We all work, to one degree or another, in a global business environment. Despite the prevailing political winds in many western countries, globalization is inexorable and accelerating.
This trend is a challenge as well as a huge opportunity. One very tangible, executable strategy for responding to globalization is workplace diversity.
Diversity isn’t just a ‘feel good’ CSR (Corporate Social Responsibility) buzzword; it’s a key driver for growth and profitability. According to leading consulting firm, McKinsey, ‘Awareness of the business case for inclusion and diversity is on the rise. While social justice typically is the initial impetus behind these efforts, companies have increasingly begun to regard inclusion and diversity as a source of competitive advantage, and specifically as a key enabler of growth.’ A McKinsey study found that, ‘Companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation.’ The study also found that, ‘Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability.’
Diversity means many things: placing women in positions of authority (and paying them on the same scale as men), devolving responsibility to younger employees, hiring staff of different sexual orientations and, of course, making a deliberate effort to hire people from diverse cultural backgrounds and nationalities. The benefits are numerous: better communication with global customers, more insights into changing markets and better understanding of evolving demographics of consumers.
In the US, for example, Baby Boomers are aging out of their prime wine consumption years. New wine drinkers are younger and more diverse. According to a Deloitte study, ‘Millennials and Gen Zs will patronize and support companies that align with their values. Younger generations are putting their money where their mouths are when it comes to supporting businesses that make a positive impact on society. Many say they will not hesitate to lessen or end a consumer relationship when they disagree with a company’s business practices, values or political leanings.’ It’s easier to connect with younger and more diverse target consumers if you have a team that can relate to those consumers. And diversity in the workforce is an important value for many young people.
According to Silicon Valley Bank research, ‘As millennials age and become more substantial in the workforce, they will gradually spend more on wine. At the same time, retiring boomers will move down the price ladder and into more-modest bottle prices as they also pull back in their volume purchased. In the next 10 years, there will be a price range for premium wine sales where the cohorts meet; that sweet spot will grow and become important to all wine companies. Our forecast is that the millennial cohort will surpass the Gen Xers around 2026 to become the largest fine wine-consuming generation.’
In the US, wine consumption is not only becoming more diverse by age group, it’s also becoming more diverse by ethnicity. A recent Vinepair article questioned why the wine industry is largely overlooking the $1.2 trillion buying power of African-Americans. Having a diverse workforce makes it less likely that a wine company will ignore a particular demographic that may represent a huge business opportunity.
In New York, workplace diversity is virtually inevitable given the heterogenous nature of the New York metro area workforce. At Colangelo & Partners (headquartered in midtown Manhattan), for example, we have 14 different nationalities represented in a 52-person workforce. We recently did a project for an Icelandic governmental agency, ‘Iceland Naturally.’ Our agency team was led by an Icelander and staffed by a woman of Indian nationality and an Italian woman. While this diversity is a natural outcome given our location, it’s also the result of a deliberate decision to diversify our workforce. Given that our business is approximately 75% international, the cultural diversity allows us to connect to and communicate with our clients both linguistically and culturally as well as better understand their business practices.
In wine country, cultivating diversity takes a more concerted effort but there are tangible steps to take such as collaborating with international internship programs, sponsoring work visas or recruiting promising staff from export markets. For the wine industry to continue to prosper, this trend toward diversity — in consumption and in the workforce — needs to continue, and wine industry leaders need to help accelerate it.