The owner of Guinness and Johnnie Walker has turned to a veteran of the UK retail sector to steer its fightback, appointing former Tesco boss Sir Dave Lewis as its new chief executive.
A New Leader for a Challenging Time
The world's largest spirits maker, Diageo, confirmed that Sir Dave Lewis will assume the role in January. This decision follows a board search that began in July, when the previous CEO, Debra Crew, was effectively ousted after just two years in charge.
The company's share price suffered a dramatic 40% fall during Crew's tenure. The decline was driven by a perfect storm of industry challenges, including a drastic drop in at-home drinking after the COVID pandemic and the impact of the US trade war.
Investors perceived Crew's planned recovery strategy as insufficient to address the scale of the problems.
The 'Drastic Dave' Track Record
Sir Dave Lewis brings a formidable reputation for corporate turnarounds. He is best known for leading a successful six-year recovery of Tesco, the UK's biggest retailer, starting in 2014.
His nickname, 'Drastic Dave', was earned during his earlier career at consumer goods behemoth Unilever, where he was credited with achieving significant success through rigorous cost-cutting and highly targeted marketing campaigns.
Despite the overall downturn, Diageo's market positions have held up better than some of its rivals. However, its shares are still languishing near decade-long lows. The situation was underscored just last week when the company was forced to downgrade its sales and profit outlook for the coming year.
Market Reaction and Analyst Outlook
The announcement of Lewis's appointment was met with immediate market approval, sending Diageo shares up by 7%.
Diageo chair John Manzoni told investors: "The Board unanimously felt that Dave has both the extensive CEO experience, and the proven leadership skills in building and marketing world-leading brands, that is right for Diageo at this time."
In response to his new role, Sir Dave said: "Diageo is a world leading business with a portfolio of very strong brands, and I am delighted to be joining the team. The market faces some headwinds but there are also significant opportunities."
Analysts offered a measured perspective. Matt Britzman, a senior equity analyst at Hargreaves Lansdown, noted: "Lewis brings deep experience in consumer brands from his time leading Tesco and decades at Unilever, though he lacks direct exposure to the spirits industry. Investors may welcome his strong marketing pedigree, but any major strategic reset will take time."
