Last week, facing pressure from conservative activists online, Jack Daniel’s maker Brown-Forman dropped its diversity, equity and inclusion (DEI) policies The move follows a broader trend of major multinational companies (Starbucks, Lowes, John Deere, Ford) cutting or altering programs created to address systemic inequality in the corporate world. What does it mean for employees and what’s at stake for these companies down the road? 

First, let’s back up to 2020, when amidst a wave of public outcry against systemic racism, many institutions and businesses were pressured into addressing discrimination and equity. For the spirits industry, that mostly looked like companies committing to creating inclusive workplaces and sustainable pathways to career advancement, particularly for BIPOC individuals. Black investors and Black-led business development groups like Pronghorn also dove in to scale up beverage businesses. But Brown-Forman was one of the companies that made DEI commitments: 10% of short-term compensation for executives was previously linked to progress made on DEI goals and the company had set a target for a 25% increase in U.S. representation of key racial and ethnic groups across all management levels by 2030.

But today — after the Supreme Court gutted affirmative action last year — DEI programs are not going to stand up to increasing legal attacks, creating a persuasive effect and reversing “the tide of inclusivity and equity in the workplace,” according to John True, adjunct professor of law at UC Law San Francisco, who practiced labor and employment law before serving as a judge on the Alameda County California Superior Court. Also, the conservative controlled judiciary at the top is the same legal landscape that employees from underrepresented groups will likely face if they say, down the road, decide to bring an anti-discrimination lawsuit against their employers. 

Brown-Forman’s pivot mirrors other major players in Bev-Alc that have backed away from addressing diversity in the face of conservative ire. Without diverse perspectives at the table, Brooks E. Scott, who offers leadership development and DEI coaching, argues companies will make costly mistakes like putting out products that could offend certain people, and will miss out on appealing to the fast-growing buying power of minority groups.

The trend is also likely to create less engaged employees, he said. That may lead to higher attrition rates leading to time and money spent on replacing valuable employees.

“Who is going to want to come into work and put in that extra effort when they know that their career progression is actually based upon whether or not you fit into the norms of the majority group that exists in the space currently?” he said. 

Gin is one of the less popular bases for ready-to-drink cocktails, but the original team behind On The Rocks cocktails is aiming to change that— and they’re working with 90s rap icons to do it. 

🎶 Since launching in February, the team behind Gin & Juice By Dre and Snoop has been on an aggressive sales push, aiming to leverage over 30 years of pop culture relevance to build the RTD as a gateway to gin, the spirit base for any future innovations from the team.

🍑  After selling On The Rocks to Suntory Spirits in 2020, the team was tapped to craft a cocktail line that reflects the founders’ stage in life as cultural icons. They went for premium, approachable, but interesting (think flavors like apricot over black cherry). 

🍹 But the cocktail is just the first step: the team is hoping to shake up the American gin market and has brought in the rest of their former On The Rocks team to lay the foundation.

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In June, the U.S. Supreme Court struck down a decades old legal precedent known as Chevron Deference, which required federal courts to defer to the expertise of federal agencies when interpreting law and statutes. With the doctrine overturned, Boston-based law firm Nutter noted that several long standing regulations around beverage alcohol could now be “ripe for challenge.”

🥴 In its monthly “Beverage Breakdown,” Nutter noted that several rules from the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) Industry Circulars “could be at risk” and that judges will not need to “defer to the agency’s alcohol industry expertise” in deciding legal cases.

🏛️ Last month, Senators introduced a bill to codify Chevron Deference into law, but the likelihood of it passing a tightly divided Senate and Republican-controlled House is unclear.

Early-stage venture capital firm Lerer Hippeau this week announced it has added Aerflo, which provides on-the-go water carbonation, to its brand portfolio. 

🚰 Founded in 2020 by Buzz Wiggins and John Thorp, Aerflo produces the Aer1 System that turns still water into sparkling water anywhere. The product is powered by a circular, on-demand CO2 refill model.

💰 The U.S. market for sparkling water is valued at roughly $5.6 billion but is largely concentrated in single-use cans and bottles, Lerer Hippeau claims. The firm is betting on Aerflo because “it [combines] the market’s voracity for sparkling water with a prevailing desire for sustainable options.” 

It’s the end of summer (mostly) and as kids return to school, the CPG Week team is returning to some of the more quirky stories from the past couple months in a playful new quiz including discussions around butter statues, food culture celebrity biopics, Pop-Tarts and “Brat Summer. The podcast brings BevNET/Nosh Editor-in-Chief Jeff Klineman on for a wide-ranging conversation that hits on the overlap of CPG and professional sports, Mars’ acquisition of Kellanova, uncertainty of the definition of “Brat” and what a Guy Fieri biopic might look like.

Listen to the full episode on Nosh.