Why Diageo’s Hina Nagarajan is leaving on a high

The view from the 10th floor office of Diageo India in UB Tower is stunning. The wall-to-wall windows face Cubbon Park, overlooking a canopy of trees stretching to the horizon and obliterating Bengaluru’s urban sprawl and never-ending traffic. “Will you miss this view?” I ask Hina Nagarajan, the outgoing managing director and CEO of Diageo India. After four years in the role—she was appointed in July 2021—Nagarajan is moving on to a global role as president of Diageo Africa and will continue to be part of the global executive committee at Diageo Plc, the British multinational that took over India’s United Spirits Ltd in 2013 by buying a majority stake in the company.

“I absolutely will,” says Nagarajan, smiling. “Bangalore has become home over the past four years when I moved here from Gurgaon. In fact, Arvind (husband Arvind Nagarajan) and I will continue to have a house here, even though we will be moving to London. So yes, of course I will miss Cubbon Park—but I do have views of Hyde Park to look forward to.”

Nagarajan is leaving Diageo India on a high. Under her leadership, not only did the company successfully navigate the tough second phase of the covid-19 pandemic, when the hospitality business, and consequently liquor sales, took a huge hit, she is leaving the company in a much stronger position than when she joined. To take just one metric, Diageo India’s consolidated net profit for the June 2024 quarter was ₹485 crore, a slight increase from ₹477 crore in June 2023—compare this to the consolidated net profit in the June 2021 quarter, ₹50.3 crore. To take another, the market capitalisation of the company crossed ₹1 trillion last year, up from approximately ₹40,000-45,000 crore in mid-2021.

Like many CEOs of publicly listed companies, it is not easy to pin Nagarajan down on the specifics when asked why she is leaving India after such a successful run. She first talks about wanting to lead a team that was hungry to win and the potential of the Indian market with growing aspirations, disposable incomes and a tendency towards premiumisation, which all make sense, but don’t answer the question. Finally, she opens up. “Look, this is part of the regular succession planning at Diageo. I am a global resource and Diageo needs me in Africa,” she says. “As a global executive committee member, I am equally committed to supporting Diageo where it needs me. A four-year stint is a solid stint for any CEO...I see another four or five years ahead of me in my career, so it’s like that one more role before I hang up my boots and do something else. It seemed like the logical time,” says Nagarajan, who just turned 60.

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This marks her second professional stint in the continent. Previously, she managed parts of Africa but was not yet on the global executive committee. Now, she will oversee the entire continent, which she compares to managing India’s 36 states, each functioning like a different country. Africa, she notes, has undergone significant transformation recently.

“The learnings from the regulatory challenges we faced in India are very useful. The advocacy and policy work we have done in collaboration with the government here are going to be quite helpful. What is slightly different about Africa is that it is a very large beer business, not the case in India, which is more about pure spirits,” says Nagarajan. “There has been a lot of learning from the spirits portfolio reshaping that we did here, though Africa is a little earlier in that journey.”

Premium benefits

Premiumisation was a key focus area for Nagarajan, with a strategy that included expanding its higher-end portfolio of brands, innovating new products, and focusing on “drinking better, not more”. As part of this effort, the company sold as many as 32 popular Indian brands in 2022—including Haywards, Old Tavern, and White Mischief. It bet instead on products like its McDowell’s & Co. portfolio with the X Series; ventured into white spirits and dark rum under the same brand name; transformed the popular Black Dog brand into a more premium product with variants; expanded its Smirnoff vodka line; and invested in the development of local premium liquors such as Godawan Single Malt.

At the same time, the company started paying attention to the growing craft liquor market in India. It invested in craft brands like Nao Spirits, which makes Hapusa and Greater Than gin—a move that captured two trends, premiumisation and a growing love for gin. Last year, it bought a minority stake in Sober, which makes non-alcoholic versions of gin, rum and whisky—again, following the sobriety trend among Gen Z. And, to deepen its focus on small batch spirits, it set up a flavour lab and experience centre, The Good Craft Co. in Bengaluru.

“And then there were other conversations, which are equally important to me,” says Nagarajan about building an organisational culture that favoured inclusivity. “If you look at the people-related policies we have launched over the last four years, they’re breakthroughs—six months of parental leave, including surrogacy and adoption and regardless of gender or sexual orientation, menopause guidelines, guidelines for people on the LGBTQ+ spectrum… now, we have introduced fertility guidelines.” She sees this as a lasting legacy, emphasising that the company’s diversity scores have gone up from 7.5% in 2015 to 27% now.

Corner office

In earlier interviews, Nagarajan had expressed some discomfort with repeatedly being asked questions about being a woman CEO of a large liquor company and about “work-life balance”—not something male leaders are asked quite as persistently—so I am wary of bringing this up, but Nagarajan laughs. “No no, I am happy to talk about that,” she says.

“The narrative has shifted from ‘woman CEO’ to business leader, from ‘look, a woman came in’ to ‘look at the business results’. When I got awards like ‘businesswoman of the year’, it meant two things to me—one, that there were enough women CEOs for them to be thinking of awards like this, and two, the normalisation of the alcohol industry—the shift from ‘liquor company’ to consumer packaged goods company,” she says. She’s referring to subtle biases against liquor companies that have existed in India for decades but are now on the wane as drinking is seen more as a social activity than a compulsive one.

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As a one-time student of hotel management, Nagarajan has seen that shift. Originally from Delhi, she went to the posh Modern School, Vasant Vihar, and could have drifted into a more academic-oriented life, except that her parents always insisted on financial independence.

Migrants from Pakistan at the time of Partition, they were “self-starters”, as Nagarajan puts it, her father “settling into the corporate world” and her mother becoming a teacher. After finishing school, Nagarajan joined the PUSA Institute of Hotel Management because she was eager to start her career early and the hotel industry was booming—this was the time of the Asian Games in Delhi. Simultaneously, she enrolled for an undergraduate degree with Delhi University’s School of Correspondence.

She never did enter the hotel industry: she took the Common Admission Test (CAT) held by the Indian Institutes of Management on a whim, and it changed her life. “My brother was planning to take CAT and he said, ‘Even if you don’t make it this year because you’re not prepared, you can always repeat it’. I gave it a shot, and as luck would have it, I got a call from all three IIMs,” she recalls.

She cleared the interview for IIM-Ahmedabad, but getting in was not going to be easy—she had to pass her undergraduate exams and produce a mark-sheet for admission, but the results for correspondence courses come in much later than for regular ones. Finally, IIM-A gave her 48 hours to produce the results, and she remembers calling her father crying, asking him to do something. “He went and met the dean of Delhi University and said, look, very few girls are getting into IIM-Ahmedabad. Here’s my daughter who’s got in, she doesn’t have her result, you need to do something,” says Nagarajan, laughing. The dean agreed to help and she got her mark-sheet, making the deadline by a hair’s breadth. “At 9 in the morning, I was at the admissions office with a sealed envelope containing the mark-sheet, which I hadn’t even opened, so I didn’t know whether I had passed or not—I had barely a month to prepare for my finals—and those five minutes were the toughest of my life.” Beyond getting into B-school, this episode holds a poignant meaning for her because she lost her father when she was in her first year at IIM-A.

Passion and purpose

Nagarajan feels most of her career has been about “marrying passion with purpose”. She spent 14 years at Nestle, mostly in the infant nutrition division, and this was the time when she was raising two young children herself. Joining Reckitt (formerly Reckitt Benckiser) in 2015, after a stint as India head of direct-selling beauty brand Mary Kay, was a big jump, especially as she was soon heading the company’s operations in Malaysia and Singapore, for which the family had to relocate to Kuala Lumpur. She credits her husband, who was her senior at IIM-A and by then a retail entrepreneur, for not thinking twice before agreeing to accompany her. “He basically reshaped his life for me. The reverse happens so often, but it’s rare even today for a man to change his career path for his wife’s,” says Nagarajan. He did it twice—later, when she was posted in China, he gave up his retail venture and became a full-time investor on stock markets. “He said, ‘I can work on a computer anywhere’,” recalls Nagarajan fondly. “He’s been my biggest mentor. He gave me the confidence to speak my mind and ask for what I want. When I see how many women we lose mid-career because of lack of support from families, from spouses, it feels like such a tragedy.”

Ask her to name one thing that most people don’t know about her, and she admits that she is addicted to casual mobile games. “I play completely brainless mobile games like My Fruit Mart (a cosy business simulation game) and Hidden City (a hidden objects game). They really help me relax. Though right now I’m not doing so well in them and that’s bothering me,” she says, laughing. Clearly, she likes to win.

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