Paul Walsh’s Tenure At Diageo Marked By Bold Strategic Moves That Paid OffMay 7, 2013
When Paul Walsh became COO of Diageo on January 1, 2000, the company was a food and drinks conglomerate whose holdings included Pillsbury and Burger King, in addition to Guinness Brewing and spirits and wine unit United Distillers & Vintners.
By the time Walsh became CEO in September 2000, the company had shed Pillsbury and Burger King and integrated Guinness into one spirits, wine and beer unit, Diageo PLC. Abandoning the old food and drinks model, the company became fully focused on drinks. This was considered a bold move, because organic growth in beverage alcohol—particularly in spirits—was practically non-existent at the time. But the strategy has paid off handsomely, as Diageo proceeded to lead a spirits renaissance that continues today.
The global performance of the top Diageo spirits brands from 2000-2012 has been remarkable. Smirnoff has risen from 15 million cases to 26.3 million cases in that period, while Johnnie Walker increased from 10.2 million cases to 19.7 million cases. Captain Morgan (acquired from Seagram in 2001) went from 4.3 million cases to 10 million cases and Crown Royal (another former Seagram brand) rose from 3.3 million cases to 5.2 million cases. Baileys, meanwhile, increased from 5 million cases to 6.5 million cases in that period.
Those five Diageo brands were up by an aggregate of 79% from 2000-2012. By comparison, five competing brands—Bacardi, Absolut, Jack Daniel’s, Jägermeister and Jim Beam—rose by an aggregate 40%.
Walsh, 57, will stay on for a year in a transitional role, but his successor, Ivan Menezes, is a Diageo veteran who knows the company in global detail. Like Walsh, Menezes, 53, has been with Diageo since its inception in 1997, and held a variety of senior marketing positions before becoming president of Diageo Venture Markets in 2004, with direct responsibility for 123 countries. He then became president and CEO of Diageo North America, a position he held for eight years. Menezes also became chairman, Asia Pacific in 2008 and chairman, Latin America & the Caribbean in July 2011. In March of last year he became Diageo’s COO, a move correctly seen as the stepping stone to his appointment to the CEO position that was announced earlier today.
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