the Queen, Tom Cruise and David Cameron have all visited.

But like most senior management jobs, the truth is a little less starry. It is "a "relentless drum beat" of performance appraisal.

He is in work by 8am and rarely leaves before 7pm, with an hour-long commute to and from Delgany thrown in the mix.

"No matter where I am in the world, on Friday mornings at 8.30am I am on a conference call asking what we were supposed to deliver that week and whether we actually delivered it."

For the last few years his job has also included overseeing the construction of Brewhouse Four on the St James' Gate site, the largest stout brewery in the world.

Plans were first floated in 2007 but ground to a halt as the recession bit down and finance dried up, so it has been a long time in the making.

The finished product, unveiled on Wednesday, is a vast museum of spotless steel drums where various concoctions bubble away, separating and maturing. Armstrong is clearly a stickler for keeping a clean shop. It was he who devised the Guinness teams who visit pubs around the country to clean and check the quality of the taps; before that it was done by publicans, with varying levels of success.

St James' Gate produces about 40pc of the world's Guinness stocks. In total the product generates around £1.7bn (€2.1bn) in revenue a year.

The campus is designed like a military compound, engineered in such a way that if one part catches fire, it will be contained.

It is but a cog in a grander machine. Guinness is brewed in fifty countries, sometimes by Diageo itself, sometimes by local breweries under licence.

But it is still the only place in the world where the secret Guinness "essence" is produced from a mixture of unicorn tears and fairy blood (they won't reveal the ingredients so one can speculate).

Regardless of where it is brewed in the world, every single pint, can or bottle must have this essence added before it can call itself Guinness.

While I get an inside peek at the site and even get to traverse through the tunnel, built in 1895, that runs underneath it - whose presence Dave Cameron, Tom Cruise and the Queen have all graced - I can't get anywhere near the room where this essence is brewed.

Though one suspects that, like Coca Cola's secret formula, there might be an element of marketing to the whole concept.

The humble pint powers a host of hidden economies, Armstrong says. Diageo is the single largest buyer of Irish malted barley, he points out.

Many farmers make their livelihoods from it and stacks and stacks of the grain are trucked to James' Gate from farms around the country every day.

The quality of barley changes every year - four years ago a wet summer didn't do it any favours, while this year's beautiful sunny weather created its own challenges and meant that a team of 90 or so brewers work hard to keep the taste consistent. They mix different years of batches and so on.

Armstrong's responsibilities don't end with the black stuff. He looks after all of Diageo's beers in Ireland, which includes Smithwicks and Budweiser brewed under license for Anheiser Busch. But Guinness is definitely his drink of choice.

"I loved it before I joined" he says firmly, scoffing at my suggestion that blackcurrant cordial makes a nice addition to a pint.

There is something grandfatherly and paternal about him that fits with the brand's image of longevity. "We've been around for 255 years. We'll be here for another 255," he says.

"Marketing tells us that all brands have a life span, a natural end. Guinness defies that."

 

HISTORY BUFF WHO LIKES COUNTRY TUNES

Describe yourself . . .  "Determined, passionate, a family man"

From . . . "Belfast, now living in Delgany, Co Wicklow".

Educated at . . . "Queen's University, a degree in engineering."

Hobbies . . . "I am an avid sports fan. I'm passionate about Arsenal and go to as many of their matches as I can. I also love GAA and was delighted the hurling final was a draw so I can try and go to the replay! I also love music of all kinds - I had Garth Brooks tickets and I'm off to see James Taylor.

The last book I read . . . "The third of a trilogy on Robert Bruce, by Robyn Young. No comment on the Scottish vote."

The last really good meal I had was . . . "At the Cliff House Hotel in Ardmore, Co Waterford, where I spent a few days with my wife as a Christmas present. One of the best meals I have ever had."

My last holiday was . . . "Orlando Florida with my wife and 10-year-old son. Disneyland was so much fun that we abandoned a planned visit to the coast and stayed there an extra week."

What's next . . . "I'm 58 so I'm beginning to think about retirement. But I wont stop completely. I have gotten a lot out of life, I want to give back."

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