Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo

Food & BeverageAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTDave Lewis plans executive overhaul at ‘fat and happy’ DiageoNew chief at the struggling drinks giant is set to replace members of top team as part of plans to reinvigorate growth © FT montage/Bloomberg/Alamy/DreamstimeDave Lewis plans executive overhaul at ‘fat and happy’ Diageo on x (opens in a new window)Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on facebook (opens in a new window)Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on linkedin (opens in a new window)Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on whatsapp (opens in a new window) Save Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on x (opens in a new window)Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on facebook (opens in a new window)Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on linkedin (opens in a new window)Dave Lewis plans executive overhaul at ‘fat and happy’ Diageo on whatsapp (opens in a new window) Save Madeleine Speed in LondonPublishedFebruary 20 2026Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.New Diageo chief executive Sir Dave Lewis is planning a major shake-up of his executive team, as the former Tesco boss moves to stamp out the ailing drinks giant’s “fat and happy” culture.Lewis is planning to replace several members of the company’s 14-person executive committee at the maker of Johnnie Walker and Captain Morgan, according to two people familiar with the matter. Investors are hopeful that Lewis will drag the world’s biggest spirits company out of a three-year malaise characterised by anaemic sales growth, profit warnings and boardroom drama. The new chief, whose reputation for cost-cutting earned him the nickname Drastic Dave, is planning to push through “wholesale change” at London-based Diageo, according to one of the people familiar with his thinking.The person added that the Guinness maker, which employs more than 29,000 people, had become “fat and happy” and its decision-making convoluted.While Lewis, 60, is not expected to announce personnel changes at the FTSE 100 company’s interim results next week, investors expect him to act quickly to kick-start a turnaround. The other person familiar with Lewis’s thinking said he was likely to strip out entire layers of Diageo’s management.Investors are hoping Dave Lewis will drag Guinness maker Diageo out of a three-year malaise © Chris Ratcliffe/BloombergDavid Samra, a managing director at Artisan Partners, Diageo’s fifth-biggest shareholder, said Lewis would “definitely” want to bring in his own people. “It wouldn’t surprise me if a layer or two came out . . . he’s not a plodding human being,” he added. Diageo declined to comment. Diageo’s struggles have come during a lean time for the wider spirits industry after a pandemic-era drinking boom went into reverse. The cause of the slump has become a hot topic of debate among investors. Some believe it is because alcoholic drinks have simply become less affordable after a nasty bout of inflation and that sales will rebound when disposable incomes grow. But others reckon the drinks industry is in the early stages of an inexorable decline, as consumers cut down in pursuit of a healthier lifestyle, or turn to cannabis or gaming and social media instead.Investors are eager to hear Lewis’s assessment of the problem.“Dave is the right person to diagnose the issues correctly . . . is it [because of] people smoking pot? Is it people on GLP-1s [weight-loss drugs]? Is it affordability? Maybe it’s all of them,” said Samra, adding that Lewis’s predecessors had failed to come up with a strategy to address the problem. When he started in the role last month, Lewis became Diageo’s third chief executive in less than three years. Debra Crew departed last summer after the board failed to quash speculation that her chief financial officer, Nik Jhangiani, was angling for her job. Jhangiani served as Diageo’s interim chief until Lewis’s arrival, but his failure to land the job on a permanent basis has raised questions over whether he will stay. Diageo’s investors and advisers said they expected Lewis to retain Jhangiani for the foreseeable future to ensure continuity.“We would love to see Nik stay on board,” said Kai Lehmann, analyst at top-10 Diageo shareholder Flossbach von Storch, but cautioned that he and Lewis “are both powerful personalities”.Yorkshire-born Lewis spent his first six weeks in the job hosting town halls with staff and jetting between Diageo’s global offices, including in the US and India. He asked local teams to present him with a review of their businesses, said people familiar with his itinerary.Insiders said Lewis was going down well with the rank and file and that there was an “excited” atmosphere, despite the upheaval to come. “People are like ‘wow’ — he’s different to what we expected,” said one. Two other people close to Diageo said some of its top executives were less enthused by Lewis’s arrival. Once his information gathering is over, Lewis will be expected to draw up plans to lower Diageo’s net debt, which stood at 3.4 times adjusted earnings as of June 2025, well ahead of its target of less than three times. One route would be to stick with Diageo’s plans to sell non-core assets. The company recently sold its stake in Kenyan brewer EABL to Asahi for $2.3bn and is exploring potential disposals of its stakes in Chinese Baijiu business Sichuan Swellfun (Shui Jing Fang) and Royal Challengers Bengaluru, its Indian Premier League cricket team, according to people familiar with the matter.Diageo is said to be exploring a potential disposal of its stake in Royal Challengers Bengaluru © Indranil Mukherjee/AFP/Getty ImagesLewis has form for such moves: at Tesco he raised about £12bn selling off businesses in Thailand, Malaysia and Korea.Another way to reduce debt would be to cut Diageo’s dividend. Analysts at Jefferies estimate that if Lewis halved the payout he could bring leverage within Diageo’s target by the end of 2027.Beyond near-term remedial work, investors are hopeful Lewis will give some clues next week as to how he plans to reinvigorate growth. Shareholders told the FT they wanted to see some marketing spending redirected to sales teams.Julien Albertini, portfolio manager at Diageo shareholder First Eagle Investments, said the company should reverse cuts to “walking dollars — the sales people, the feet on the street”.With no end in sight for the drinks downturn, analysts believe Lewis needs to reconsider Diageo’s focus on premium brands — a corporate mantra for more than a decade — and invest more heavily in cheaper ones, such as Smirnoff vodka and Captain Morgan rum.The squeeze on consumer spending power has taken a heavy toll on Diageo’s most illustrious brands. In the US, sales of Casamigos tequila fell 11.5 per cent year on year in January, according to NielsenIQ.Flossbach’s Lehmann said Diageo had to “accept there is a limit to the luxury parts of the portfolio”. Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Retail & Consumer industry Add to myFT Corporate governance Add to myFT UK companies Add to myFT Beer and spirits Add to myFT Food & Beverage Add to myFT Comments