Drinks conglomerate Diageo, the maker of Guinness, Johnnie Walker, and Smirnoff, has appointed Sir Dave Lewis, the former chief executive of Tesco, to lead the company as it struggles with falling sales and a decade-low share price. Lewis will officially take over on 1 January, replacing interim chief executive and chief financial officer Nik Jhangiani, who has served in the role since Debra Crew’s resignation in July.
The announcement on Monday lifted Diageo’s stock by 7% in early trading, reflecting investor optimism over Lewis’s appointment. The company said his “extensive chief executive experience and proven leadership skills” made him the right candidate to guide Diageo through a challenging period.
“The market faces some headwinds but there are also significant opportunities,” Lewis said in a statement. “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.”
Lewis led Tesco for six years until 2020, overseeing the supermarket chain’s recovery from a major accounting scandal and reshaping its operations for profitability. Before that, he spent nearly three decades at Unilever, earning the nickname “Drastic Dave” for his willingness to make bold decisions and act swiftly to stabilize struggling businesses. He currently serves as chairman of healthcare company Haleon but will step down from that role to join Diageo.
The drinks giant, valued at around £60 billion, has seen profits and sales slide despite continued strength in Guinness. Its operating profits fell 28% year-over-year to £3.2 billion for the period ending June 2024, while net sales dipped 0.1%. The company warned last week that sales growth for the coming year would likely be “flat to slightly down,” citing weaker demand in the U.S. and China, two of its largest markets.
Economic pressure on consumers, driven by rising inflation, has curtailed spending on eating and drinking out, while younger generations’ changing drinking habits have compounded the decline. Analysts say the company faces a complex task in reigniting growth across its global portfolio of spirits, beer, and ready-to-drink products.
“Dave Lewis needs to put Diageo back on track quickly,” said Dan Coatsworth, head of markets at AJ Bell. “His style is to listen closely to customers and suppliers and work out what’s gone wrong. The focus will be on repair work, not long-term growth.”
Coatsworth added that Lewis’s approach at Tesco—stabilizing the business before departing—might mirror his strategy at Diageo.
The company’s board acknowledged that 2024 had been “a challenging year,” with “pressure on consumers” across its key regions. It said that while Guinness remains a bright spot, the broader spirits portfolio has underperformed amid shifting consumption trends.
Lewis’s appointment signals Diageo’s intent to restore momentum through operational discipline and strategic repositioning, as the global drinks industry faces evolving tastes and tighter household budgets.
Featured image credits: Flickr
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