Companies are always striving to do what is good and what is right. All businesses make decisions that will ultimately benefit employees, the broader community, the bottom line, and overall financial health. All of these priorities have converged into strategies related to diversity, equity, and inclusion.
Diversity, Equity and Inclusion (DE+I) strategies have recently become a more intensified focus in the beverage industry. For example, Diageo, a spirits company, launched a new standalone business named Pronghorn that seeks to boost DE+I in the beverage industry. Pronghorn’s primary focus will be addressing Black representation in the spirits industry through entrepreneurship, recruitment, and retention programs. Pronghorn’s secondary goal is to then help new brands and emerging businesses grow through capital investment.
Social Implications of Improving DE+I in the Beverage Industry
DE+I initiatives undoubtedly have large social implications, especially within the workplace. Spending time and effort into making employees feel welcomed, accepted, and safe fosters a sense of belonging and support for minority populations. Increases in employee comfort comes with increased levels of trust, job satisfaction, productivity, learning, and engagement. In fact, inclusive companies are 1.7 times more innovative than their counterparts. This is supported by neurological research compiled by the NeuroLeadership Institute, which shows that people perform best when employees feel like a part of the team.
DE+I initiatives not only help employees feel secure emotionally, but also leads to better physical and mental health. Diverse teams aid in the creation of happy and healthy work environments which reduces employee vulnerability to stress. Workplace stress leads to many negative outcomes, and reducing said stress can lead to healthier employees, as the body and mind are not working in suboptimal conditions.
Businesses have taken note of these social benefits and are seeking to create more diversity and improve DE+I in the beverage industry. One way they have made change is by updating their own company standards. The maker of Coors and Miller Lite has committed themselves to have more people of color in its U.S. operations by the end of 2023. Another way is by investing in newer brands from diverse founders. Constellation, an alcohol brand, announced in 2018 that it will invest $100 million in female-founded alcoholic beverage companies by 2028. It hopes that by doing so women will have enough support to make headway in a male dominated industry. The company also is supporting BIPOC communities by investing an additional $100 million for wine and spirit brands founded by underrepresented communities.
Financial Benefits of Increased Diversity
DE+I initiatives, while targeted towards social change, can also have positive impacts on your company’s financial health. For Diageo, Pronghorn is aimed at boosting the standing of the Black community in the spirits industry. If the initiative is successful, it can be extremely important because the Black community represents 12% of beverage alcohol consumers. The economic goal of reaching these consumers is to generate $2 billion in economic value in the U.S.
While this may sound like a lofty goal, data actually shows that increased DE+I in the beverage industry can lead to huge financial benefits. In fact, increased gender diversity in management positions increases profitability. According to Forbes, the top 25th percentile companies for gender diversity on executive teams are 21% more likely to experience above-average profits. Additionally, culturally diverse executive teams are 33% more likely to see better-than-average profits. Overall, numerous studies have shown that increased diversity not only helps companies meet their goals but exceed them.
Studies also show that diverse and inclusive teams are more apt to be creative than teams that are homogeneous. This can result in increased market capture and retention, more inclusive sales and marketing strategies, and innovative product offerings – all of which tie to top line growth.
Establishing Your Own DE+I Initiatives
To develop your DE+I strategy and initiatives you must first measure the diversity and inclusion in your business. Organizations can launch DE+I climate surveys to better understand how employees feel about DE+I related issues in the workplace. They can also analyze the data they already have to get a better understanding of equity within the organization. Network analyses are also a great tool for understanding how people within your organization interact with one another. By collecting these different measures of DE+I, your company can better identify main areas that need improvement and create key priorities. Next, you want to strategically plan your DE+I organizational strategy. This involves defining your companies guiding principles, main goals, and metrics. By clearly outlining a strategy and putting your company’s values into actionable goals, you will be more likely to achieve them.
While these are good first steps in establishing a better DE+I culture within your company, the overall objective is to infuse DE+I into your company culture. Here are some considerations for DE+I development that are important to building a more inclusive, accepting, and healthy work environment for all:
- Emphasize need for DE+I as a core value
- Be conscious of unconscious bias (implicit bias)
- Practice empathetic leadership
- Create sponsorship programs
- Make DE+I goals actionable and measurable
For a more detailed analysis and personalized guidance on improving your DE+I strategy, contact Clarkston Consulting. To learn more about our offerings, visit our Diversity and Inclusion Consulting Insights to Action Platform.
Subscribe to Clarkston's Insights
Contributions by Maggie Wong