The news that Ivan Menezes is calling time on his tenure as Diageo’s CEO brings to mind a particularly grim summer’s day in London almost eight years ago. Fast forward to today and, my, haven’t you grown!
It was the end of July 2015 and the financial press corp was collected at Diageo’s headquarters to hear how, for the second successive year, the group had failed to deliver any sales growth. Fiscal 2014 [to the end of June] had finished flat with the subsequent year also closing with the needle on the bar.
Ivan Menezes entered the room looking markedly paler than usual, there was little in the way of the usual glad-handing and no hint of a smile to speak of.
“Dead man walking,” whispered the business journalist next to me.
The numbers don't lie: Under Menezes, the group had gone from a +5% sales showing in fiscal 2013 - the last year under previous CEO Paul Walsh - to two miserable years. And, even though Diageo sought to highlight macro-economic matters [a crackdown on high-end gifting in China, the collapse of Venezuela's economy] while also trumpeting its "long-term perspective", the odds on Menezes still being in post come the end of calendar-2015 were shortening by the day.
In the background, however, moves of a more productive kind were afoot.
Among Diageo's activities in 2015 were the divestment of Gleneagles Hotel in Scotland, the offload of its "major wine interests" to Treasury Wine Estates and the sale of Red Stripe to Heineken. 'Getting our house in order' was priority number one, despite the carnage going on outside.
Heading through Diageo's door in the other direction, meanwhile, were Don Julio, with the group taking full control of the Tequila brand in exchange for Bushmills Irish whiskey in mid-2016, followed by the high-profile - thanks, George - acquisition of Casamigos Tequila for "up to" US$1bn a year later.
'How George Clooney saved my [professional] life' may have made for a catchier headline here, but it wasn't Clooney alone that kept Menezes - and Diageo - heading in the right direction, sales-wise. During his time at the wheel, the company has become a far more efficient machine, with funds from divestments being ploughed back into the business to support a targeted approach to growth by 'fishing where the fish are': "Thanks for your hard work, Ryan Reynolds," Diageo kind of said in 2020, "we'll take Aviation Gin from here."
Throw in the navigation of a pandemic - and its subsequent removal of a sales channel entirely for the best part of two years - and Menezes has a lot to be justifiably proud of.
To top things off, the awarding of a knighthood three months ago serves to put the gloss on a decade well fought - and won. Enjoy your retirement, Ivan.
