- Guinness Anchor Bhd recently revealed a new bottle design for its Guinness Foreign Extra Stout (GFES). The new look will be for the GFES pint and quart bottles as well as the 500ml and 320ml cans and retains the distinctive Dog’s head - a Guinness Malaysia icon - on the neck label.

- GFES, together with Tiger, Heineken and Anchor are among the brewer’s most iconic brands. The label dominates the domestic stout market with a ~90% market share - in line with the brand’s position as the world’s most recognised stout. The GFES is the key Guinness variant in the Caribbean, Africa and Asia.

- This makeover is Guinness’ first major package redesign in nearly a decade. Back in 2004, the group had the privilege of being the first country in the world to launch a new GFES bottle. In 2007/08, the group tweaked its bottle design and introduced a new taste for GFES which is smoother, fuller and has a downgraded ABV of 6.8%. The characteristic roasted, bittersweet taste and Guinness aroma was left unchanged. This revamp helped resuscitate GAB’s stout segment which grew by 8% YoY in 1HFY09 after a 10-year volume decline.

- The contemporary design with new livery was no doubt done to further underline Guinness’ premium value and confer greater visibility for the brand in the increasingly crowded premium segment of the domestic malt liquor market. In addition, it will help raise Guinness’, and GAB’s, appeal among the younger generation of drinkers.

- In conjunction with the change, the group also unveiled a new advertising tagline: “Discover a World of More”. Marketing events and campaigns for this Guinness line (i.e. St Patrick’s Day in March and Arthur’s Day in September) are focuses on the stout’s rich heritage, as it is in its 254^th year. The global theme for Guinness is “Made of More”.

- We maintain our earnings forecasts and SELL rating on GAB with an unchanged fair value of RM14.90/share.

- Heavy spending by the group in the premium segment (introduction of new premium brands and new Heineken bottle design in FY13) may be untimely given that consumers are now tightening their purse strings (YoY, 1QFY14 revenue : -17%; net profit: -13%). That said, the premium line may still capture Gen Y drinkers who are less price sensitive and more image-conscious, ensuring the group retains its top spot position with ~60% market share. 

Source: AmeSecurities