Dave Lewis, the new chief executive of Diageo, has outlined plans to overhaul the alcoholic-drinks giant after several years of falling profits. The maker of Guinness and Johnnie Walker reported a 2% decline in organic revenue for the year to 30 June 2026, while operating profits dropped 27% to $3.2 billion.
Lewis said savings would come from 'redesigning Diageo's operating model and overhauling its supply chain', with the elimination of what he called 'massive duplication'. He also promised to boost growth by taking Guinness global, investing in affordable brands such as Smirnoff and Captain Morgan, and offering smaller, cheaper bottles to 'inflation-weary US drinkers'.
Commentators have noted the plan goes beyond simply selling off brands, with a 'speeded-up savings target of $1 billion'. Lewis is expected to try to repeat his success at Tesco, where he repaired supply chains and supplier relationships.
However, some analysts warn that growth may be hard to achieve. In North America, Diageo's largest market, sales fell 8.4% in the year to 30 June. There is also concern that Americans may be drinking less, which could represent a structural decline rather than a price issue.