DGE Diageo Plc

By Saabira Chaudhuri 

Diageo PLC is opening a Guinness brewery in the U.S. that will make variants of the flagship beer brand specifically for American palates, but won't brew the flagship stout.

The company plans to build a midsize Guinness brewery and visitor center in Maryland that mimics its flagship Dublin brewery and visitor's center, which the company touts as Ireland's most popular tourist attraction.

The bulk of Guinness beers drunk in the U.S. is imported, though the Guinness Blonde type is currently made in the U.S. by a third-party brewer for Diageo. With the new brewery, Diageo will shift production to the U.S. of other Guinness variants, like Hop House 13 lager. The classic Guinness Stouts will continue to be brewed in Dublin.

Last week Diageo reported its North America organic sales for the six months to Dec. 31 rose 3% from a year earlier, a sharp improvement from previous figures. But the company has struggled to make a success of beer in the U.S., reporting volumes declined 3% and net sales fell 1% for the period.

Part of the problem is that mainstream beer has been losing share in the U.S. to cocktails and craft beer brands. But at least part is that many Americans haven't taken to the classic Guinness stout.

Diageo has worked to offset sales declines, in 2014 launching Guinness Blonde American Lager, which uses American hops and malts with Guinness yeast. It's also invested in advertising campaigns to highlight the brand's long brewing history in an attempt to compete with craft beer brands.

The company didn't detail what sorts of new variants it could launch for the U.S. going forward. It has launched several new beers under the Guinness brand, although these aren't specifically intended for American drinkers, including Guinness Nitro IPA, Hop House 13 and Guinness Dublin Porter.

Diageo estimates 70 new jobs could be created in Maryland for brewing, warehousing and packing, and said the visitor experience could create 30 jobs.

Guinness was first imported to the U.S. almost 200 years ago and the country remains one of Guinness's biggest markets.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

(END) Dow Jones Newswires

January 31, 2017 13:41 ET (18:41 GMT)

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