>> it turns 21. biggest producer of spirits in the world. driving the business forward is a man who has been with the company since its inception. today we meet its chief executive. >> thank you so much for joining

us. how has the business changed since you joined? is such an exciting time, the last two decades. moreonsumer is a lot , inrested in premium brands mythology and cocktails. the business has grown terrific around the world. the emerging market is coming through stronger. the developed world is also in good growth. the court dynamic network is people around the world wanting great experiences and those who choose to drink want to drink better. that is a good thing. host: what attracted you to the drinks business? do you remember the day he walked in the door? did you find yourself at home? >> i do. i am a brands person. i have always loved brands. when i got the call from

guinness, two of my favorite brands were in this company. guinness and johnthony walker. -- johnny walker. it was not a difficult decision. johnny walker is a hundred 98 years old. guinness was started in 1759. our job is to make these great brands greater. that is what attracted me to the company. host: you talk about the premiumiasian -- zation. independing on the country the culture, how socializing takes place. our brands participate in moments of celebration, relaxation, being out with friends. they are built into the fabric of culture. right now, whiskey has a real renaissance around the world.

young people are interested in whiskey. how it is made, where does come from. the stories behind it. that is what we love. telling the stories and getting that connection with consumers. host: how much does scale matter? do you need to be bigger to demand better premiums? >> it is interesting. it is both. my key job is to keep a big company small. scale does matter. we have a wonderful portfolio with market-leading brands across all the major categories. at the same time, you need to be very entrepreneurial. you need to be very connected to where trends are going. magic of the luscious to get the best of both. >> what does that mean? finding the local brand and rebranding and giving people a story? >> that and spotting the trends.

i just came back from johannesburg this week. what is really interest rate out is how it has come to south africa. tehrie a brand called which is doing remarkably well in the last few months. ours, whenny like trends like a developed, you have to write them quickly. i was look for teens on the ground, keeping the year -- and here to how culture is shifting. building our brands quickly. that something nightmare. had you keep up with it? i do not know why you spot that. >> we have a variety of ways. understanding what the conversations and culture are about. we look at trend of leaving bars and bartenders and what they are excited about. track what is happening on

social media with adults and what they're talking about. what our marketing teams around the world need to be really good at. it is actually a very exciting part of the job. you own two out of the five most important spirit brands in the world. have you keep those relevant3 -- relevant? >> our job is to make sure the brands like these are highly aspirational, relevant to the next generation of consumers coming through. the twentysomething-year-olds in brazil, johnny walker needs to be relevant, cool, aspirational. that consumer needs to be willing to pay a premium for this wonderful whiskey. that is how we define our job. these brands have to stay connected the culture because things change. how young people socializes changing. we have got to make sure our brand fits in with the trend.

that is the day job that we do. host: what is that? through marketing? does that change? you are place billboards with bloggers? a combination. in brazil, one of the things we do is have a wonderful truck, beautifully decked out with johnny walker. a looser on the country. it goes to communities and we host little advance. we did people to the whiskey and tell them the story of all the single malts behind johnny walker. the fact that the youngest whiskey was distilled before the financial crisis. it tell them the story of -- is amazing how much interest we get. when you bring a consumer into a brand, through a mentoring experience as we would call them, you get them for life. the thing about our business,

what you drink or what you serve says a lot about you. our brands need to live up to that expectation. host: talk to me a little bit about the u.s.. it is your largest market. you expected to remain so 10 years from now? >> the u.s. is the fantastic market for us. north america is about half of the process -- profit of diageo. the demographics are very positive. i refer to it as our biggest developing market. you have the growth of the multicultural population that is very strong. latino, african-american, asian, bode very well for premium brands. it is also a young generation. you have more americans turning 21 thing you do in europe. the taste profiles are changing. there is a huge interest in cocktail culture. mythology is hot.

young people are jerking more spirits. >> thank you for now. coming up, running a global empire. with ivan. ♪

host: as well as running the world's biggest spirits company, he sits on the advisory board of the chinese business council and the u.k. indian chief executive form. his roles require a deep understanding of the challenges and opportunities of international business and the eternal hunt for growth. more than a third of his revenue came from north america. 26 at -- 20% asia.

emerging markets getting a taste for spirits? can you see a clear pattern -- some of the more developing economies getting the same taste as western ones? >> three much so. penetration of spirits is still low in places like africa, latin america, and asia. people aspire for great brands. with the growth of the emerging middle class, we see about 500 million coming in to legal drinking age. it is a really exciting opportunity for us. it is not a straight line. this is the nature of emerging markets. i was in south africa this week. i will be in nigeria next week. what you need to do is stay very consistent in building your brand for the long haul.

there will be a zigzag. you have top years. we have gone through that. over time, the growth prospects are really exciting. space that is affordable indulgence and luxury. when people want to socialize, to celebrate, our brands play a wonderful role in that space. the trend for people drinking better continues to be very strong. host: how you go against a local spirit or a local drink? will people drink both? >> the key in making our brands is have them resonate at the local level. host: the taste. >> not just. in brazil, johnny walker is seen as an iconic brand of brazil. not as an international brand. that is how we build the brand.

we have a campaign of keep walking brazil. it is connected with the consumer. they view it as, my brand. iowa's telemarketers around the world, you have to keep your brand connecting at a local level. yes, they are big global brands. the same thing is true in india. the biggest whiskey in the world. a lot of it is local whiskey. the aspiration to move into scotch whiskey is very high. we are keeping scotch very relevant in the local locations. host: i was going to ask about pricing. is that a big headache for you? aspirational but not too expensive so that they will go to another brand. andrice is an export and -- important aspect. brands, the prices of the we watch closely. at the end of the day, our

brands are affordable. hanoi step up to a bar in and order johnny walker blue label, you are not betting the farm. you are not buying a fancy watch. it is a great occasion. special lists of our products it is also affordable. getting that price value equation right is important. host: what about the bottles? with some you sharing smaller sized bottles for certain emerging markets. is that because of how they drink or is it about affordability? >> it is a combination of both. there are occasions where the smaller pack sizes, where small groups are going out. in a beer out that we have a program where people in vietnam or africa are largely drinking beer. on special occasions they may take a small bottle of johnny

walker and share with friends around the table. it addresses affordability but they buy for the occasion. manage something we through our understanding of the markets and are consumer. >> a special distilling process. 28 generations of knowledge. the best can only get better. 800 years.nother you sell differently to the chinese consumer than you do to the american consumer? >> the big thing about china is that most of the value and alcohol happens with meals. enormous and very profitable in china. so ingrained in culture

and ingrained into entertaining and how it is consumed, with friends or business colleagues, with food. we have a brand which is now doing really well. a grew 75% this year. it is highly aspirational but it is connected to the food culture. in the u.s., most spirit consumption is pre-dinner, after dinner, cocktails, going out. the occasions and cultural understanding is really important. this is all makes the business of fascinating. we do not have one way we build a brand. we get deeply immersed in local culture and tradition and then find the way to stay contemporary, aspirational in that context. host: i do not know that is comparable. two people drink more if they drink with their food? the main difference, i would say, is the ritual of

celebration and toasting that happens in the case of china. it is not so much drinking more. it is a more muscle -- more social occasion. ritual around celebrating each other, toasting each other. that is where the brand plays a medical role in china. role in china. china,f you look at latin america, where you see the most potential longer-term? >> india, china, africa will have a lot of growth. latin america is very important business with us. scotch whiskey will continue to grow. overall, the emerging markets represent a lot of runway for growth. ofare early in the stage development in our premium brands. as gdp growth happens there, we

see a lot of opportunity. the demographics are in our favor. the taste profiles are going there. are drinking better and choosing better brands. we are well positioned to benefit. get lesshouseholds rich because of inflation or interest rates, do they cut down on alcohol consumption before anything else? play inally, our brands an affordable, special occasion space in many of these markets. you would see a bit of slow down on premium brands with consumers may be choosing the johnny walker red label instead of the black label. the pocketbook is under a bit of pressure. four times celebrate a year instead of six times year. you would see those adjustments take place. is, when itrtant happens, it is still important to support your brands. when economic growth comes back,

you want the brand to still have that connection with consumers so that they will step up their consumption or the number of occasions they enjoy. host: thank you. >> up next, bringing a drinks giant into the future. the whiskey being created now will not be ready to drink for 40 years. what will the drink industry look like then? more -- more, next. ♪

host: he knows his business well. over two decades he has held numerous management positions.

his employees, more than 30,000 of them, are valued as much as the company's customers. diageo has more women in senior roles and will soon have gender parity. ivan, when you look at how your employees would describe you, but usually says a lot about how a chief executive is perceived. what would they say about you? oh my gosh. i think, approachable. possibility. demanding. i call it high low. i think on the big picture. i enjoy brands. i enjoy customers. i enjoy picking up the phone to a brand manager in ethiopia and asking them how the brand is

doing. is what >>? they would say. whether it is meeting was local governments and customers, i always go out of the trade and do not like your did you get the true understanding of how we are performing in the market. and meeting her people. i get a lot of energy from being out. i do not enjoy being in headquarters. i would much rather be out on business. host: do you come in incognito or do they know you're coming? >> both.

i often go out on my own and decide which shots i will go in and take a look. ownve to get time on my when i am in a market and walk the streets and get a good feel for the culture. i enjoy that. as i said, you learn a lot. you also focus- on drinking responsibly. does that come from you? is a pressure around you that makes you do that? did it come from within? >> it is in the core values. it is something i am very proud of. we are in a category which has been around for centuries. we take the view that, for people who choose to drink, we want them to drink in moderation. that is perfectly normal as part of a balanced lifestyle.

we also realize that alcohol causes harm in society when it is misused. is passionateageo about making a difference in reducing alcohol harm in society. being excessive drinking, underage drinking, drug driving, these are some of the areas we have significant ambition and programs to make a difference. host: is that with government or schools? >> we were with governments, we work with schools, we work with ngos, we work with local communities. .ery integrated in mexico city, we work with local police on a drug driving program. it had good success. and mindy emerging markets, it is an issue. many emerging markets, it is an issue. we do with real pride in commitment. our employees believe

passionately in the work we do in the field. host: talk to me about diversity. gendere you achieved parity on the board where no one else has? >> it starts from our core values. we have always put inclusion at the heart of diageo. i am really proud of our track record. 40% of the executive committee. 30% of senior leaders are women. i see that improving. it is not just gender diversity. diversity in nationalities, diversity and ethnicity, sexual orientation, style. to me, i have been in business over 30 years. diversity in the team, it is huge. i see the benefit in spades. i'm really pleased with where diageo is on this journey.

i think we can take it much further. host: my two other companies fail -- why do other companies fail? >> unique conviction and believe. i grew up in india. i grow up in a multiple -- multicultural community. to me, the importance of everybody coming in to work feeling included, valued, that is hated the full potential of people. it is not so much targets and numbers. wherecreating a market you can truly be yourself, no matter where your background or where you come from. one of our core values is valuing each other. that is at the heart of the country. i am proud of the culture that all our employees have created. that is when you see good things happen. that is why we have seen this in much moreress

diverse leadership groups across the country -- company. host: thank you so much. >> thank you. ♪

>> good morning. i am anna edwards. >> live from unit i am matt miller. this is daybreak europe. these are today's top stories. anna: a rate hike is almost guaranteed. what clues might the new chairman give on the path ahead? matt: facebook loses friends. shares slide again as the data scandal rattles investors. trumps steelw says and aluminumar