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New Diageo boss outlines spirit giant's big plans

Shake it up: Charles Ireland has big plans for Diageo while he's in office

Diageo’s UK operations are in good form, but the spirit giant’s new boss Charles Ireland has big plans to shake things up while he’s in office

It’s been almost a year since Charles Ireland took the role of Diageo general manager for GB, Ireland and France, and he couldn’t look more settled. The boss of the UK’s largest spirits supplier is calm and collected on the top floor of the company’s Park Royal, London, head office.

NEW: Bar Essentials book

This year The Morning Advertiser and Diageo have partnered to produce an exclusive Bar Essentials book to help pubs boost spirits and cocktail sales.
Throughout the rest of the year together we will publish snippets of each chapter in the magazine, followed by the release in full online.
At the end of the year we will publish the full printed version, which will be sent to selected operators.

His cool demeanour isn’t a sign that Ireland, who took over from Andrew Cowan in July last year, is lacking ideas to shake things up. Far from it. He has ambitions to “honour the work of his predecessors” by leaving the operation better off than he found it, which is a legacy Ireland believes he has left behind him throughout his career.

Before he returned to the shores of the UK, Ireland was the managing director of East Africa Breweries Limited (EABL), a role Cowan has since moved on to. Working overseas is very familiar territory for the boss. In fact, the majority of Ireland’s work with Diageo has kept him away from the UK for more than a decade.

After working at Nestlé for 10 years, he joined Bass Brewers just months before the merger of the Grand Metropolitan Public Limited Company and Guinness PLC in 1997, which created what we now know as Diageo.

He stayed with Bass for about 18 months before becoming trade marketing director of GB and then moved into his first overseas role as commercial director for ready-to-drink (RTD) products, where he was responsible for the global launch of Smirnoff Ice.

“I did that for three years and saw the world, and worked with different markets, understanding their business models and whether or not they were set up to be successful with RTDs. Then I took on my first general manager role in Asia for three years, then had a year as commercial director of Asia-Pacific,” he explains.

Following that he was the head of a joint venture with Diageo and Heineken in Malaysia for almost seven years and moved to the EABL role for three years.

Throughout that time, Ireland has seen many changes in the sector, particularly in its structure. “When I first started in GB there were big, integrated operations,” he says. “Bass Brewers, I think, were controlling around 30,000 pubs and they had about a third of the wholesale market and there were huge brands like Carling Black Label dominating the market.”

The big vertically integrated models failed, mostly when the smoking ban came in, but Ireland believes the ensuing changes were for the best. The set-up of the trade in those days, he explains, was wet-led and that meant people’s habits were very predictable.

At a glance: Ireland's career:

  • 1987–1997: various roles at Nestlé
  • 1997–1999: Diageo on-trade account director
  • 1999–2001: customer marketing director
  • 2001–2003: global RTD commercial director
  • 2003–2006: MD Diageo Philippines
  • 2006–2013: MD Guinness Archor Berhard
  • 2013–2016: group MD/CEO East African Breweries
  • 2016–present: GM for GB, Ireland and France

“People would go into their local boozer and would be served by the same person every night with ‘a pint of the usual’ and they would drink the same product night after night – or whenever they were there – in the same spot at the bar.”

Since the sector’s “radical change”, pubs have become more inclusive and welcoming. As a result, the drinks now on offer are very different. “Drinking behaviour has changed and there’s much more premium drinking, which is obviously massively weighted towards the south-east and London,” he explains.

“In such a lot of ways things are better. I heard on the news that sales of shampoo are falling and that’s because of the smoking ban – it’s curious, but it makes sense. People are more comfortable going out because they don’t smell of smoke.”

Diageo, too, has had to change its business in response to this shift, he says. Previously, the company focused on about five key brands in its portfolio, such as Guinness, Bells, Baileys and Gordon’s, which is obviously no longer the case.

Volumes grow as a result

Diageo’s portfolio now has a familiar mix of premium products, which are seeing sales volumes grow as a result of increased consumer demand and the company’s work to push them in the on and off-trade.

“When I think about the portfolio today, it’s reshaped significantly and more than 10% of our sales come from luxury brands and premium top-end brands that you find in premium outlets.”

While he says there is a lot more work to do to boost the sales of these products, such as Cîroc and Tanqueray No 10, he concedes the segment is not the be-all-and-end-all of the spirits category.

As well as an increase in demand for premium, the rise in the popularity of local and craft products is also on Ireland’s radar. This too, he adds, won’t stop consumers looking for entry-level products.

“I do still think there is a lot of room in the market for premium and craft to grow and we need to make sure we anticipate this,” he explains.

“As a business we need to make sure that we have our external radar on at all times to ensure we’re looking at consumers, customers and trends and that we’re also innovating and shaping our portfolio towards in a really agile way.”

My favourite pub:

I live in Putney [south-west London] and there’s a pub just by the river called the Boat House and I will pop into it every now and then.

But, I suppose my favourite pub in the UK would be the Shoulder of Mutton in Heworth, North Yorkshire, where I have a house and it’s a couple of hundred yards away.

They do fantastic Guinness and the landlord is a Chelsea fan like me. It shows sport and it’s committed to quality of serve of product and great food.

“But I think that while the world, you could argue, is premiumising, it’s not a total flip from one to the other. There are always very cost-conscious consumers who will make their choices based on price rather than other factors.”

A recent prediction by digital agency Kerve that consumers will shun global brands, such as Diageo, was equally shunned by Ireland, who says: “If you look outside alcohol beverages, I couldn’t really see a time where car brands will be locally manufactured and where we all look for locally made mobile phones.” You’ve got to give it to Ireland, he makes a valid point.

However, just because Diageo is a global business and focuses on big brands, that doesn’t mean Ireland is overlooking the undeniable rise of local and craft. For instance, last year Diageo invested in the first non-alcoholic spirit brand Seedlip, which is made by a small independent firm.

This decision to invest in an upstart brand isn’t a one-off either, there is a whole segment of the company (Distill Ventures) dedicated to pumping money into small companies that could ultimately benefit Diageo.

“There’s the possibility we will create something more significant for us and for the brand we invest in,” Ireland explains. “We get some good learnings from it too, because these guys behind the brands are very entrepreneurial and agile, and think about consumers in a very different way.”

The obvious question to ask is who or what will Diageo be looking to open its wallet for next. The spirits boss claims he isn’t at liberty to divulge such commercially sensitive information, but he does give a little clue as to what Diageo is likely to invest in next. “I am a bit reluctant to get too specific, however, if you look around the UK and the wider market, there are hot areas that you might think ‘well, it would probably be logical for Diageo to look into that’. Well, if you think it’s logical, then we probably do too.”

That’s all he is giving away on the investment front, when prompted further on whether it could be gin distilleries or craft brewers, he adds: “If you think it’s logical, then it probably is logical to us as well.”

A massive fan of the stout

An area Ireland is able to give more detail on is his not-so-secret passion, Guinness. To say the man has an obsession with the brand and product would be an understatement. He was a massive fan of the stout even before he worked for Diageo and the chance to work on it when he first moved into the company sealed the deal for his future here.

“When I was working outside of alcohol it was a brand that was already my favourite and one I would enjoy with friends after football training and while watching sports.” To this day, he still loves a Guinness and mentions his local serves a great pint of it.

Ireland plans to make Guinness bigger than it already is, explaining that pushing the brand was a big focus for him in his EABL and other roles. Current advertising around the Six Nations rugby has already paid off and resulted in double-digit growth after the first match of the season.

In the past few months alone, the brand has seen total growth of 6%. He really wants to see more traction, though. In London, one in every 10 pints sold is Guinness and he desperately wants that trend to reach beyond London and also to see London sales rise to one in every eight.

It’s not just the standard pint of Guinness he is interested in. Ireland is very excited about the future of Dublin’s Open Gate Brewery Project, which produces the likes of Hop House 13.

“We’ve launched a number of variants from the Open Gate Brewery and some of those will be around for years to come and others will be short-lived, liven up the market and rotate.”

One of the niche beers – most likely a brew set to “liven up the market” – will be Botanical Ale, which Ireland says is one of his “absolute favourites”. However, it is still in the testing phase and not ready to be scaled up to mass production. “It’s just a recipe the brewers there have been working on that has a really nice flavour profile and creates a really enjoyable pint.”

As for the future, Ireland is making inroads to work with the on-trade more to get the company’s “great serve, great taste” message out there further. He wants to see more pubs serving mixed drinks and cocktails to perfection because he views it as a very “profitable opportunity” for businesses.

Diageo’s Bar Academy has already trained thousands of on-trade staff to create “perfect cocktails” but he wants to scale that up over the coming years by pumping more investment into the scheme.

Though many operators will be able to serve cocktails, he agrees, others won’t have the capacity, staff or necessarily the desire to do so, whether or not their punters would like the option. Diageo is looking into solutions to this and when asked about pre-batched cocktails, he does not deny it is a viable option and adds: “It’s an area that needs to be carefully looked at.

Not withstanding, there is still work to be done to help those outlets that already have the capacity to make cocktails and to help them do it better.”

Part of helping operators do it better will see Diageo working closely with them and also using them to perfect the spirit giant’s products too. For instance, Ireland wants to see publicans help Diageo with launches by getting their feedback on them. He wants to push new products into sites to see how they sell, possibly on an exclusive basis at first, before rolling them out to the wider trade if they work.

As he said at the start, there is a lot of work to be done and for all Ireland has a breezy demeanour, you can tell he is itching to make a mark on the empire he is heading.

He says: “If I can leave the brands in better shape and leave Guinness in even better shape than it is now, I would be very happy.”

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