Come new year, and Diageo, the UK-based alcohol giant, will toast the arrival of Sir Dave Lewis, its new CEO. After the abrupt departure of Debra Crew in July, Diageo board members looked for the rare candidate who could revive the maker of Guinness beer, Johnnie Walker whisky, Don Julio tequila, Smirnoff vodka, Baileys Irish Cream—all in all, more than 200 brands sold in 180 countries.
Wall Street investors applauded Lewis’s choice when they heard the news last month. Overnight, the stock-market value of Diageo increased by £2 billion (about $2.62 billion).
Investors love the consumer-packaged goods veteran, nicknamed “Drastic Dave” who spent almost three decades at Unilever. They anticipate this turnaround expert will once again strike gold, as he did at Unilever and later at grocer Tesco.
Tall Order: Debt, Drug Trends, and a Post-Pandemic Hangover
Lewis, 60, knows he will face what he calls “some headwinds.” Diageo suffers from a high debt level—$22 billion at the end of June—and declining sales. After Covid-19 boosted alcohol sales, consumers’ tastes evolved. The rise of weight-loss drugs threatens alcohol sales. Inflation doesn’t help, and the US and Chinese markets are beginning to falter. But Lewis sees “significant opportunities” ahead.
The new CEO, who is quitting his post as chair of Haleon, the multinational consumer healthcare company that makes Sensodyne, is known for cost-cutting and innovative marketing. At Unilever, he is remembered for slashing jobs and initiating a bold ad campaign for the personal care brand Dove, featuring everyday women rather than models.
In 2014, he became Tesco’s CEO. At the time, an accounting scandal that had overestimated its profits by £250 million plagued the company. Lewis didn’t hesitate. He cut thousands of jobs, simplified product ranges, lowered prices, and reduced Tesco’s international ambitions. The supermarket chain was saved, and its CEO was knighted in 2021.
What will be his cocktail of remedies for Diageo? Professionals are already speculating: revive sales talks for popular Guinness, or get rid of smaller regional brands, such as Chinese Baijiu or Brazilian Ypioca Cachaca? Investors are awaiting what Drastic Dave’s new year’s resolutions will be.
