Nik Jhangiani has gained shareholder approval through his direct communication style but Diageo needs more than effective messaging to recover as the leading spirits company worldwide. The sudden departure of Debra Crew ended her two-year leadership which resulted in a 44% decrease in shareholder value.
The investors viewed Jhangiani as a reliable executive because he served as Diageo’s former Chief Financial Officer. Multiple key investors believe the permanent CEO needs to execute immediate actions to reduce debt while optimizing the product range and restore market growth.
The company operated at peak performance when Crew took over after the pandemic-driven spirits market expansion. The company experienced declining margins and reduced consumer demand because of both the post-COVID market correction and U.S. tariff increases and inflationary pressures. The company’s debt accumulation and aggressive expansion plans during the boom period now create significant challenges.
Flossbach von Storch investor Kai Lehmann demands the new CEO to begin selling underperforming brands while directing the business toward new priorities.
The company faces increasing competition from alternative beverages while public perception about drinking health risks continues to evolve. The leadership transition occurs at a crucial point for the organization. Investors demand concrete changes instead of comforting statements because consumers are reducing their spending and costs are increasing.
