Diageo plans local production of alcohol-free Guinness in Indonesia

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Guinness draughtBritish beverage giant Diageo, owner of the iconic Guinness beer brand, is planning a manufacturing site to locally produce its new alcohol-free version of Guinness in Indonesia where the drink has been introduced in a test run in September last year, so far the only market where Guinness minus the alcohol is being sold.

The drink, Guinness Zero, grew popular after a clampdown by the Indonesian government on alcohol sales in convenience stores in the world’s biggest Muslim-majority country imposed in April 2015. The ban encompasses the sale of alcoholic beverages – those with less than five percent alcohol content such as beer and low-alcohol wine – in 16,000 minimarts and 55,000 small retail shops, while large supermarkets, hotels and food outlets are still able to sell these alcoholic beverages.

Currently, Diageo is importing Guinness Zero from Ireland, paying about 10 per cent in duties as well as high transport costs. Plans are to start local production in a facility on Bali in a few months. The island has been exempted from the sales ban on alcohol drinks due to its large tourism industry.

While Diageo is still selling regular Guinness in large supermarkets and restaurants, it has invested about $1 million so far to launch Guinness Zero.

“We already had plans to enter the zero-alcohol beer market,” a Diageo spokesman, adding that “after the ban came in, essentially it made it even more important.”

Diageo has about 15 per cent market share of the Indonesian beer market, which until last year was the world’s fifth-biggest market for Guinness with annual sales of about 400,000 hectoliters. However, since the ban, sales of Guinness and Diageo’s other alcoholic beverages have fallen 40 per cent. But the alcohol-free drink has been performing very well since its Indonesian launch due to growing market demand in the non-alcoholic beer category.

 

Guinness-zeroWith Guinness Zero, which is sold in cans, Diageo now aims to capture 10 per cent of Indonesia’s 150,000-hectoliter non-alcoholic beer market within two years, from about 7 per cent. Its main competition is Bintang Zero, made by Multi Bintang, Indonesia’s largest brewery majority-owned by Heineken.

There are so far no plans to introduce the alcohol-free Guinness back in the UK or Ireland, or on other Western markets, a reminder of the sensational flop of a low-calorie-low-alcohol Guinness Light Diageo launched a few years ago which earned the title ‘The HMS Titanic of stout products’ from The Irish Times. A wheat beer called Breo and Guinness Black Lager also shared a similar misfortune.

But how does Guinness Zero actually taste? Those who tried it say “it is a drink with a very strong coffee taste, thanks to its malt coffee flavour.” Others feel “it doesn’t taste like beer at all, but sweet and chocolatey, like coffee essence in a glass of Coke.”

One taster describes Guinness Zero as “very unique due to delicious caramel combined with carbonated water and a bit of a sour taste which makes the drink fresh and not taste of malt, barley and hops typical of beer.”

However, some oppose the drink at all, arguing “that such a drinks exists is a travesty to the great traditions of Guinness.” The iconic beer was first brewed in 1759 in Dublin and today is one of the most successful beer brands worldwide. It is brewed in almost 60 countries and available in over 120. Annual sales total 850 million liters or 1.5 billion British pints.

 

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Reading Time: 2 minutes

British beverage giant Diageo, owner of the iconic Guinness beer brand, is planning a manufacturing site to locally produce its new alcohol-free version of Guinness in Indonesia where the drink has been introduced in a test run in September last year, so far the only market where Guinness minus the alcohol is being sold.

Reading Time: 2 minutes

Guinness draughtBritish beverage giant Diageo, owner of the iconic Guinness beer brand, is planning a manufacturing site to locally produce its new alcohol-free version of Guinness in Indonesia where the drink has been introduced in a test run in September last year, so far the only market where Guinness minus the alcohol is being sold.

The drink, Guinness Zero, grew popular after a clampdown by the Indonesian government on alcohol sales in convenience stores in the world’s biggest Muslim-majority country imposed in April 2015. The ban encompasses the sale of alcoholic beverages – those with less than five percent alcohol content such as beer and low-alcohol wine – in 16,000 minimarts and 55,000 small retail shops, while large supermarkets, hotels and food outlets are still able to sell these alcoholic beverages.

Currently, Diageo is importing Guinness Zero from Ireland, paying about 10 per cent in duties as well as high transport costs. Plans are to start local production in a facility on Bali in a few months. The island has been exempted from the sales ban on alcohol drinks due to its large tourism industry.

While Diageo is still selling regular Guinness in large supermarkets and restaurants, it has invested about $1 million so far to launch Guinness Zero.

“We already had plans to enter the zero-alcohol beer market,” a Diageo spokesman, adding that “after the ban came in, essentially it made it even more important.”

Diageo has about 15 per cent market share of the Indonesian beer market, which until last year was the world’s fifth-biggest market for Guinness with annual sales of about 400,000 hectoliters. However, since the ban, sales of Guinness and Diageo’s other alcoholic beverages have fallen 40 per cent. But the alcohol-free drink has been performing very well since its Indonesian launch due to growing market demand in the non-alcoholic beer category.

 

Guinness-zeroWith Guinness Zero, which is sold in cans, Diageo now aims to capture 10 per cent of Indonesia’s 150,000-hectoliter non-alcoholic beer market within two years, from about 7 per cent. Its main competition is Bintang Zero, made by Multi Bintang, Indonesia’s largest brewery majority-owned by Heineken.

There are so far no plans to introduce the alcohol-free Guinness back in the UK or Ireland, or on other Western markets, a reminder of the sensational flop of a low-calorie-low-alcohol Guinness Light Diageo launched a few years ago which earned the title ‘The HMS Titanic of stout products’ from The Irish Times. A wheat beer called Breo and Guinness Black Lager also shared a similar misfortune.

But how does Guinness Zero actually taste? Those who tried it say “it is a drink with a very strong coffee taste, thanks to its malt coffee flavour.” Others feel “it doesn’t taste like beer at all, but sweet and chocolatey, like coffee essence in a glass of Coke.”

One taster describes Guinness Zero as “very unique due to delicious caramel combined with carbonated water and a bit of a sour taste which makes the drink fresh and not taste of malt, barley and hops typical of beer.”

However, some oppose the drink at all, arguing “that such a drinks exists is a travesty to the great traditions of Guinness.” The iconic beer was first brewed in 1759 in Dublin and today is one of the most successful beer brands worldwide. It is brewed in almost 60 countries and available in over 120. Annual sales total 850 million liters or 1.5 billion British pints.

 

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