Diageo Interim CEO Challenges Gen Z Drinking Myths and Outlines Marketing Overhaul

Nik Jhangiani, the interim CEO of Diageo, was frank at the Barclays Conference held in Boston. As he took over in July, he talked to investors on September 4 and said issues and the fiscal 2025 performance of Diageo, which recorded a 1 per cent sales growth.

Jhangiani has addressed the question of whether drinking patterns are permanent or temporary. He identified trends of cannabis popularity, weight-loss drugs and moderation. But he challenged the health-obsessed nature of Gen Z, claiming that many of them are on strained budgets.

He criticised the moderation narrative, claiming that it has less to do with wellness and more to do with not getting hangovers or saving money. Economic pressures have turned the trends in premiumization downwards, but Jhangiani believes that recovery has a chance as the economies stabilise.

In 2025, Diageo increased the non-alcoholic portfolio by 40 per cent. The acquisition of Ritual Beverage Company consolidates its position as a leader in no-alc spirits by surpassing its competitors. Jhangiani believes this puts Diageo in the right position, regardless of the trend in drinking.

He acknowledged that Diageo had an inefficient marketing expenditure that rose to reach 3.66 billion dollars in 2025. The Accelerate program, initiated in May, aims to save $ 625 million in three years; it will emphasise smarter rather than reduced investments.

Jhangiani put a special focus on brand-building. Media make up about 40 per cent of the budget, and he wants to increase it digitally so that it can be tracked better. There was also the wasteful trade spending amounting to 40 per cent, which is now to be cut.

He likened running the brands of Diageo to raising a large family, with the main focus on high performers. It does not focus on percentages, but on absolute dollar margins, so that profitable lines such as Don Julio in Mexico are not counted.

Recent developments include the sale of African brewery interests and the change in the North American partnership of Ciroc. In June, Net debt stood at 21.9 billion dollars, and leverage was 3.4 times EBITDA, which is consistent with guidance.

Jhangiani is not a pessimist. Moderation or premiumization back or forward, Diageo is prepared. The stock increased slightly after the conference as it indicated investor confidence in his realistic way of managing the changing tastes and economic conditions of consumers.