Diageo’s new boss sets out vision for drinks giant
By “small”, he aims to make sure Diageo, which has splurged £2.5bn on acquisitions in the last three years, doesn’t fall into the trap that awaits many expanding companies, which fail to keep an eye on local trends in the numerous countries in which they operate.
Presenting his first results to the City on Wednesday, Menezes said he wants to make his mark at Diageo by “making this big company act small” and ensuring it remains “entrepreneurial” in responding to fast-changing trends in its 180 markets.
“I’ve been in the consumer business for 30 years and I can’t think of a time where consumer demographics and trends are moving as fast as they are now,” Menezes, who started his career selling Nescafé in the “wilds” of India for Nestlé, said. “What this says is there are opportunities but also threats.
“Shifts happen very fast and you need to be able to respond very quickly.”
Diageo’s full-year results painted a mixed picture, with tougher trading in certain key emerging markets, such as China, Brazil and Nigeria, a strong performance in the US and continued declines in Western Europe.
Organic net sales rose 5pc in the year to June 30 to £11.4bn, while pre-tax profit edged up marginally to £3.123bn from £3.121bn the year before.
However, sales growth fell short of the 6pc annual average Diageo is targeting over 3 years, as the maker of Johnnie Walker whisky and Smirnoff vodka came up against challenges such as a crackdown in China on extravagant government entertaining and economic slowdown in Brazil.
Despite the problems in individual countries, Mr Menezes insisted Diageo’s recent buying spree in the emerging markets – which included taking a 25pc stake in India’s United Spirits and securing the remainder of Chinese baiju maker ShuiJingFang – would stand the company in good stead in the long-term….
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