Europe is home to some of the world’s most iconic companies. Many started small to quell a single person’s curiosity before exploding into a global phenomenon. As a new resident, big, successful European brands have piqued my interest. What’s their story? How did they transform into the giants they are today? How have they sustained their legacy over time? Those are some of the questions I explore in this new series.
If Diageo drew its family tree, its roots would go all the way to the 17th century, further back than many New World countries like the U.S. or Canada. Since then, its brands have become an essential party guest, whether through Johnnie Walker whiskies, Guinness beers, or Smirnoff vodkas.
Still, the London-headquartered company we know today is just 27 years old. Some of its most iconic brands were started by accident or were the experiment of a single individual—but today, they’re household names around the world.
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The merger, worth $33 billion at the time, ultimately created a food and beverage juggernaut. It wasn’t until a few years after the deal that Diageo shed its food segment and transformed into predominantly a spirits brand.
After all these years, Diageo’s attention to detail and nod to its brands’ provenance isn’t lost on it. The company runs a sprawling archive in the village of Menstrie that’s as big as 55 football pitches, with over 5,000 bottles spanning the history of its oldest brands. It includes 18th-century recipe books and the Johnnie Walker founder’s original account statements.
“It’s the corporate memory of the business,” said Christine McCafferty, Diageo’s head archivist based in Scotland, adding that the company always “looks back to look forward.”
The company always “looks back to look forward.”
Diageo is now a powerhouse, generating over $20 billion in sales globally and ranked #155 on the Fortune 500 Europe list. It’s also home to 13 billionaire drink brands. Its secret lies in catering to Scotch connoisseurs, booze-loving bakers, and alcohol-shy Gen Z—all at once.
“We’re at the heart of social occasions,” Ewan Andrew, Diageo’s global supply chain and sustainability chief, told Fortune. He started his career as a shift manager 27 years ago at United Distillers, which used to be part of Guinness before its merger.
1. Never confined
The strategy of dividing and conquering can be a hit or a miss for businesses. In Diageo’s case, it was a game-changer.
One of its stand-out features has been its ability not to pigeonhole itself within the alcohol category and to operate across product ranges and regions so everyone feels catered to. Despite being born out of a living and breathing stout giant, Guinness, it didn’t focus primarily on beer as its Belgian rival AB InBev did. Neither did it focus solely on high-end liquor like Pernod Ricard. Instead, it did it all in a way that didn’t diminish any of the brands and their individual histories.
“For a company that was going to be a major top FTSE company, you needed to make sure that you weren’t just too many eggs in one basket with the volatility in the world,” Andrew said.
Diageo now makes pre-made Old Fashioned and Cosmopolitan cocktails, which was one of the primary growth drivers in its largest market, the U.S., in the last fiscal year.
The British company built facilities in markets from America to Australia. In addition to its recognizable brands, Diageo owns local labels that help it blend into each distinctive drinking culture. For instance, the company’s subsidiary in India owns several whisky and vodka brands.
2. Reading the room
London-headquartered Diageo has recently faced several storms that have wrecked the alcohol market. The pandemic threw the supply chain and inventory process out of whack and left the company to deal with leftover alcohol stockpiles. It also gave Diageo a more significant challenge: how should it cater to consumers around the world confined to their homes?
“The brand team on Baileys had struggled really for a while about being only sold at Christmas and Easter,” said Andrew. But the tide changed during the pandemic when the drink “took off like never before.”
Another case of Diageo catering to and fueling a trend is with its non-alcoholic beverages.
The 0.0 variation’s sales more than doubled in Europe during the 2024 financial year and has grown double digits every year since 2021.
“We made a difficult decision for a brand like Guinness,” Andrew said. “We actually ended up with a slightly improved liquid. These are huge brands and, in many cases, founders that go back a long way, so we have a great responsibility to kind of steward that.”
Next, Diageo wants to get its innovative drink in as many places as possible, inking a partnership for Guinness 0.0 with the English Premier League. Gordon’s, Tanqueray, and Seedlip also offer no-alcohol versions of their drink.
3. Living and breathing history
When you think of the spirits business, embracing breakthrough tech isn’t the first thing that comes to mind, as consumer preferences are often tied to traditions and habits.
But Diageo was not going to wait and watch on the sidelines. It made big bets on tech, shaping every aspect of its business, from how alcohol is sourced, brewed, and packaged to how it is marketed.
“I’d say that we’re we’re not sitting at the bleeding edge. We’re definitely leading, but you have to be careful,” he said. “We need to grow the business, and we need to do it sustainably.”
The company’s share price has slumped 24% in the last five years. Still, Diageo’s operating profits are up roughly 50% since pre-pandemic levels.
CEO Debra Crew said in July that the broad strokes impacting the alcohol industry, such as rising income in emerging markets and the popularity of spirits over beer and wine, will ultimately work in Diageo’s favor.
“In the face of a tumultuous four years marked by COVID-19’s impact, Diageo has demonstrated resilience and adaptability in the spirits sector, which is notably sensitive to economic cycles,” said Verushka Shetty, equity analyst at Morningstar. “The rising popularity of Guinness and tequila, alongside robust performance in India, further underscores Diageo’s ability to leverage market tailwinds and maintain its competitive edge.”
After all, Diageo’s brands have endured prohibitions, wars, pandemics, and more. Diageo’s collective clout across spirit categories gives it room to maneuver depending on what consumers are aching for.
“If you’ve got an intelligent failure where you know there’s a risk, you’re pushing the boundaries of things, but you’re managing that risk … that’s generating an entrepreneurial, experimental culture, and that’s what we need as a company,” Diageo’s Ewan Andrew said. “We can’t just become a big machine that runs and then becomes irrelevant.”
