The state of beverage alcohol industry salaries
TL;DR WBM's 2021 Wine Industry Salary Survey and ForceBrands' Salary Report 2021
Welcome to the latest edition of TL;DR.This is where I provide a summary of a recent industry report or survey and share my commentary. Think of it as Cliff Notes for wine and spirit professionals. Today we’re looking at recent industry salary surveys released by Wine Business Monthly and ForceBrands.
What they are
Conversations about money are difficult. In a capitalist society that feigns to be meritocratic, money (or lack of it) is closely associated with the American ideal of success.When we mistakenly conflate net worth with self-worth, conversations about money are akin to admitting that you’ve failed to realize your potential or that you’re obsessed with wealth. The result is an uncomfortable silence around one of life’s greatest tools: capital.
Companies are all too happy to indulge our collective distaste for the topic. Lack of pay transparency helps companies arbitrage compensation so that they can pay some more and many less.However, companies should take note that pay transparency improves employee retention, a fact that should not be forgotten amid the current scramble for talent.
Luckily, some resources shed light on the compensation of wine and spirit professionals.This month ForceBrands published their beverage alcohol salary report where they “compiled data ranging from the near beginning of the pandemic in May 2020 through August 2021.” They “looked at companies with revenues between $10-150M that employed anywhere from 15-500 people.” It should be noted that ForceBrands’ report methodology was not disclosed. As such, its findings should act as guidance and not gospel.
Additionally, Wine Business Monthly came out with their annual salary survey which focused on the base salaries of winery employees (based on a winery’s case production). This reputable report has been published annually since 1991 and its findings are, arguably, more reliable.
What they say
Gleaning through both reports yields the following trends and insights:
The ForceBrands’ report noted year-over-year increases in base salaries for the following roles: CFO, VP of Finance, Controller, Director of Sales, VP of Operations, R&D Manager, CMO, VP of Digital and E-Commerce, DE & I Leader.
A superficial review of ForceBrands’ report might lead one to believe that nearly everyone in the industry makes six figures. I doubt the picture is as rosy as it appears. Without knowing the report’s methodology, it’s difficult to believe that these salaries are representative of 1) less experienced employees 2) employees at smaller and mid-sized companies 3) employees from greatly different geographies.
As per the Wine Business Monthly survey, “Average base salaries for wine industry positions [at wineries] increased 0.5 percent in 2021, as compared to 2020. This is the smallest growth seen since 2015, when base salaries were up just 1.4 percent—over the years, the average base pay increases ranged from 2 to 5.4 percent.”
Most salaries at wineries increased modestly even though “wineries are struggling to fill open positions.” The greatest gains in annual base pay were seen by winemakers and vineyard managers. Interestingly, the position that saw the greatest drop in annual base pay was VP of Sales (which conflicts with ForceBrands’ findings, though we’re not exactly comparing apples with apples).
Why they matter
Despite the pandemic and record alcohol sales, there has not been a paradigm shift in compensation. If there were, you’d expect to see gains greater than inflation, which as of August was at 5.3%. The failure of salaries to outpace inflation instead goes a long way in explaining why, as Amy Gardner put it: “Employees are disgruntled, unhappy and are ready to find something else.”
Some notable upticks in salaries in the areas of technology and diversity reflect the recognition that these are opportunities for future growth.
What it all means for you
If you’re an employer… it’s time to spread the wealth. It’s time to find ways to afford your workers a better quality of life. This could come in many forms: a higher base salary, a more flexible schedule, or greater remote work options. If you don’t offer these things, another company will.
The next time you’re planning a 3% raise, note that “the average salary increase when changing jobs is 14.8%.” Also, take into account the fact the Society of Human Resource Management (SHRM) estimates the average cost per hire is just over $4,000. It might be worth giving your current employee(s) a bigger bump.
If you’re an employee… the ball is in your court. You’re not likely to be given what you don’t ask for. Don’t be afraid to talk money. It’ll do us all good.
TL;DR = Too Long; Didn’t Read
Note that this is not to be confused with happiness.
Money can buy more than stuff. It can buy time, access to high-quality health care, and experiences. In short, having money affords one freedom.
It’s a lack of compensation transparency that is greatly responsible for the gender pay gap.
The resources I’m referring to do not include our friends in the restaurant and hospitality industry where nearly 7% of workers voluntarily quit in August. A recent survey of restaurant and hotel employees found that more than 50% of workers intend to quit their jobs by the end of the year. Such an exodus would put further pressure on the adjacent wine and spirit industry and its workers.