Barry O’Sullivan is in chipper form as we sit down to chat about Guinness and the other leading drinks brands in a portfolio that he manages as the head of Diageo Ireland. “Business is going quite well right now,” he says from a funky meeting room at 151 Thomas Street, a building that was formerly the head office of agri-foods group IAWS and is just across the road from part of the Guinness brewery site.
His runs a large empire. There’s Guinness obviously, Hop House and Rockshore lager, Smithwick’s ale, Baileys Irish Cream, Roe & Coe Irish whiskey, Gordon’s and Tanqueray gin, and it produces Carlsberg for the Irish market under licence from its Danish owner.
A planning application has been submitted for a €200 million new brewery in Kildare that will handle all its non-Guinness beers, freeing up space in St James’s Gate for more of the pint of plain.
“We’re ready to go on that,” he says. “It’s IDA land right beside a Lidl distribution centre. Essentially, all the infrastructure is in place, access to the motorways and so on. We’re just waiting now for the green light.”
O’Sullivan also has responsibility for the Guinness Storehouse, the country’s top paid visitor attraction that has been shortlisted with the Eiffel Tower, no less, for a global tourism award.
And there’s also the redevelopment of the Guinness Quarter, a 12.5-acre site at the St James’s Gate brewery in Dublin 8 that is being redeveloped in partnership with Ballymore for a mix of residential (including some social housing), leisure and offices. The project could take 10 to 15 years to complete, he says.
Guinness dominates the beer market in Ireland, accounting for one in three pints of all beer sold on the island, according to O’Sullivan. Exports of the beer amount to about €1 billion annually
And Diageo recently chose Dublin as its European digital hub, recruiting for an initial 10 roles but with expansion in mind.
We meet a day before The Irish Times revealed that Heineken had ditched its Island’s Edge stout just two years after the launch, due to a lack of interest in the market. Heineken had targeted a 10 per cent share of the Irish stout market at the time of the launch.
Guinness dominates the stout market in Ireland and is a huge player of the overall beer market, accounting for one in three pints of all beer sold on the island, according to O’Sullivan. Exports of the beer amount to about €1 billion annually.
Did Diageo double down on Guinness with publicans post the launch of Island’s Edge to make sure it never got momentum?
“We just stayed focused on what we do. Guinness is core for us. Coming out of Covid, we definitely doubled down, as you say, on supporting the on-trade in recovering. I think it’s still it’s still in that process. It’s still recovering, but doing well.”
Part of the support offered to publicans has been to provide €2,500 on average in grants for infrastructure, some of this for its zero alcohol brand.
Why is Guinness stout such a popular beer in Ireland?
“Taste and quality would be the two things. Taste is the number one driver for beer. And Guinness really delivers. It’s a fantastic tasting beer. It’s so fresh, it’s brewed right here, obviously. Sometimes, literally the same day, it’s shipped straight out to the pub [from the brewery].”
For the past number of years, Diageo has been trying to perfect that same taste for Guinness 0.0, its zero alcohol stout. This comes amid changes in consumption by consumers, particularly young people, and pressure from the anti-alcohol lobby to tighten restrictions on the sale and marketing of booze.
“There’s definitely a growing market [for zero alcohol Guinness],” he says. “Again, taste and choice are the key drivers of the growth in what we’re doing. That’s one of the reasons why it took quite a long time for Diageo to really perfect the formula for a non-alcoholic beer.
It takes twice the actual capacity from a brewery standpoint to produce one serve of Guinness 0.0, as it does to serve Guinness
— Barry O'Sullivan
“One of the best ways to enjoy Guinness in an Irish context is a pint in a pub. So you really have to be able to get a 0.0 on draft as well. That really is a game-changer... being able to bring 0.0 on draft, great taste, great quality.”
According to O’Sullivan, Guinness 0.0 tastes exactly the same as a pint of regular stout but without the alcohol. Perfecting it was “quite complex”.
“It starts out life as Guinness and then it goes through a second additional process, a filtration process. It’s very gentle on the beer, because beer doesn’t respond well to heat, for example. So it’s a cold filtration process. It’s slow and it’s gentle and it removes the alcohol.
“That takes a lot of time, takes up a lot of capacity here on the site, it takes twice the actual capacity from a brewery standpoint to produce one serve of Guinness 0.0, as it does to serve Guinness.”
This explains why it unveiled a €25 million investment in the St James’s Gate brewery in July to meet the rapidly growing demand for Guinness 0.0. This involved the installation of six new tanks towering 25m high that will have a total capacity of almost 90 million pints and will ramp up production of the alcohol-free stout by 300 per cent.
“It’s taken a while for us to get to the point where we could actually stand over Guinness 0.0 and say, ‘Yeah, we now have something that can deliver a great tasting, great quality pint of Guinness 0.0′. The feedback from consumers and customers alike is that yeah, this Guinness really delivers on taste.”
As part of its push into zero alcohol on draft, Diageo has been piloting a new draft product for pubs, starting last year with about 10 venues. That figure will rise by 1,000 by Christmas, with a view to doubling that total next year.
In a number of pubs, Diageo is having to help with funding for new infrastructure for cold-room facilities for the zero alcohol product.
How big could Guinness 0.0 become?
“I think it could become up to 15 per cent of Guinness sales,” he says.
In what time frame?
“I’d would say in five-plus years that could be a reality. Even if it’s 10 or 11 per cent, that would be an amazing success. If you look at markets like Spain and Germany, they’re already at that level [with zero alcohol products]. They’ve taken a number of years to get there but evidence suggests we’re moving at quite a pace,” he says, adding that the growth rate here currently for non-alcohol beer is running at 25 per cent and at 50 per cent for spirits.
Guinness 0.0 is now a key marketing tool for Diageo in promoting the stout via its various sports and other sponsorships. This has generated criticism from the anti-alcohol lobby who argue that it’s alcohol advertising by stealth.
“What we actually find from our research is that a lot of Guinness 0.0 drinkers are not necessarily Guinness drinkers, they’re just attracted to its great taste and quality,” O’Sullivan responds, insisting that Diageo takes seriously the part it has to play in terms of responsible drinking.
“Last year alone, we reached three and a half million Irish adults with messages of moderation,” he says. “Our CEO at a global level [Debra Crew] has spoken about consumers generally drinking better, not more. That’s what we see in Ireland, in that attitudes are shifting and behaviour towards alcohol is shifting. Overall consumption is down 30 per cent from its peak around the year 2002. About 20 per cent of consumers today will say that they are drinking less than a decade ago, another 20 per cent will actually say that they’re not drinking at all. There’s no doubt that behaviour has changed. We think that’s a good thing.”
O’Sullivan joined Diageo in 2021 after a career spanning more than 20 years with food giant Mars, working in senior roles on four continents.
He left Ireland in 2010 and went to work for Mars for three years in the Middle East, the same time frame in Mexico and just over four years in Australia. “I really enjoyed it and it’s easy enough to move family around when your kids are young as well. My daughters were three and one and a half at the time we left [Ireland].”
His children are now in secondary school and O’Sullivan says this played a large part in the decision to return home. “When you’re a teenager, your environment and your friends are everything, right?”
While working in Mars’ petcare division in Australia, O’Sullivan and the family took in a rescue dog, a kelpie that they named Lola. “She’s still with us. She came from Australia.”
It’s the history, the heritage, the legacy, the 9,000-year lease that Arthur Guinness signed, the site here at St James’s Gate, I mean, driving through the gates for the first time was quite special
— Barry O'Sullivan, on what attracted him to working for Diageo
O’Sullivan and the family had planned a trip around Australia before returning to Ireland but cut it short due to Covid restrictions being imposed in various states. “At the time the individual states in Australia were getting quite strict and were operating different systems. We were in New South Wales but we were travelling back home out of Victoria. So we just decided to pack up and go, because we didn’t want to get stuck in the wrong place. With all the restrictions on human movement, actually Lola came into the country no problem: plane landed, get off and that was it.”
Recognising that returning to Ireland to a senior role with Mars was always “going to be difficult”, O’Sullivan looked around and landed his current role with Diageo
“It’s the history, the heritage, the legacy, the 9,000-year lease that Arthur Guinness signed, the site here at St James’s Gate, I mean, driving through the gates for the first time was quite special.”
He’s clearly bought in fully to the Guinness marketing shtick.
Both his parents are from Waterford but he grew up in Baldoyle in north Dublin as one of four boys in the family. His father was a sales and marketing director for Clayton Love distribution. His mother worked as a company secretary before focusing on raising the four boys.
O’Sullivan went to secondary school in Belvedere before doing an arts degree in UCD and a masters in the Smurfit Business School in Dublin. Mars was his first “proper job”, and where he spent more than two decades.
He says Guinness was his first drink but he didn’t start imbibing until he was about 21 and was in college.
Some believe that this is the beginning of the end for alcohol and that the proliferation of zero-alcohol products on the market by drinks manufacturers now is an acknowledgment of that fact.
“I don’t think so,” O’Sullivan says matter of factly. “Definitely attitudes are a shifting, of that there’s no question. The approach taken now is to moderate drinking, and there’s more options and opportunities to moderate your drinking.”
Does he see a day when non-alcoholic beers will outsell the alcoholic ones?
“That’s a long, long way away.”
CV
Name: Barry O’Sullivan
Job: Managing director and chairman of Diageo Ireland
Age: 49
Lives: Sutton, Dublin
Family: Married to Priya Rana with two daughters, Kiara and Karina
Hobbies: Walking his dog and spending time with friends.
Something we might expect: Guinness is his favourite drink.
Something that might surprise: “I love spicy Indian food, with chilli, ginger and garlic.”
