Troubled Drinks Giant Turns to Retail Veteran
In a strategic move to reverse its fortunes, Diageo, the FTSE 100 beverages behemoth behind iconic brands like Guinness and Johnnie Walker whisky, has named retail veteran Sir Dave Lewis as its new Chief Executive Officer. Lewis, who is widely credited with steering Tesco through its most severe financial crisis, will officially take the helm on 1 January.
This appointment represents a significant coup for the company, which has seen its share price plummet by a third this year amid a series of operational and market challenges.
A Track Record of Corporate Rescue
Sir Dave Lewis brings a formidable reputation for corporate turnarounds to Diageo. He led Britain's largest supermarket, Tesco, from 2014 to 2020, where he successfully navigated the aftermath of a major accounting scandal that had threatened the very existence of the business.
His strategy involved a back-to-basics approach, focusing on price competitiveness against rivals like Aldi and Lidl. During his five-year tenure, he dramatically reduced Tesco's £22 billion debt pile and streamlined operations by closing unprofitable divisions.
Prior to his time at Tesco, Lewis spent nearly three decades at consumer goods giant Unilever, the owner of brands like Marmite, giving him deep experience in building and marketing global consumer brands.
He replaces Debra Crew, whose tenure as Diageo CEO was rocky and cut short in July. Investor dissatisfaction had been growing over the company's lacklustre performance, leading to her departure.
The Scale of the Challenge at Diageo
Lewis inherits a company facing significant headwinds. After a post-pandemic rebound in alcohol consumption, Diageo issued a shock profit warning in 2023 and was forced to abandon a long-standing sales target in February of this year.
The company's struggles have been multifaceted:
- Supply chain issues led to Guinness being rationed in UK pubs during the crucial festive period last Christmas.
- A major misjudgement of waning demand in Latin America left the company overstocked in the region.
- The business has also been impacted by US trade tariffs implemented during the Donald Trump administration.
Most recently, the company issued another profit warning, stating it expects 2026 sales to be flat or slightly lower, underscoring the urgency for a new strategic direction.
Sir John Manzoni, Diageo’s chair, who led the board's succession process, expressed strong confidence in the new appointment. He stated that after an extensive global search, the board unanimously agreed that Lewis possesses the "extensive CEO experience, and the proven leadership skills in building and marketing world-leading brands, that is right for Diageo at this time."
Lewis himself acknowledged the challenges but remained optimistic, saying, "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."
In preparation for his new role, Lewis will step down as chair of the consumer health business Haleon on 31 December. He will be succeeded in that role by Vindi Banga, a former Unilever colleague.
