Investors in Diageo, the FTSE 100 behemoth behind brands like Guinness and Johnnie Walker, expressed significant relief as the company announced its new chief executive officer. The board has appointed Sir Dave Lewis, a veteran of the retail and consumer goods sector, to the top role, effective from 1 January 2026.
The market reaction was immediate and positive. Following the news, Diageo's share price climbed 7.5 per cent in morning trading, reaching 1,856 pence. This surge helped the stock rebound from a sharp decline experienced just the previous Thursday after a disappointing trading update.
The Board confirmed Sir Dave will take on the dual role of chief executive and executive director. Sir John Manzioni, Diageo’s Chair, stated the decision was unanimous, citing Lewis's "outstanding track record" and his proven ability in building and marketing world-leading brands.
Who is 'Drastic Dave'? The Turnaround Specialist
So, who is the man tasked with steering Diageo back to steady growth? Sir Dave Lewis, knighted in 2021 for his services to the food industry, is best known for his dramatic rescue of supermarket giant Tesco.
He took the helm in 2014 when the retailer was in crisis. Billions had been wiped from its value due to a failed growth strategy, a major accounting scandal, and the fallout from the horsemeat controversy. Furthermore, Tesco was struggling to compete with the rising threat of discounters Aldi and Lidl.
Despite having no prior retail experience, Lewis engineered a remarkable recovery. He focused on three key areas:
- Improving customer service
- Repairing strained supplier relationships
- Engaging with disgruntled employees
His strategy yielded impressive results. By the time he left in 2020, he had halved Tesco's debt by £22bn and the share price had grown by 67.8 per cent.
His nickname, 'Drastic Dave', however, originates from his three-decade tenure at Unilever. There, he was known for aggressive cost-cutting, slashing the number of products from 1,600 to 400 and significantly reducing headcount. These actions led to a staggering 40 per cent reduction in group expenditure in 2007.
Market Reaction: Praise and Potential Pitfalls
Analysts have largely praised the appointment, with many seeing Lewis as a "Mr Fixit" for the drinks giant. Dan Coatsworth, head of markets at AJ Bell, remarked that if Sir Dave can "pull off a second business recovery of this scale he’ll become a legend in the business world." He called the hire "significant" and a "pleasant surprise," noting the share price jump says it all.
However, some voices have sounded a note of caution. The primary concern is Lewis's lack of direct experience in the spirits industry. Chris Beckett, a consumer staples analyst at Quilter Cheviot, described the move as "interesting," pointing out that Lewis's background is in mainstream fast-moving consumer goods, not the high-end, aspirational spirit market where bottles can cost hundreds of dollars.
Beckett acknowledged it was a "good appointment" overall but stated it "raises a few new risks" that promoting from within the existing interim leadership team would have avoided. The key challenge for Lewis will be to quickly get to grips with Diageo's complex distribution model, particularly in the critical US market.
