Diageo (DGE.L) appointed former Tesco (TSCO.L) boss Dave Lewis as its CEO on Monday, ending a months-long search and turning to an outsider to revive growth at the world's largest spirits maker during a challenging period for the drinks industry.
Lewis, 60, will join Diageo at the start of 2026 and will be tasked with turning around the Johnnie Walker whisky and Guinness beer maker, which last week downgraded its sales and profit outlook for fiscal 2026 and whose shares are hovering near a decade low.
Shares in the drinks group, which also makes Don Julio tequila, jumped 7% on news of Lewis' appointment on Monday and were headed for their biggest one-day percentage gain since November 2020.
Lewis was CEO of UK supermarket group Tesco (TSCO.L) from 2014 to 2020 and prior to that spent three decades at Unilever (ULVR.L), where he earned the nickname "Drastic Dave" after fixing businesses through cost-cutting and innovative marketing.
A PLEASANT SURPRISE
Lewis left Tesco after transforming the UK's largest supermarket group and reinforcing its position as the clear market leader. During his six years at Tesco, he sold off some businesses and retreated from lofty global ambitions.
"We think this is a good move," RBC Capital Markets analyst James Edwardes Jones said in a note, calling Lewis' appointment a "pleasant surprise".
"We came across Dave when he was at Unilever... and were impressed; our retail team has a good opinion of him too," Edwardes Jones said.
Some investors had previously expected that Nik Jhangiani would become the permanent CEO, having been regarded as potential CEO material for a while.
But Diageo said on Monday that Jhangiani, who has served as interim CEO since July following Debra Crew's abrupt departure, will resume as finance chief next year.
RIGHT FOR DIAGEO AT THIS TIME
Crew took over in June 2023 after the sudden death of predecessor Ivan Menezes, who had presided over a period of extraordinary growth for the industry as drinkers splurged on spirits after the COVID-19 pandemic.
Crew, however, failed to win over investors as Diageo has struggled to revive growth in key markets like the U.S. amid a drop in alcohol consumption from pandemic levels. It is also dealing with elevated debt levels.
"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," Diageo Chair John Manzoni said in a statement.
Lewis, who served a brief stint as the UK government's supply chain adviser during the pandemic, was knighted in 2021 and is currently chair of consumer healthcare group Haleon (HLN.L). He will step down as Haleon chair at the end of the year.
Deirdre Mahlan, who was appointed interim finance chief in August, will continue to support the company through the transition, Diageo said.
