Canada’s Prime Minister Mark Carney recent speech to the World Economic Forum in Davos has been welcomed as one of the pivotal and most important political speeches of recent years. Which admittedly is not a high bar to reach.
In a nutshell he warned his fellow global political leaders that we can no longer rely on the world’s super powers to act in all our interests. Not when they are instead focused on self interest, battening down the hatches, and doing what they can to protect and grow their own positions rather than act for the benefit of the common good.
(Mark Carney's inspiring speech in full to Davos is well worth lisenting to)
Or to paraphrase he said: “We live in an era of great power rivalry - the rules-based order is fading. The old order is not coming back. We shouldn’t mourn it.”
Instead he set out how middle ranking countries, like Canada, need to work far closer together to forge a new future that no longer relies on what the super powers might get up to. A new way of collaborative thinking - and action - that has huge potential for those countries willing to act and do things differently.
Which you might think is a far cry away from the slings and arrows of the global drinks industry. But dig a little deeper and there are a lot of parallels to be drawn.
For it is not a big jump to swap the big super powers striding the world stage with the major multinational drinks companies that dominate the sector they are supposed to be leading and setting the standards and benchmarks for.
But what have our biggest and most powerful drinks multinationals done for the benefit of the rest of the industry recently? Not a lot. Instead they have, perhaps understandably, been distracted by the huge global downturn in the amount of people drinking, the supply chain and cost implications of major global conflicts like the Russia and Ukraine war, and the knock-on effect of trade tariffs around the world, particularly between two of their most important markets - the US and China.
All of which have combined to seriously knock sales, revenues, profits and, perhaps most importantly, rattle their share prices and shareholders that ultimately keep them at the very top of the drinks power table.
The global situation facing these drink giants is bleak, and is set to get a lot worse before it improves. Figures from America this week show how stark the situation is with some $22 billion of unsold stock stuck in the US drinks supply chain, a large proportion of which lies on the books of the major drinks multinationals.
Self interest
The drinks industry's biggest multinationals are putting their sharesholders and self interest first in such troubled times. Picture istock Torsten Asmus
So it is perhaps not surprising they are less concerned about what they are doing to help the rest of the industry in such troubled times. Why should they not put their own self interests, and in particular those of their shareholders, first and above the wider needs of the industry?
Well, if they did not wield so much power then it might be a little more forgivable. If their global distribution networks weren’t so dominant that every back bar, or drinks aisle was not awash with their products.
All of this is less of a concern when there are spoils to be had further down the drinks chain. But the drinks sector has never been more under attack from political intervention, geo politics, restrictive trading tariffs, the rise of the anti-alcohol, neo-prohibitionist movement and a younger generation who prefer social media, gaming, and wellness to a night down the pub.
That’s why we need our big drinks super powers more than ever to be standing up and fighting on all our behalves. We need them to put their corporate heads above the parapet and speak out. To actively court the national and international media and put the case for the drinks industry and lead the fight back against all the pressures and brickbats it is under.
They are the business leaders that national TV news, radio and newspapers want to talk to. They don’t want to talk to trade bodies, they want to hear from the owners of the brands the average consumer is buying.
But when it comes to speaking out about damaging trade tariffs, increases in duty, national insurance, business rates etc our biggest and most powerful drinks multinationals are silent and nowhere to be seen.
No doubt they will have their lobbyists and strategists working away behind the scenes in Whitehall and Washington and beyond, but we don’t know what they are doing because they don’t tell us. They don’t engage with the industry they ultimately control and dominate.
Most of the major multinational drinks companies will not be at next week's Wine Paris with their own corporate stands or taking part in panel deates and sharing their leadership with the sector
Apart from a few of their brands most of the major drinks multinationals will, once again, not have a major presence - in terms of having a corporate stand or influence - at Wine Paris or ProWein.
Let down
It’s hard to imagine any other industry that is being let down quite so badly by its most powerful companies. Imagine going to the world’s biggest car show and not seeing any of the biggest car companies there? Or a global tech conference and not having the likes of Amazon, Google or Apple take part?
But that is what the drinks industry has to put up with. Companies that dominate the world stage but hide behind their corporate towers, doing what they can to protect their own revenues and grow their own sales.
All of which has a negative impact on the rest of the industry. Particularly as we look to these businesses for the innovation, the new trend-setting brands and products that are going to help all of us do better.
But when was the last great brand any of these multinationals created from scratch that have gone on to reshape the industry as a whole? It is all very well throwing billions of dollars buying up an already successful brand but what are these multinationals doing about creating new brands themselves? Even Diageo has now pulled the plug on its start-up business incubator company Distell Ventures.
Where have all the brave, edgy, society shaping advertising gone that made so many of their brands famous in the first place?
As advertising legend Sir John Hegarty says: “To succeed in creativity you have to constantly look for opportunity. As soon as you chase money your career will go into decline.”
Big vacuum
All of which, as Mark Carney so eloquently put it, leaves a huge vacuum for other drinks companies to fill. There are massive opportunities for the next two to three tiers of drinks producers, suppliers, importers, distributors and retailers to stand up and do what our superpowerful drink companies can’t, or won’t do.
A record 60,000 drinks professionals from all over the world will make their way to Wine Paris next week. They are the stalwarts of the wine and spirits industry, the worker bees that make this such an exciting, dynamic, fast-changing sector to work in, despite all the headwinds and obstacles that are thrown at it.
The door and floor is open to any of them, and in particular the Carney-type sized companies, if we can call them that, that are willing to step in into this power vacuum and start making waves of their own. To start setting their own agenda. To speak up and make bigger names for themselves
If, for example, you are named as one of the Top 100 Most Influential people in the UK drinks industry then you have an excellent platform to not just shine in your own company, but speak out and stand up for the industry as a whole.
Yes, the temptation, particularly against the toxic backdrop of social media, is to play safe and keep any cards we have close to our chest, but where is that going to get us?
New business leaders
The drinks industry is crying out for new business leaders to step up and speak out and show the way forward. Credit istock Irina Mordvinkina
The drinks industry is crying out for real business leadership. For new faces and voices prepared to think and act differently. To offer new ideas and ways of working that we can all benefit from. We also need them to step forward and share them.
Social media and platforms such as Linked-in and Substack have given us all a voice and you don’t need a big corporate HQ and glamorous PR agency to help you use it. If you have something to say then get out and say it. If you have passions to share then don’t hide away assuming someone else is going to say it for you. They won’t.
The drinks industry and the hospitality and retail sectors it serves are all at a crossroads. We all know how tough trading is and how many issues, regulations and obstacles there are in our way, but we all have a collective responsibility to stand up and do something about it.
If the most powerful bosses in our biggest multinationals are not up to the task then the opportunity is there for the less corporately confined, more independent, flexible, dynamic and braver operators to step up.
If you think that sounds like you, there has never been a bigger and better opportunity to make the most of it and help the drinks industry, and the part you work in, go to an exciting new level.
* If you would like to share your views on what steps the drinks industry needs to take to grow and proser then please contact Richard Siddle on richardsiddle5@gmail.com.
