Why there is strong optimism at Diageo

“It’s about the mindset that you have and how you frame or reframe the situation,” he says. “I would see that it’s an opportunity to come out of this stronger, and yes, there’s a little bit of ‘well, we just came out of an unprecedented set of circumstances stronger, and here we are right in another set of unprecedented circumstances.’

“I think it’s great that we’re able to just step back, have that longer-term perspective and reframe this as an opportunity from which we can really emerge stronger as a company.”

O’Sullivan took over the top position at Diageo in Ireland last year, joining the owner of Guinness and Baileys from the Mars Group. Having lived in Australia for five years with his wife and two daughters, getting home at a time of limited international travel has been challenging.

“We just decided to use our time slot at the end of February (2021) so that something else doesn’t happen and surprise us and we might not be able to travel.”

He has witnessed firsthand the ebb and flow of the pandemic restrictions affecting the drinks trade in Ireland and is of course delighted that pubs are now fully open again despite concerns about rising Covid case numbers.

While people seem keen to return to personal hospitality in droves, other challenges are emerging. “We haven’t fully recovered yet, trading hasn’t fully recovered yet, but it’s definitely in full swing and we’re very, very optimistic about where we’re going and where we are.

“I think we’ve had a pretty strong recovery so far, but there’s still work to be done and I think even some of the biggest challenges we’re facing right now are staffing and training. When you talk to our customers in retail, it is a real challenge to attract staff, train staff and retain staff.”

Diageo is doing its part, he says. He cites the example of the Learning for Life programme, a partnership with TU Dublin which offers a five-week course to develop the skills for working in hospitality and tourism.

As for the long term effects of Covid have all pubs recovered? “There’s a very small number that haven’t reopened and of course there’s always concern as to how many of those will or won’t open in the fullness of time when things have really settled down, but it’s a fairly small number” , he says.

“Publicists who have really focused on what they have to offer, the great outdoor spaces, or whether they’re focusing on the addition of food or music, they’re doing very well. So, I think those kinds of trends are going to continue.”

He adds that general alcohol consumption in Ireland has fallen, which is something the beverage industry points to when discussions about Ireland’s relationship with alcohol arise.

“This has nothing to do specifically with the pandemic or Covid. I would say there is a steady trend that probably goes back to the peak of alcohol consumption, which was around 2000/2001, so consumption today is about 30 percent below that peak.”

He says drinkers are now going for quality over quantity, which could be good for Guinness.

“Guinness at the heart of the pub and the pub at the heart of Irish conviviality but I think the appetite is definitely there. The other thing we see is definitely an appetite for choice and variety on different occasions.

“We are definitely seeing the rise of low-alcohol and even non-alcohol products. Guinness 0.0 was an outstanding success,
and it just makes sense that depending on the occasion, it’s great to have this alternative with the great taste and quality you’re used to from a pint of Guinness, but actually without the alcohol.”

When the non-alcoholic Guinness product was launched, it caused some amusement as commentators went back to the failed launch of Guinness Light in the 1970s.

But it looks like Diageo will have the last laugh. “We have just received planning permission for an expansion of the beer processing facility and this will essentially double the capacity we have at James’s Gate for Guinness 0.0. It’s taken a long time, but it’s been a phenomenal success, so we’re working hard to keep up with the demand.”

Is it a product with international potential? “That would be the plan,” he says. “But we are currently very focused on meeting demand in the Irish market.”

O’Sullivan’s parents are both from Waterford, although he and his two older brothers grew up in north Dublin. He studied art at UCD and was drawn to business.

“My father was always in business and I was coming home from college one day and he had just circled an advert in the newspaper advertising at the time Masterfoods Ireland or Mars as they may be better known that they were doing a degree recording, and he said, “Great company. I think you should apply. And I ended up working for them for about 20 years.”

He held senior sales and marketing positions at Mars Chocolate and Mars Petcare in Ireland before moving with the company to Dubai and then becoming general manager of chocolate in Mexico. “It was an amazing experience in that way,” he says. “Latin American culture, Mexican culture is very warm, very friendly, very welcoming, probably has a lot in common with Irish culture. It’s all about relationships.”

There was a downside to a country where corruption and violence are part of life. “There were parts of the country, parts of the city, especially Mexico City, where you just had to be careful. You know things have had an impact on business and I’ve had some interesting encounters myself, but they have been limited.

“Well, I wouldn’t trade it for the world. It was a great experience for me and my family.”

After three years there, he moved to Australia in 2016 as General Manager Pet Nutrition. Although staying in Australia was tempting, he says, he and his wife Priya were keen for their teenage daughters to see an education out here, while Priya, a doctor, was keen on finding a job in Ireland as well to find a family doctor.

“For all of these reasons it was ideal that we could come back and for me it was a very special opportunity to come back and be a part of Guinness history in Ireland.”

Part of her return to Ireland was to secure her rescue dog, Lola would do it back with them.

“Actually, Lola probably faced fewer restrictions on international travel than people did when we returned from Australia – and arrived safely in Dublin the day after us,” he says.

While he knew the pandemic and its impact on pubs would be a large part of his remit, supply chain issues and inflation have unexpectedly become key issues for businesses, exacerbated by the war in Ukraine.

As customers reconnect, they are now being hit by hefty increases in the price of a pint.

“We never want to speculate on future costs or prices, and of course it’s each restaurateur’s individual decision as to what price to charge, but the reality is that costs have gone up for everyone and everyone now has bigger bills to pay,” he says .

Diageo Ireland will mitigate inflation where possible. “We will take advantage of the fact that we are part of a large global company and then continue to focus on how we can continue to drive our revenue growth, but also focus on efficiency in our operations.”

Sustainable transportation is an area the company is focused on, which can help with rising fuel costs.

“We have a high-quality fleet of almost a couple hundred vehicles on the road and we quickly converted a pilot project in Dublin to convert these vehicles into essentially all-electric, zero-emission vehicles first, but the plan would certainly be how can we do that in the introduce all over the country.”

As well as the Guinness non-alcoholic product, St James’s Gate has had a good run with new beers such as Hop House 13.

“It’s brewed here, it’s made with Irish ingredients, Irish barley, it’s a fantastic product and it’s been very well received across Europe.”

Another Irish product, Rockshore, is aimed at the domestic market but is also doing well. It is building its new whiskey brand, Roe & Co. “We definitely plan to make this a bigger offering going forward and take a bigger share of this premium Irish whiskey market,” he says.

There are competitors biting its heels, most notably Heineken with its new stout Island’s Edge, which aims to take over part of the stout category. As always, O’Sullivan is positive.

“I think the great thing about the Irish market is that it’s super competitive and it’s got to stay that way, right?

“I don’t want to talk about other people’s products, but I think in that context, Guinness is the biggest beer brand out there.”

In fact, he believes Guinness is in a good place after years of struggling in a rapidly changing drinks market.

“Guinness is a growing brand. It’s currently growing more than any other brand in terms of its value in the market.” He says that’s partly due to Guinness 0.0, but not only.

“Is it healthier now than before the pandemic? The answer is yes, it is. It is in a stronger competitive position today than it was before Covid.”

What’s your best business advice?

Be yourself, be brave, be curious. “Be yourself” might sound very obvious and straightforward, but many people, especially early in their careers, tend to fall into the trap of trying to show up and be what they think others are looking for, and that is much better for everyone if you just calm down and focus on being yourself.

You have to learn to be brave, and that essentially means not being afraid of failure. One of the things I was told early in my career was that you will learn more from your mistakes than you will from your successes.

And thirdly, be curious, listen to the voice of your customers, listen to the voice of your colleagues.