Power Players: What's next for Guinness owner Diageo?

**Will Bain** (0:00)
Hello, and welcome back to Power Players from Business Daily. Now, is your favourite tipple among this lot?

**Kate Bernot** (0:06)
Gordon's.

**Gronja Weyfer** (0:07)
Shall we?

**Will Bain** (0:09)
No wonder the Guinness is great.

**Gronja Weyfer** (0:12)
For every good mixer, there's only one Smirnoff.

**SPEAKER_4** (0:15)
Bailey's?

**Lokhinandan Borwa** (0:19)
When the ocean calls, only one captain answers.

**SPEAKER_6** (0:23)
Captain Morgan's spiced rum.

**SPEAKER_4** (0:25)
The first luxury tequila, Ton Julio, make your move.

**Rahul Tandon** (0:29)
With the perfect taste of a Tanqueray and Sonic.

**Will Bain** (0:40)
Yeah, the company behind all of those massive drinks brands and dozens more is Diageo and we're looking at it today because after poor sales and a falling share price, it's only gone a bit of a reset under a relatively new boss whose nickname is Drastic Dave. So today, can a drastic touch get a drinks giant growing again? Yeah, welcome back to the programme. Will Bain again with you here today in the UK.

**Rahul Tandon** (1:08)
I'm Rahul Tandon, also in the UK but in a different studio from me.

**Will Bain** (1:12)
And today we are joined from Montana in the United States by Kate Bernot. Kate is a journalist, consumer insight analyst at Feel Goods Insight, a drinks industry newsletter, knows Diageo well. The US accounts for up to 40% of Diageo's sales as well. So an important bit of the story today. Kate, morning to you. Very early to be talking favourite boozes, I know. But have you got a Diageo tipple among your favourites there? Is there a bestseller in the United States or in North America from their range?

**Kate Bernot** (1:42)
Well, given that it's morning for me, it does feel like I should have some Baileys in my coffee, but I think it'll be a Guinness for me.

**Will Bain** (1:48)
I was going to say, Mr. Tandon, I think you're probably on that stretch as well.

**Rahul Tandon** (1:51)
Well, I've got to be honest with you. You played that montage. I want them all. It's a hot day. How many could you get through during the programme? I mean, look, they're brands that are so synonymous with drinks all over the world, aren't they?

**Will Bain** (2:03)
Well, that's why we thought this might be a good topic for today because this is a truly global consumer company, isn't it, guys? Whether you're listening in China and perhaps you like some of their whiskeys, perhaps you're listening to us in Southern Africa and you drink a lot of their beers like Tusca or Guinness, as the guys have been joking about, or of course Europe, where the company is based from North America, everything from celebrity tequila brands right down to beers on taps in your local pub.

**Rahul Tandon** (2:27)
I'm going to interject. Did you notice that Will didn't answer the question? His favorite drink? Come on. We got a problem at times. What's your favorite drink out of them all, Will?

**SPEAKER_4** (2:34)
Ah, Will. Will.

**Will Bain** (2:35)
I'd be with Kate on the Guinness, definitely. Kate, why don't you kick us off taking us back a little bit because we're going to talk a lot about the sort of pickle Diageo, I guess, has got itself into as a company and the turnaround plan the company's been talking about in the last few days as a result. But this was and has been for a long time one of the absolute giants of alcohol sales right around the world. So how do we kind of get here in a bit of the history, I suppose, and that boom during the pandemic too that the company saw?

**Kate Bernot** (3:01)
The scale of this company globally is really hard to overstate. Presence on so many continents and so many markets in so many sectors of alcohol. There was a great couple of years for this company during the pandemic. All of us were at home reconnecting with our love of alcohol in a way that perhaps we regret.

**SPEAKER_4** (3:20)
Came to regret.

**Will Bain** (3:21)
Came to try and work off in the gym later.

**Kate Bernot** (3:24)
Yes. We all got back to our cocktail making. And of course, the boost in the on-premise after lockdowns lifted. And now that conditions have sort of normalized around the world and economics are less favourable, we see some real significant slowdowns. Obviously, Diageo, not the only liquor company facing difficult economic conditions, but there are some specific things to their portfolio and their company that have made them feel those a little harder than others.

**Will Bain** (3:51)
Well, right, Rahul. Kate's spot on on that, isn't she? It was the fact that there was that time there Diageo was trying to ride that wave, buying up a lot of big celebrity in particular, really increasing its portfolio in spirits in particular, right through that period that Kate was talking about.