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Diageo chief executive Debra Crew has quit with immediate effect and will be replaced on an interim basis by the embattled drinks group’s finance boss, after falling alcohol sales and waning investor confidence battered its share price.
The company behind Johnnie Walker and Guinness said on Wednesday that its board had kicked off a “comprehensive formal search process” for a new chief executive, confirming a report by the Financial Times that Crew was to be replaced.
The search would consider internal and external candidates, with chief financial officer Nik Jhangiani leading the business in the meantime, Diageo said. Jhangiani has quickly won over some major investors since joining Diageo last September.
Shares in the company rose as much as 4.3 per cent after Crew’s exit was confirmed before receding on Wednesday afternoon to close 0.6 per cent higher, giving the company market capitalisation of about £42.2bn.
The next chief will be tasked with reviving the embattled group, which is one of the top 20 London-listed companies by market capitalisation.
Crew, who joined Diageo as a non-executive director in 2019 and then worked as chief operating officer, has overseen a turbulent period since taking over as chief executive in June 2023. The American’s tenure got off to a difficult start when, after five months, she was forced to issue a profit warning because Diageo had failed to foresee a slump in sales in Latin America.
The FTSE 100 drinks group struggled to return to growth as a pandemic-era boom in spirits sales ended and consumers reined in spending. Shares in Diageo have declined 43 per cent since Crew took over.
In February, Diageo appointed Sir John Manzoni, former permanent secretary for the UK’s cabinet office, as chair, just as the company scrapped its target for medium-term sales growth of between 5 and 7 per cent, blaming uncertainty over US tariffs and weak demand.
Crew failed to convince some investors that sluggish sales were merely the result of a cyclical downturn, rather than operational issues or a structural decline in alcohol consumption.
In May, Jhangiani announced plans to slash Diageo’s cost base by $500mn and disclosed to analysts and investors that the group was considering substantial asset disposals.
Diageo said on Wednesday that its financial guidance was unchanged.
Manzoni thanked Crew for her work, “including steering the company through the challenging aftermath” of the pandemic and the “ensuing geopolitical and macroeconomic volatility”. Her exit was “by mutual agreement”, the company said.
Crew’s elevation to the top job at Diageo was brought forward a month by the unexpected death of her long-serving predecessor, Sir Ivan Menezes. After a stint in the US military, Crew forged a career in the consumer goods industry, which included a stint as chief executive of tobacco giant Reynolds American.
