Why Americans are ditching American beer

For years, domestic beers have been losing popularity with US consumers, while wine and liquor sales rise. CNNMoney's Paul La Monica explains why interest in American beers may be falling flat.

Posted: Jun 29, 2018 9:21 AM
Updated: Jun 29, 2018 9:49 AM

Guinness is opening a brewery in the US for the first time in more than 60 years, hoping to drum up sales and woo younger consumers.

Guinness, owned by Diageo, will open the $80 million brewery near Baltimore on August 3. It will be the first Guinness brewery in the US since 1954, featuring a 270-seat restaurant and a tap room in a former distillery, according to the company.

"The USA is probably the most dynamic and exciting beer market in the world right now, and, put simply, we'd like to be closer to the action," said Guinness on its web site. "Having a brewery in the USA will help us understand and respond to trends more quickly, as well as brew smaller batches and get them to market faster."

Guinness, established in Dublin in 1759, is an Irish brewer known for its dark-hued stout. But sales have stagnated in the US in recent years as craft beers from smaller breweries have become more popular. In addition to its famous stout, the new Guinness brewery is offering India Pale Ale as well as wheat beers, lagers and more experimental brews with names like Guava Wit and Cherry Stout.

Robert Edward Ottenstein, a beverage industry analyst for Evercore ISI, said this is Guinness' way of reaching out to younger people who might not even be aware of the iconic Irish brand.

"This is all about brand building. This is a way to make it relevant to the so-called millennials," Ottenstein said.

He said it's a necessary move for Guinness because establishing brands has never been tougher. "Consumers are very skeptical," he said.

Related: Beer is being rationed in the UK

The Guinness Open Gate Brewery & Barrel House is located on a 62-acre plot in the town of Relay on the outskirts of Baltimore. Diageo bought the site in 2001, when it acquired Seagram.

Not all of the Guinness beer sold at the brewery will be brewed there. The company said its "iconic stouts" will be imported from Ireland. The company said its Guinness Blonde American Lager is "currently brewed under contract" by City Brewing in Latrobe, Pennsylvania, but production will be shifted to the new brewery in Maryland.

The brewery is expected to create 160 jobs. The job openings listed on the web site include brewer, bartender, chef and various management positions.

Guinness has five other breweries. There's the original one in Dublin, as well as one in Malaysia, and three in Africa, which is the hottest market for Guinness

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