Last orders for Diageo boss after failure to lift spirits

“Pure Genius”, the slogan long used to sell Guinness, is now desperately needed by the black stuff’s parent. Diageo last week parted company with its chief executive, Debra Crew, by mutual agreement after just two years in the job.

Such a sudden ending in the corporate world is rarely a good sign, suggesting a fundamental disagreement over strategy, if not something worse. Days before her departure Crew had told the chair, Sir John Manzoni, her position had been made untenable by the board’s failure to quash speculation that finance boss Nik Jhangiani was pitching for the job.

Crew’s relationship with investors never really recovered from a surprise profit warning at the start of her reign, and the share price has halved since she took over from Sir Ivan Menezes, who had doubled the company’s value by focusing on about 200 premium drink brands.

That upmarket move was smart in a challenging moment for the drinks business. Globally, alcohol consumption peaked in 2013 at six litres a head and has since fallen to about five. Younger adults are driving this steady decline. Gen Z, in particular, is a “sober curious” generation.

This has started a search for new sales including forays into emerging markets, the rise of craft beer, and the boom in celebrity spirits.

All of these trends seem to have peaked, or at least slowed, prompting the likes of Diageo to seek new opportunities. Many drinkers are switching to low or no-alcohol alternatives, which can generate higher profit margins, at least in beers. Guinness 0.0 is doing nicely, for example. But the spirits business, in which Diageo is strong, has yet to develop no or low-alcohol versions able to generate margins that match the alcoholic originals.