Drinks Giant Turns to Retail Veteran
Diageo, the company behind global brands like Guinness and Johnnie Walker, has announced the appointment of Sir Dave Lewis as its new chief executive officer. The former Tesco boss is set to take the helm on 1 January 2025, stepping into a role that has been filled on an interim basis since the sudden departure of Debra Crew in July.
Sir Dave will be replacing Nik Jhangiani, the group's Chief Financial Officer, who has been acting as interim CEO. Upon Sir Dave's commencement, Mr Jhangiani will revert to his permanent position as CFO.
A Leader for Challenging Times
This leadership change comes at a critical juncture for the FTSE 100-listed drinks conglomerate. The company is currently grappling with a significant downturn, characterised by weaker consumer demand in crucial markets like China and the United States. This has led to a warning that the company may sell fewer drinks this year, a forecast that has further depressed its share price.
Diageo's stock has been severely impacted, losing a fifth of its value in the last six months and nearly halving over the past two years. The company's performance had already shown signs of strain, with sales dropping in the 2023-24 financial year for the first time in nearly four years, partly due to a weaker performance in Latin America.
Sir Dave Lewis brings a wealth of experience to the table, having led Tesco as Group Chief Executive for six years until 2020. Prior to his tenure at the supermarket giant, he spent nearly three decades at Unilever, the parent company of brands like Ben & Jerry's and Marmite, giving him extensive expertise in building and marketing world-leading consumer brands.
Charting a New Course
To prepare for his new role, Sir Dave will resign as chairman of the consumer healthcare firm Haleon at the end of December. His compensation package at Diageo will include an annual salary of £1.5 million, plus £210,000 in pension contributions, alongside performance-related bonuses.
Sir John Manzoni, Chairman of Diageo, expressed strong confidence in the appointment. He stated that after a thorough global search, the board unanimously believed Sir Dave possessed the necessary CEO experience and proven leadership skills to guide Diageo through its current challenges.
"We are confident that Dave will work with the team to take Diageo into its next successful chapter," Sir John said.
Echoing this sentiment, Sir Dave Lewis acknowledged the market headwinds but also highlighted significant opportunities. "I look forward to working with the team to face these challenges and realise some of the opportunities in a way which creates shareholder value," he commented.
The task ahead is substantial. Before her abrupt resignation after just a two-year tenure, former CEO Debra Crew had initiated a major cost-cutting plan aimed at saving $500 million (£380 million). This was in response to trading pressures and a $150 million (£114 million) annual impact from higher US tariffs. Sir Dave Lewis's success will be measured by his ability to steer the company back to growth in this evolving consumer environment.
