Diageo Plc named former tobacco boss Debra Crew to succeed Ivan Menezes as chief executive and become the highest profile female executive on the UK’s benchmark index.
(Bloomberg) — Diageo Plc named former tobacco boss Debra Crew to succeed Ivan Menezes as chief executive and become the highest profile female executive on the UK’s benchmark index.
Crew, 52, will make the leap from her current role as chief operating officer at the start of July, Diageo said in a statement. Menezes will retire after a decade at the helm of the distiller of Johnnie Walker whisky.
A former boss of tobacco company Reynolds American Inc., Crew is expected to embrace Menezes’ legacy and ride the wave of consumers switching to expensive spirits from beer and wine. The challenge will be persuading drinkers to continue the shift amid a cost-of-living crisis.
“We believe the strategy will be one of evolution not revolution,” said Citi analyst Simon Hales.
Diageo shares fell less than 1% in London trading.
Crew’s tenure at Reynolds was cut short by British American Tobacco’s takeover, but her experience will be useful in navigating the complex web of alcohol regulations across the globe.
Scotland is considering a ban on advertising alcohol, which could shutter Diageo’s Johnnie Walker experience — a visitor center dedicated to the 200-year-old whisky. And in India, a fast growing market for Diageo, alcohol regulation is set by state.
Safe Hands
Crew also worked at PepsiCo Inc., Kraft Foods Group Inc., Nestle SA and Mars Inc. She has an MBA from the University of Chicago and served as an officer in the US Army.
“We think investors will consider her to be a safe pair of hands,” Investec analyst Alicia Forry wrote in a note to clients.
Crew was widely expected to succeed Menezes since she was picked to become COO last July.
“This has been amongst the most orderly succession planning we can remember in consumer staples,” James Edwardes Jones, an analyst at RBC, wrote in a note to clients. “We won’t eulogize too much about Ivan, other than to say that his tenure has been seriously successful.”
Diageo shares almost doubled on Menezes’s watch. The 63-year-old executive, who joined through the merger of Guinness Plc and Grand Metropolitan Plc in 1997, will leave at the end of June.
During Menezes’ decade of leadership, Diageo became synonymous with premium spirits, acquiring brands like George Clooney’s Casamigos tequila.
Now, more than half of the company’s sales come from premium plus drinks — costing more than $50 a bottle — part of a push by leading spirits makers to get consumers to spend more without increasing their alcohol intake.
The industry is resilient, according to Menezes, because alcoholic beverages are reserved for special occasions for most people and they represent a small proportion of household budgets.
The distiller deftly navigated the pandemic, cutting marketing spending and switching its focus to at-home drinking while supporting the bars and restaurants it needed to still be in business when lockdowns ended.
What Bloomberg Intelligence Says:
Debra Crew will take the CEO reins at Diageo from July 1 with no “must-sort” issues, just its organic revenue growth target of 5-7% to June 2025 to deliver as economic growth stutters. Its leadership positions in all spirit categories give her the perfect platform as long as brand investment continues.
— Duncan Fox, BI consumer-goods analyst
In a fragmented alcohol market, Diageo said in 2021 that it only has a 4% market share. The company plans to grow that figure to 6% as it continues to make acquisitions and consumers opt for more expensive drinks.
–With assistance from Lisa Pham.
(Adds Crew’s age in second paragraph, details on tobacco experience in fifth)
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