In a climate of DEI backlash, drinks corporations are quietly reneging on their 2020 promises. What does this mean for the future of inclusivity in the beverage business?
In January 2023, Erisse Peterson was hired as the head of community for a startup Napa wine brand. As part of her work, she launched a scholarship for historically underrepresented groups in the industry. The company positioned her as the program’s face “because it would be more digestible to have a Black woman speaking on diversity,” she says. It was a hit. “We were generating a lot of interest in our brand.” Yet, two weeks after the first scholarship cohort began in August last year, Peterson’s position was eliminated.
“The CEO said, ‘This is not performance related. We have to reallocate our resources.’ I was the only person to be laid off. I was the only person of color in the company,” Peterson recalls. “I had tried to help marginalized communities and felt punished for it.” The scholarship has since been removed from the company’s website.
Afterwards, Peterson sought to start a diversity, equity, and inclusion (DEI) consultancy. “But I noticed anti-DEI rhetoric on the internet, so I reached out to other DEI consultants, and they let me know we are in the wake of this anti-DEI war,” she says. “Companies were slashing DEI budgets and annihilating DEI teams. Consultants were pivoting to other careers. I pitched and got no response. This was the norm. Companies are not returning anyone’s emails.” In October, Peterson took a full-time role as the global social media manager for Lyre’s Spirit Co.
Peterson’s experience is emblematic of the tenuousness of DEI work in the drinks world today. In 2020, propelled by the Black Lives Matter movement after the police killings of George Floyd and Breonna Taylor, the industry took stock. Activists called out discrimination. Companies launched initiatives and funded new nonprofits.
Now, the winds have shifted again. Many nonprofits continue their work, and there’s energy at the grassroots level, as organizations like [ABV] Ferments and The Vinguardgather diverse, next-gen professionals and consumers to build an inclusive industry. But there has also been a backlash. In 2023, the Supreme Court struck down affirmative action in higher education, and anti-“woke” activism has snowballed from there, attacking diversity programs across industries.
With major industry players eliminating DEI programs altogether and funding cuts across the board, there are ramifications for the plethora of initiatives launched in 2020. Given difficult financial times for the beverage alcohol industry, and with a consequential election approaching, how committed are legacy drinks companies to the DEI work they trumpeted nearly five years ago? SevenFifty Daily spoke with advocates, academics, and executives about the current state—and hoped-for future—of DEI in drinks.
A More Difficult Landscape for DEI
“Since 2023, 81 anti-DEI bills targeting college programs have been introduced in [more than] 20 states and Congress,” says Maria Calvert, the cofounder of Hispanics in Wine and Spirits. “That trickles down into our industries. Companies are cagey because we are in a polarized nation.”
This polarization was on full display in the boycott of Bud Light by anti-queer consumers over a 2023 social media campaign with trans influencer Dylan Mulvaney, which crashed the beer’s sales by nearly a third.
This year, following an aggressive anti-DEI pressure campaign by far right activist Robby Starbuck, leaked emails revealed that Brown-Forman and Molson Coors had scrapped their DEI programs and ended their participation in the Human Rights Campaign Foundation’s Corporate Equality Index, which tracks LGBTQ+ policies and initiatives. (Both Brown-Forman and Molson Coors did not respond to SevenFifty Daily‘s request for comment.)
Darwin Oniyx Acosta, the founder of Co-Fermented, which facilitates queer representation in the wine industry, isn’t surprised: “If you’re limiting queer people’s rights, you’re going to create a pause on the DEI efforts of everybody else.”
Many drinks brands continue to support diverse community initiatives and nonprofits. But within corporations, DEI is waning. As alcohol sales slump, publicly traded companies are especially vulnerable to stockholders’ anti-DEI demands, and DEI programs are getting axed in the name of cost-cutting.
“The industry is experiencing challenging times due to excess inventory, inflation, and people not going out as much, so we have been witnessing cuts,” says Deborah Brenner, the founder of Women of the Vine & Spirits, which works with corporate members to advance the role of women across the beverage alcohol sector. “DEI is seeing budgets and departments being cut. That is troubling because, to quote Mother Teresa, ‘No money, no mission.’”
The cuts, say advocates, are misguided. “Companies are having problems with attributing DEI to profitability,” says Peterson. “It’s a cop-out because there are ways to track the performance of DEI initiatives. And studies show that more equitable workforces lead to higher productivity and profitability.”
McKinsey, Harvard Business Review, Deloitte, and Boston Consulting Group have all established as much. But, “when things get hard, people revert to what they know, which is the wrong, bad way that got you in trouble in the first place,” says Alicia Towns Franken, the executive director of Wine Unify, which fosters wine education for underrepresented minority groups.
An Industry-Wide Reversion
All of this has left diverse drinks pros feeling betrayed. “Some people of color felt they were used to check a box,” notes Cramoisi Vineyards’ Sofia Torres-McKay, who is also the cofounder of AHIVOY, which provides professional development to vineyard stewards.
“People expected longevity, but it fizzled out so fast. To live in this country, you must have hope because, otherwise, it will incinerate you,” says Tahiirah Habibi, the founder of The Hue Society, which increases Black, Brown, and Indigenous access to the wine industry. “You also have to manage expectations. Don’t mistake a moment for a movement.”
Monique Bell, Ph.D., a marketing professor at California State University, Fresno, who studies Black wine entrepreneurs, agrees with Habibi’s assessment. “Many Black people in business realize there are limited points where you have these opportunities. But then there is this recursive regression,” she says. Not only that, but the reason for the opportunities was problematic to begin with. “People talk about survivor’s guilt: ‘We watched a person expire, and now you want to support me.’ It’s appreciated, but why did it have to get to this point?” says Dr. Bell. “Now we are seeing interest waning, so it’s like, please, don’t do harm. Don’t take away the bare minimum that we do have.”
The presidential election, everyone agrees, will push DEI one way or the other. “If [former President Donald] Trump is in office, we’re going to see more leaning into comfort for white-dominant culture in workplaces,” says Akilah Cadet, Ph.D., the CEO of the DEI consultancy Change Cadet and the cofounder of the Diversity in Wine Leadership Forum. “Hopefully we get Kamala Harris in office, we see some systems change, and we learn that leadership doesn’t have to be the white guy. When [former President Barack] Obama was in office, there was a direct correlation to Black people starting businesses. We know it can have that profound impact.”
Acosta agrees. “The parties are so drastic with what they want to do with DEI that the outcome can either be good or terrible,” they say. “The wine business and its bigger conglomerates with so many resources need to find ways to dismantle these older systems that don’t work for them anymore.” How they do that, according to advocates, comes down to their workforce and leadership.
Embedding Diversity in the Workplace
Back in 2020, “It was, ‘Let’s hire a diversity officer who makes sure we stay in line,’” says sensory expert and educator Hoby Wedler, Ph.D., who consults on accessibility and inclusivity. “But it’s not like a boardroom full of 60-year-old white males can just sit back and relax after writing a press release saying, ‘We did it.’ There are very few brands that said, ‘We are going to change our DNA and embrace that diverse team.’”
As J. Lohr Vineyards & Wines‘ chief brand officer and co-owner Cynthia Lohr says, “DEI should be not something that can be taken away as a line item. It has to be embedded into the fabric of HR culture.” At J. Lohr, many changes have been cultural and basic, such as integrating Spanish into employee communications and celebrations, or launching social media campaigns featuring underrepresented workers.
“You have to ask yourself, what is the ROI [return on investment] of employees that feel like they belong and bring full, authentic selves to work?” says Brenner. “They’re calling out sick less frequently, they’re more content in their jobs, they’re willing to speak up in meetings so you’re getting diversity of thought. When you have well-being in your employee base, you have it in your business.”
One pervasive DEI initiative has been employee resource groups (ERGs) for underserved demographics. Lynn House, the national spirits specialist and portfolio mixologist at Heaven Hill Brands, sits on the boards of several ERGs, which are confidential and run by employees. “That’s how growth happens, with safe spaces,” House says.
While declaring it’s “removing our quantitative workforce and supplier diversity ambitions,” even Brown-Forman is keeping its ERGs. But cultural inclusiveness can’t take the place of equitable practices in pay, promotions, and hiring.
For hiring, Jackson Family Wines partners with Republic National Distributing Company(RNDC) on Accelerate, a sales leadership development program for recent college graduates designed “to incorporate diverse perspectives, backgrounds, and experiences into our sales team, thereby cultivating the next generation of leaders who will contribute to our company’s growth,” according to Erika Hopkins, RNDC’s corporate vice president of culture and corporate social responsibility.
RNDC operated a similar program with Brown-Forman, which also co-ran the Nearest and Jack Advancement Initiative for diverse candidates. It’s uncertain whether those partnerships will continue.
The Need to Diversify Leadership
Despite the importance of internships, “what true DEI looks like is decision-makers,” says Habibi. “Who is in those rooms? Is it authentic representation?”
“A lot of companies say they have diversity, but that might mean entry level. We’re not getting them elevated into those [leadership] positions,” adds Brenner. McKinsey calls this the broken rung. For every 100 men promoted across all industries last year, only 91 white women were. For women of color, it was 73, down from 82 in 2022.
Battling the downward trend, the investment and recruitment firm Pronghorn has placed 116 Black drinks executives since 2022. “Black Americans make up 12 percent of alcohol consumers but only two percent of leadership,” says Pronghorn cofounder Erin J. Hall. “This disparity highlights not only an employment gap, but also a lack of diverse representation in decision-making roles within the industry, underscoring the ongoing need for improvement in representation at the highest levels.”
It’s a catch-22. Brenner says that leaders tend to hire people who look like they do. If there are no diverse leaders to hire more diverse leaders, how will the demographics change? “We always hear this reason of the pipeline,” says Bell. “Companies say, ‘We don’t know where to find Black or Latinx business people.’ But even when presented with that pipeline, they are still resistant to it.”
Yet, companies with gender diversity on executive teams have a 25 percent greater likelihood of financially outperforming their less diverse peers, and those with racial diversity have a 36 percent greater likelihood. With the maturing of Gen Z, a generation more racially and ethnically diverse than any before, those numbers will increase. “If you don’t understand a community’s culture, how we eat, drink, and function socially, you will never reach that demographic because you haven’t hired the right executives in marketing, sales, and across the supply chain to help figure out your strategy,” says Calvert.
That takes training. Hopkins says RNDC’s executive training includes a standard called Foster Diversity and Belonging, “a fundamental aspect of the skill set necessary for effective leadership.” It also takes time. “Our leaders go through DEI training, so recruiting is through that lens,” says Jackson Family Wines’ CEO Rick Tigner. “But we tend to promote from within, so it takes a minute to add diversity.”
Still, legacy C-suite executives have much to gain from the effort. “What’s in it for the tenured leaders who have been in their respective posts for many years? Engagement, less turnover, productivity—the holistic bottom line. People wed to the mission, coming to work every day,” says Lohr. “Who doesn’t want to work around happy colleagues who are giving their best?”