One of my bigger investing disappointments in recent years has been Guinness brewer Diageo (LSE: DGE). I had liked Diageo for years but the share price was too high for my tastes. Then it fell to a point where I felt comfortable buying – and after I did, it kept on falling!

The share price has tumbled by 23% over the past year alone and 56% over five years.

As investors, we often hear that past performance is not necessarily a guide to what will happen in future.

While intellectually I know this to be true, it can sometimes be hard to look at Diageo’s storied history, brilliant portfolio of premium drinks brands and massive cash generation potential and not believe that, sooner or later, the glory days will be back.

But what if that never happens?

A shifting demand landscape could be very bad news

For starters, there are industry trends to consider. Over the past couple of decades, alcohol consumption per capita worldwide has declined considerably. Global beer sales have shrunk dramatically, even though Guinness is bucking that trend.

Spirits are also losing ground with younger consumers who are more likely than older adults to be teetotal or only moderate drinkers.

There are other alarm bells when it comes to premium spirits too. High-priced drinks are struggling to maintain their appeal in a weak economy.

But even putting that to one side for a moment, the bigger trend of declining alcohol demand is an existential threat for Diageo. The FTSE 100 firm has been growing its low- and no-alcohol business with brands such as Seedlip and Guinness 0.0. But getting into what are essentially soft drinks is a different business space to where Diageo’s core expertise lies – and a crowded one.

The company’s hurt its own investment case

The growth angle then, may have weakened or vanished in recent years. But what about income? After all, Diageo has long proven its massive cash generation potential. Until a couple of years ago, it had an enviable record of having grown its dividend per share annually for decades.

This year though, a new chief executive has arrived and the board has halved the dividend. Seen positively, that can be interpreted as fiscal prudence given the company’s current challenges and net debt of $21.7bn.

But the dividend was a key plank of the investment case in recent years, given the Diageo share price’s disappointing performance. Halving it makes the share less attractive to many investors, including me.

For now I am hanging onto my holding but will not be adding to it.

It could be make-or-break time for Diageo’s strategy

Having Guinness (and a few other beer brands) under the same roof as premium spirits should offer some benefits of combination, like selling into the same licensed premises.

But until the mid-1980s, these were two different businesses. With Guinness’s recent strong performance, some investors see a case to break Diageo up.

Next month sees the scheduled announcement of the company’s new strategy. Given its challenges, getting it right could help boost the share price from today’s depressed level.

I fear that getting it wrong though, risks the Diageo share price never getting back to where it once traded, given that the world is changing around it.

Before the new strategy is revealed and starts to show its impact, I see no compelling case for investors to consider Diageo.

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Christopher Ruane owns shares in Diageo.