Diageo plc: CEO History

Arthur Guinness signed a 9,000-year lease on the St. James's Gate Brewery in Dublin in 1759 — at £45 per year, which may be the most favorable property transaction in the history of the alcohol industry. The ultra-premium segment — Don Julio, Johnnie Walker Blue Label, Mortlach — generates margins that the volume brands cannot match. Diageo's major brands have existed for decades or centuries; they do not depreciate in the way that technology assets do. Maturing whisky — sitting in oak barrels across Scotland for 10, 15, or 25 years — represents capital committed long before the product can be sold. That trend has legs in the U.S. Market and is beginning to appear in European and Latin American premium segments as well. Arthur Guinness poured his first commercial batch at St. James's Gate in Dublin in 1759, two years after signing the remarkable 9,000-year lease that secured the property for essentially nothing per year in modern terms. He initially brewed ales but by 1799 had committed the brewery entirely to the dark porter style that would carry his name around the world. By the mid-nineteenth century, Guinness was the largest brewery in Europe. The modern Diageo corporate structure came from an entirely separate direction. The 1997 merger of Grand Metropolitan and Guinness plc was a transaction between two companies that had each assembled pieces of the spirits industry separately, and whose combination created a portfolio with no equivalent. The name Diageo was invented for the occasion — derived from Latin and Greek roots meaning "day" and "world" — a non-word that carries no heritage but also no baggage. The Seagram's spirits acquisition in 2001, splitting the portfolio with Pernod Ricard, added Crown Royal Canadian whisky and Captain Morgan rum to the portfolio, cementing Diageo's position across every major spirits category.