Global beverage alcohol company Diageo PLC is dropping Guinness from the name of its U.S. beer business. The company is going to change from Diageo-Guinness USA (DGUSA) to Diageo Beer Company USA. Following several months of strategy work to help best position the company’s U.S. beer business for the future, it was decided that the group’s name should convey Diageo’s brewing credentials and commitment to the broad category of premium beer.
Diageo, which is the world’s largest spirits maker, plans to ramp up investments in Irish beers Smithwick and Harp, which have struggled in the U.S., resulting in falling beer sales last year.
In the U.S., the company has historically plowed its money into Guinness and “alcopop” Smirnoff ice, which make up the bulk of its American business. On Friday,the company’s rep said it has “a deep innovation pipeline for beer and flavored malt beverages” including creating a new alcoholic soda line and launching a Smirnoff spiked seltzer.
Beer makes up about 20% of Diageo’s global sales but is its biggest business in Africa, where it sees the drink as a means to promote its spirits brands.
The moves in the U.S. come as beer has been losing ground to liquor and wine and as beer companies such as AB InBev NV and MillersCoors LLC have responded by expanding into alcoholic soda. Global beer head, Mark Sandys, last year noted that growth is expected to come from Africa and Asia, while the U.S. and other mature markets will be flat.
“This change truly represents a culture and mindset shift for The company’s U.S. beer business,” said Tom Day, president of the newly named Diageo unit. He said
Diageo was responding to interest from U.S. consumers in “experimenting with new styles and brands.”