New leader takes the helm at Diageo
The world’s largest drinks producer, Diageo, has appointed former Tesco chief Sir Dave Lewis as its new chief executive. He will take charge of the Guinness maker on 1 January, following the summer resignation of Debra Crew after two years in the role. The company hopes he can reverse its declining sales and restore investor confidence. Despite Guinness performing well, Diageo has struggled with weaker sales across its portfolio, pushing its shares to a 10-year low. Investors reacted positively to the news, with shares jumping 7% in early trading on Monday.
Diageo faces pressure in major markets
Diageo owns iconic brands such as Johnnie Walker whisky, Smirnoff vodka and Captain Morgan rum. However, the company has faced falling sales in key regions, especially the United States and China. Sir Dave, who led Tesco for six years until 2020, previously spent nearly three decades at consumer goods powerhouse Unilever. He currently chairs health firm Haleon but will step down to focus on Diageo. The board praised Sir Dave’s leadership experience and described him as “the right choice for Diageo at this time.”
‘Drastic Dave’ returns to turnaround mode
Sir Dave earned the nickname “Drastic Dave” for making bold and decisive changes. Known for his no-nonsense style, he said he sees both challenges and opportunities ahead. “The market faces headwinds, but there are significant opportunities too,” he said. “I look forward to working with the team to overcome challenges and deliver value for shareholders.”
Falling profits and changing habits
Diageo’s operating profits fell to £3.2 billion in the year to June, down 28% from the previous year. The firm described the period as challenging and admitted there was “clearly much more to do.” Inflation has put pressure on consumers, leading to reduced spending on dining and drinking out. At the same time, younger generations are drinking less alcohol, shifting towards healthier or non-alcoholic options.
Analysts call for quick action
Market experts say Sir Dave must act swiftly to repair Diageo’s performance. Dan Coatsworth, head of markets at AJ Bell, said, “He listens closely to customers and suppliers to identify problems. His focus will be on repair work, not long-term growth.” Coatsworth noted that Sir Dave left Tesco after stabilising the business rather than pursuing expansion. “One might expect a similar approach at Diageo,” he added.
A familiar hand on the tiller
Sir Dave will replace interim chief executive Nik Jhangiani, Diageo’s chief financial officer. Jhangiani stepped in temporarily after Debra Crew’s departure in July. With his proven record of tough decision-making, Sir Dave Lewis now faces the task of restoring momentum to one of the world’s most famous drinks companies.
