Shares jump for major spirits company after ‘Drastic Dave’ named new CEO
AI-generated summary reviewed by our newsroom.
- Diageo names Dave Lewis as CEO in January to drive cost cuts and brand focus
- Shares tick up after Lewis hire, but Diageo remains down over 25% year-to-date
- Company plans $625M cuts and cites weaker US/China sales plus $150M tariff hit
A major spirits company announced a new CEO on Monday after a four-month hiatus.
UK-based Diageo, parent of Bulleit bourbon, Guinness beer, Johnnie Walker whisky, Baileys Irish Cream liqueur and more, named a former consumer-industry veteran to take the helm, which had been in the hands of an interim CEO since July.
Dave Lewis was CEO of British grocer Tesco and, according to published reports, was known as “Drastic Dave” for his cost-cutting reputation. Before his stint at Tesco, Lewis spent nearly 30 years at Unilever.
Under interim CEO Nik Jhangiani, the finance chief, Diageo had already announced plans to cut $625 million over the next three years. Jhangiani will return to the CFO position when Lewis takes over as CEO in January.
Diageo shares halt slide
The company’s shares rebounded on the news, but there is a lot of ground to make up: Year-to-day, Diageo’s share price has lost more than 25% of its value. Shares hit a 10-year low last week.
Last week Diageo shares dropped after the company slashed its full-year guidance based on weaker sales in the U.S. and in China.
Like many spirits companies, Diageo has been grappling with declines as consumers have pulled back significantly on alcohol purchases. The company also said it faces a $150 million hit from higher U.S. tariffs.
“We are delighted to welcome Dave as Diageo’s new CEO. Having conducted an extensive and thorough global search, 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,” said Diageo board chair John Manzoni in a statement in the announcement.
“We are confident that Dave will work with the team to take Diageo into its next successful chapter in the evolving consumer environment. The Board wishes to recognize and thank Nik Jhangiani for his excellent leadership as Interim CEO and for continuing to drive forward Diageo’s sharpened strategy.”
What does this mean for Bulleit bourbon, Kentucky plants?
It’s unclear what the new CEO might mean for Kentucky and Bulleit. In August, Diageo reported that sales of the premium bourbon were down last year 7.3%.
Earlier this year Diageo, the parent of Bulleit and Blade & Bow bourbons, decided to consolidate their bottling operations and close the line at the historic Stitzel-Weller Distillery in Louisville and lay off about 33 people.
“We have made the difficult decision to consolidate the site’s bottling operations within other U.S. Diageo facilities,” Diageo officials said in a statement. “This decision is part of a broader multi-year program to strengthen Diageo’s supply chain by improving productivity, resilience and agility. As such, over the next 2-3 years we will also be shifting the majority of maturing and warehousing operations from Stitzel-Weller to Diageo’s other Kentucky facilities in Shelbyville and Lebanon.”
The company also halted production at the Lebanon distillery for several months earlier this year.
