INTERVIEW/JOHN KENNEDY, DIAGEO IRELAND:DIAGEO IRELAND managing director John Kennedy smiles, allows himself a minute to think and then sportingly answers the question about which pub he'd recommend for a great pint of Guinness.
“Jack Birchalls pub on Ranelagh Road is a fabulous local pub, so I go there when I get a chance,” he says. “I’d also like to say the Palace Bar . That, to me, is a great, classic city centre pub.”
By choosing two pubs on the capital’s southside, he’s probably offended all landlords in Dublin’s northside, not to mention their rural cousins. Nevertheless, you won’t find too many people who would argue with his choices.
Like a newly pulled pint of stout left to stand on the bar before having its head applied, Kennedy is settling in nicely to his new job. He was appointed around the time the Government was generously agreeing to guarantee our banks’ deposits and loans and just before the economy fell off a cliff, taking a large number of publicans with it.
Results produced last week by Diageo show that sales of Guinness here increased by 2 per cent between July and the end of December 2008. One in three pints sold in Ireland over the Christmas period was Guinness.
They say that form is temporary but class is permanent – an adage that the famous old pint of plain is now proving. Having lost its froth to a cocktail of fancy lagers and spirits during the Celtic Tiger years, Guinness has come roaring back to regain market share in the pub trade on both sides of the Border. And this at a time when the alcohol market in Ireland is estimated to have declined by 10 per cent in 2008. “The brand is incredibly resilient,” he says. “The big message for us is that Guinness is a pillar of strength in a turbulent environment.”
This is not to say that Guinness or Diageo is immune to the recession. A planned €650 million investment in new brewing facilities in Ireland has been put on ice while a review of the ambitious plan is conducted. “I think it is the responsible thing to do ,” he says. “This is the biggest capital investment ever by Diageo and almost every single assumption that went into the project has changed in the past 12 months.”
The grand project involves building a new superbrewery on a site in Leixlip, Co Kildare, owned by Desmond Guinness, a descendent of the stout’s originator Arthur Guinness. The world-famous St James’s Gate Brewery would be upgraded and continue to serve the Irish and British markets, but its capacity would be reduced and surplus land sold to help fund the overall plan. The breweries in Dundalk and Kilkenny are due to close.
“What we are firmly committed to is having an internationally competitive beer brewing operation in Ireland,” he says. “Whatever the outcome is [of the review], we will continue to have a brewing operation in Ireland.”
Beyond that, Kennedy would not go. The review, he says, will be completed “as quickly as possible”. He would give no hint as to whether the Dundalk and/or Kilkenny breweries might be saved or whether Leixlip will, in fact, go ahead.
The deal to purchase the Guinness family lands has yet to be inked, although Kennedy says the agreement remains in place in principle. A planning application to Kildare County Council has been “paused”. Talks with its trade unions on redundancies and the new jobs in Leixlip have also been put on hold.
For many Irish people, and even most Guinness drinkers abroad, St James’s Gate is the sacred cow. Come what may, the brewery founded by Arthur Guinness must remain open. “St James’s Gate is a very important part of our heritage,” Kennedy acknowledges. “I would have a hard time believing that [whether it might close] would be a question.”
Kennedy says all other costs at the business are also under review, and the Irish business will be shedding staff as part of a global programme by Diageo, announced last week, to achieve annual cost savings of €100 million around the world.
“We’re doing our own review across the business to see where we can be more efficient, and there is likely to be a headcount reduction as part of that,” he says. “I think it’s the right thing to do. We are taking the same kind of responsible measures that every other organisation is doing right now.”
Diageo employs 2,500 people across its operations in Ireland, which extend far beyond the Guinness brewing business. It handles Carlsberg and Budweiser here, owns Smithwick’s and Harp, and numbers Bushmills whiskey and Smirnoff vodka among its spirits brands.
Kennedy would not say how many people would be let go as part of this review. For now, pay has been unaffected, and Kennedy gave no hint that a freeze or wage cuts would be sought. Other cost-cutting measures include a 90 per cent reduction in company travel and entertainment budgets.
But Kennedy assures that Diageo won’t be skimping on the celebrations that are planned to mark Guinness’s 250th anniversary. “We’re committed to making sure that 250 is special for the brand,” he says.
Diageo will be spending several million euro on the 250th celebrations, with Kennedy promising a feast of high-class events, although he wouldn’t divulge details. Perhaps I should have taken him for a few jars to oil the tongue.
You can’t fault Kennedy’s enthusiasm, especially over the 250th celebrations. “I made them get a cherry picker so I could put the 250 sign on the [main] gate. I think it caused a few problems with the insurance people but it was incredibly important to me. It’s a great time for Guinness.”
He plans to put the pub “at the centre” of the 250th celebrations and believes the recession will bring drinkers, their local pubs and Guinness closer together.
Kennedy is an amiable chap, and someone you’d be happy to have a few sociable pints with. Tall and slim, he doesn’t look like your average stout drinker.
His red hair is a nod to his Irish roots – his mother is from Charlestown, Co Mayo, and his father hails from Stoneybatter in Dublin. They emigrated to the US in the 1960s. Kennedy was raised in the Bronx, where his father ran a “gas station” – and still does. His first drink was in New York. It wasn’t Guinness, but a Johnnie Walker scotch whiskey, which his father drank. And yes, he was over 18 at the time.
His English wife, Clare, has an Irish mother, and two of his three daughters were born in the Coombe Hospital, close to St James’s Gate. “Ireland has always felt close to our heart,” he says without a hint of blarney. He hasn’t yet persuaded the Missus to drink Guinness. “I haven’t converted her. She tends to liking a glass of wine,” he admits.
He had a three-year spell with Diageo here in the mid-1990s and has worked for the company in Australia, Britain, the United States and Canada.
“I’m a New Yorker to the bone, in spite of the red hair,” he says with a smile. “I’ve got a New York streak in me – I’m ambitious, optimistic; I think the glass is half full.”
Being MD of the Irish business is his “dream job” and one that is much sought-after by ambitious executives within the drinks giant’s top ranks. “This is a very important job within Diageo. There are a lot of people who would bite your hand off to get this role. I feel incredibly lucky.”
Ireland makes up around 10 per cent of Diageo’s sales, with Guinness accounting for about half of its business here. This small country is Diageo’s fourth biggest market.
Now that he’s landed the plum role, Kennedy plans to hang around for a while. “I’d like to be here for a long stretch,” he says, adding that it is important for his children – who range in age from seven to 11 – to put down some roots.
Being the ambitious Yank, does he have his eye on landing the top Diageo job one day (currently held by Paul Walsh)? “I’m convinced this [MD in Ireland] is the best job I’ll ever have,” he says, diplomatically.
“I don’t know what comes next after this; I just want to put everything into this job. Besides, if you talk to my Mom and Dad, I’ve already got the top job.”
ON THE RECORD
Name: John Kennedy
Position:Managing director, Diageo Ireland
Age:44
Family:Married with three young daughters
Lives:Ranelagh
Hobbies: Swimming, cycling and taking part in triathlons
Something you might expect: The New Yorker is a fan of the city's famous Yankees baseball team.
Something that might surprise: His first job was as an encyclopaedia salesman in Texas. He did it for three summers during college. "I did well."
