The executive recognised for guiding Tesco through its most severe financial crisis has been named chief executive of the embattled drinks brand, Diageo. Sir David Lewis will take the helm on 1 January 2026 after a bruising time for the FTSE 100 company, which has seen its share price fall by a third since the start of the year.
After months of sliding sales, operational missteps and leadership instability, the arrival of a seasoned turnaround specialist is being hailed as a major coup for Diageo, which owns more than 200 brands including Guinness, Johnnie Walker and Smirnoff.
Lewis succeeds Debra Crew, the former US military intelligence captain who resigned in July following a turbulent two-year tenure marked by surprise downgrades, supply chain miscalculations and growing investor discontent. Shares sank to a decade low in early November, but news of Lewis’s appointment sent them up 7.5% as investors bet on a reset.
Who is “Drastic Dave”?
Lewis grew up in a South Yorkshire mining town and spent almost three decades at the consumer goods powerhouse Unilever, where he earned the nickname “Drastic Dave” for his unflinching approach to cost-cutting and operational overhauls. His interventions were bold and sometimes unpopular, but widely credited with sharpening efficiency and lifting financial performance.
Lewis then led Tesco for six years between 2014 and 2020, where he faced an even tougher test. Appointed amid an accounting scandal that wiped billions off the retailer’s value, he slashed costs, axed thousands of jobs and sold off non-core businesses in South Korea and Thailand. In six years, Lewis had stabilised and revitalised the supermarket chain.
“Lewis represents a significant shift in leadership,” says Maxime Doneux, investment analyst at Atomos, a financial adviser. “He lacks direct beverage experience, but he excels at brand-building and marketing. With portfolio simplification and cost discipline likely to top the agenda, his turnaround instincts should prove invaluable in guiding Diageo’s recovery.”
Glass half empty
Lewis’s credentials are formidable, but new leadership alone cannot resolve the structural pressures weighing on the global drinks market. History shows that shares often rise when a respected leader takes the helm, yet they can fall just as sharply if the anticipated turnaround takes longer than expected. For instance, Starbucks added $20bn (£15bn) in market value when its new CEO was announced in 2024, only to see that gain erased fifteen months later. What’s more, many of Diageo’s challenges are linked to broader industry trends beyond its control.
“Since the pandemic, the beverages sector has struggled to regain its footing,” Doneux says. “It’s unclear whether weakened demand is just a cyclical dip or evidence of a deeper, structural shift in how people drink.”
A 200-brand portfolio in 180 markets doesn’t simply disappear
For the drinks industry, these are uncertain times. Policymakers and health organisations now argue that there is no safe level of alcohol consumption. At the same time, younger consumers in particular are drinking less, citing cost and lifestyle concerns. It’s no wonder experts say the sector is experiencing a tobacco moment. And as alcohol demand has fallen, Diageo has been forced to pause production at several distilleries in Scotland and the US.
But a change in people’s drinking habits is only part of the company’s challenges. Diageo has been hit by US trade tariffs on alcohol imports introduced under President Donald Trump and, last month, issued a profit warning predicting flat or slightly lower sales in 2026. Meanwhile, data from NielsenIQ, a global consumer intelligence company, shows the company is steadily losing ground to competitors in the spirits market. Smirnoff, once a stalwart of the portfolio, saw sales tumble 6% last year, while long-time rival, Absolut, has remained steady.
Diageo has also faced significant supply chain challenges, including misjudging demand in Latin America, which left the region heavily overstocked. Similarly, in 2024, the company was forced to ration weekly pub orders in the UK following an unexpected surge in demand for Guinness.
Lewis’s playbook: what he might do next
At Tesco, Lewis doubled down on the fundamentals, selling off underperforming operations, restoring operational discipline and rebuilding trust with customers and investors. He is expected to deploy a similar method at Diageo.
“Lewis has a strong track record of stabilising complex organisations and driving meaningful cultural and operational change,” says Julia Payne, founder of Fractional CMO Services. “He doesn’t need to reinvent Diageo. Its fundamentals are sound. What’s missing is operational rigour – protecting brand equity, tightening execution and cutting avoidable errors.”
Diageo owns around 200 brands, yet only 13 generate more than $1bn each (£764m). Such a sprawling portfolio dilutes marketing spend, adds operational complexity and can obscure underperforming assets. It’s clear the company’s past focus on premium drinks has overlooked opportunities in mainstream segments.
His turnaround instincts should prove invaluable in guiding Diageo’s recovery
Looking ahead, Lewis will prioritise portfolio rationalisation, reducing Diageo’s historical dependence on a small number of brands. Reducing ineffective spending is another key focus. Interim CEO and CFO, Zoran Jhangiani, has previously emphasised the need for greater marketing accountability, questioning the value of “brand love” if it does not drive sales. He highlighted the importance of being more selective with investments and targeting a broader range of consumers beyond the premium segment. This strategic shift aligns with Diageo’s recently increased cost-saving target of $625m (£477m).
Better demand forecasting will be crucial, Payne adds, addressing recent supply chain missteps and embedding real-time intelligence into global planning.
“Diageo doesn’t need a dramatic transformation,” she says. “What it needs is sharper performance management. Under Lewis, departments will operate in sync rather than in silos, reacting to real market signals and working toward shared outcomes. That’s how Diageo restores predictability and investor confidence.”
Path to liquidity
Despite turbulence in the drinks sector, analysts are confident Diageo’s long-term position remains robust. “The industry is under pressure, but Diageo isn’t going anywhere,” Payne says. “Yes, operational coordination has slipped – the Latin America overstocking was avoidable – but a 200-brand portfolio in 180 markets doesn’t simply disappear.”
Many of its most valuable labels have deep heritage: Guinness and Johnnie Walker trace their origins to the 18th and 19th centuries. “Strong brands bounce back when leadership brings focus and discipline,” Payne adds.
And while people may not be drinking as much, there’s money to be made from teetotallers too. Diageo has non-alcoholic versions of its most popular brands including Guinness 0.0, which seems to be doing particularly well, having generated close to £50m ($63m) in annual sales this year, according to the retailer’s estimates.
For now, investors appear cautiously optimistic. Lewis may not be able to reverse the global decline in alcohol consumption, but he can make Diageo sharper, more nimble and better prepared for a future where consumers want both heritage and healthier choices.
The executive recognised for guiding Tesco through its most severe financial crisis has been named chief executive of the embattled drinks brand, Diageo. Sir David Lewis will take the helm on 1 January 2026 after a bruising time for the FTSE 100 company, which has seen its share price fall by a third since the start of the year.
After months of sliding sales, operational missteps and leadership instability, the arrival of a seasoned turnaround specialist is being hailed as a major coup for Diageo, which owns more than 200 brands including Guinness, Johnnie Walker and Smirnoff.
Lewis succeeds Debra Crew, the former US military intelligence captain who resigned in July following a turbulent two-year tenure marked by surprise downgrades, supply chain miscalculations and growing investor discontent. Shares sank to a decade low in early November, but news of Lewis’s appointment sent them up 7.5% as investors bet on a reset.
