Do family-run alcohol companies limit diversity?

Legacy companies need to provide platforms for diversity, not simply check boxes

A diverse future doesn’t look like today

The American Dream is the belief that one can achieve wealth, success, and power through hard work.¹ What makes the dream possible is a faith that equal opportunity exists for those who are willing to put in the blood, sweat, and tears. For the dream to be realized, it is often posited that the circumstances of one’s birth shouldn’t be a factor that limits success. However, the desire for one’s family and children to enjoy upward social mobility can hamper diversity. Legacy distilleries, wineries, importers, distributors, and retailers must reckon with the complicated social calculus that aims to balance family control with increased representation amongst employees coming from different backgrounds.

As family-run companies mature, the number of decision-makers with the same last name tends to increase; the backgrounds of those at top of the company hierarchy become homogenous. Multi-generational family enterprises tend to:

• Consolidate power within the family

• Limit the likelihood of failure of those within the family

• Place family members in positions of authority

• Restrict dissenting opinions²

All of these things stifle diversity in an industry that already lags far behind what any reasonable person would find acceptable. Has much changed in the three years since a SevenFifty Daily survey reported that 85% of those that work in beverage alcohol are white, while only 64% of the US workforce identify as such? This jarring discrepancy has no explanation save for systemic racism and exclusionary gatekeeping.

True diversity means providing platforms, not checking boxes. For diversity to work, a family-run company cannot ignore equity or inclusion. Power must be shared for diversity to be realized. Family stewardship is a poor excuse for neglecting to do so.

Whether large or small, family wine and spirit enterprises must disabuse themselves of the notion that tradition and change are incompatible. Values aren’t the people that believe in them; they are the ideas that unite disparate people.

Change is possible. Twenty years ago, who would’ve guessed the increasing popularity of the well-off and wealthy limiting the inheritances of their children?³

The relinquishment of some control needn’t be viewed as a net loss. Family wine and spirit enterprises need to avail themselves of the benefits of diversity which include, but aren’t limited to:

• Higher prospects for innovation

• Increased sales

• Better decision-making

• Improved employee trust and engagement

There are few things less intuitive than sharing power, and, by extension, promoting diversity. After all, hasn’t the goal of business always been to accumulate more power? Haven’t we, as a species, evolved to trust our tribe and few others? Still, owners and managers must recognize that it’s not their employees they compete with. When different voices are elevated, it doesn’t dilute the family business—it assures its continued success.

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What I’m reading this week

• Does the three-tier system hinder [product] diversity? (Irish Liquor Lawyer)

• The 37-Year-Olds Are Afraid of the 23-Year-Olds Who Work for Them (The New York Times)

• Reconsider Ghosting—Here’s How to Respectfully Withdraw (Grammarly)

• The Whiskey Unicorn Goes Crypto (Punch)

1. The American Dream is also a shopping mall in New Jersey that took “15 years, three owners, two names and hundreds of millions of dollars worth of taxpayer incentives” to build. It might be argued that both the idea and the shopping center are nothing more than capitalistic illusions.

2. My mind naturally wanders to the scene in The Godfather where Michael admonishes his brother Fredo, “…Don't ever take sides with anyone against the Family again. Ever.”

3. Warren Buffett has said, “My family won’t receive huge amounts of my net worth. That doesn’t mean they’ll get nothing… I still believe in the philosophy ... that a very rich person should leave his kids enough to do anything but not enough to do nothing.”