Context:

The chief executive of Diageo, Debra Crew, has unexpectedly stepped down from her position without a succession plan, as announced by the company. This decision follows declining sales for Diageo, despite the strong demand for its Guinness stout, and is attributed to the board's efforts to maximize shareholder returns. Although Crew's departure coincides with John Manzoni's recent appointment as chairman, sources suggest there was no personal conflict between them. The company is currently searching for a replacement, with Chief Financial Officer Nik Jhangiani temporarily assuming her responsibilities. Crew's tenure saw a rise in Guinness sales but a significant drop in other brands like Ciroc vodka and Captain Morgan's rum, amid changing consumer drinking habits favoring less alcohol consumption by younger generations.

Dive Deeper:

• Debra Crew, the CEO of Diageo, resigned suddenly and without a successor ready to take over, which is an unusual move for a large corporation. The company cited mutual agreement for her departure but did not provide further details, while insiders indicated that the board had decided on her removal with her consent.

• Crew's resignation comes after John Manzoni became chairman of the board, but sources claim there was no clash of personalities between them. The board's decision to let Crew go was driven by the need to enhance shareholder returns, as Diageo's sales were outperforming the market, but its share price was not.

• During Crew's leadership, Diageo faced declining sales, although Guinness saw a 13% increase in net sales by the end of last year. This surge in demand led to a shortage in supply, which was criticized by pub landlords affected by the lack of Guinness stock.

• Despite the growth in Guinness sales, other Diageo brands like Ciroc vodka and Captain Morgan's rum experienced substantial drops in sales, by 32% and 21% respectively. The company, along with others in the beverage industry, is facing challenges due to shifting consumer preferences, with younger generations drinking less alcohol.

• With Crew's departure, Diageo has appointed its Chief Financial Officer, Nik Jhangiani, as the interim leader while they search for a permanent replacement. The firm remains committed to navigating the ongoing macroeconomic challenges and adapting to evolving market demands.