Are ethics calling time on happy hour?

Suddenly ‘conscious’ alcohol brands are everywhere, mirroring the rise of wellness into the mainstream. But they already face an uncertain future.

The desire for clean living is now touching most consumer-facing industries – even foam-textured vegan toothpaste and regenerative foodware have become a thing. And in recent years, alcohol has proved no exception. A substantial proportion of consumers have changed their outlook on the kinds of alcohol they are prepared to drink – and it has little to do with taste.

Recent surveys indicate that around 80% of shoppers are environmentally minded, with those in their early 20s willing to pay a premium for sustainable products. But when it comes to buying booze, do consumers really care about a brand’s production ethics? Are conscious alcohol brands doomed to fail? After all, 56% of millennials claim to be ‘mindful drinkers’, while the generation below them drink 20% less alcohol.

Between excessive water waste, inefficient use of agricultural land, glass production and the carbon cost of shipping, the alcohol industry is being held up to scrutiny by the new wave of younger drinkers. In turn, ‘conscious’ alcohol brands are suddenly everywhere. There’s Batiste Rhum in the French Caribbean, which focuses on regenerative practices. Meanwhile, the team at whisky distillery Nc’nean, in Scotland, forage all ingredients to minimise damage to natural habitats.

Small Beer, a London-based B-Corp, claims it has reduced the amount of water required per pint of beer by up to 85%. In Canada, the Dairy Distillery somehow makes vodka out of excess lactose from dairy farms; in San Diego, Misadventure Vodka’s core ingredients are unsold baked goods. Even agave farmers are getting in on the act: Patrón Tequila in Mexico insists on fair pay for all employees.

For alcohol industry veterans like Mark Byrne and Tristan Willey, an ethical alcohol brand is one that ensures full transparency and traceability through its supply chain. The pair recently launched Good Vodka, processing waste coffee fruit from Guatemalan farms. ‘Tristan and I used to think of ourselves as distillers,’ Mark says, ‘but we realised a year in that we were actually supply chain managers.’

Carbon negativity and offsetting are the focus for Russ and Gemma Wakeham, the founders of Two Drifters Distillery in Exeter, south-west England, which captures the carbon dioxide emitted in the distillation process and turns it into stone to be buried back into the ground. Similarly, wine producer The Uncommon sources everything for its canned wines within 50 miles of its base in south-east London, working with farmers to reduce wastage and intensive farming, which is normalised in the sector.

These ethics are all well and good, but they come with a cost markup that is usually pushed on to the consumer at purchase. The teams at Good Vodka and Two Drifters are aware of the financial implications of building an affordable, conscious brand. ‘Everyone cares about ethics,’ says Mark, ‘but it’s the extent to which they care about it that is questionable.’

While research does increasingly indicate that consumers take brand purpose into account, that still leaves a substantial portion who are apathetic. And while younger consumers are driving the rise of conscious alcohol culture, with the digital knowhow to spot unethical brands, it’s the generations above them who not only have immense spending power but remain the core target market for the major alcohol companies.

‘Between excessive water waste, inefficient use of agricultural land, glass production and the carbon cost of shipping, the alcohol industry is being held up to scrutiny by the new wave of younger drinkers.’

What’s more, in an economic downturn, values-driven shopping tends to be the first that’s ditched. As such, conscious alcohol brands are facing an uncertain year ahead; between higher price points and the difficulty of communicating about their ethics, they need to have something else in their arsenal to appeal to the masses. ‘The Two Drifters bottle doesn’t scream out about our carbon negativity,’ Russ says. ‘In fact, we sell on the basis of being a British-made rum.’

Henry Connell, co-founder of The Uncommon, came into the wine sector having not been deeply embedded in it before launching his brand. He quickly saw just how wasteful the industry was, with grapes barely being used to their full juice potential and new glass being much cheaper to produce than recycled glass. ‘I wasn’t institutionalised by the industry, so it was easy for me to point out holes in the process.’

Today, global alcohol brands are hearing this rallying cry, with some of them committing to ethical supply chains. But still, the major global companies have the luxury of picking and choosing which aspects of an ethical supply chain they focus on. Mark, having worked as a consultant to the alcohol industry, saw only skin-deep action. ‘Spirit brands don’t want to own up to their agricultural origins, so instead they focus on the elements they are proud of, and obscure the ones they don’t want consumers to know about.’

In many ways, all of the new conscious alcohol brands can only afford to be truly conscious while they’re still small. Though this is not an excuse for inaction, multinational brands will find it difficult to retrofit existing global supply chains with better processes. Changing ingredients, recipes and methods also risks messing with iconic tastes – and in turn with consumer loyalty. For smaller brands producing smaller batches, which are inherently less energy intensive, renewable energy sources are a good option. As they grow their operations and scale up, powering their distilleries using fossil fuels might become the only option.

Sales of ethical food and drink hit £8.2bn in 2018, while fair-trade alcohol sales totalled nearly £87m in 2017 – around 10% of the whole alcohol category. But it’s difficult to put a monetary value on the growth of conscious alcohol brands, because ethics don’t necessarily sit neatly in one particular basket: the ethical food-and-drink market only includes the brands that have deliberately positioned themselves that way, discounting the ones that don’t necessarily shout about their ethics but have them nonetheless.

The trend of clean everything is shifting into new sectors every day. But with middle-aged and older consumers making up the vast majority of alcohol sales, conscious alcohol brands need to find a way to extend their message to them. If not, they risk facing a sobering future by relying on a demographic already drinking less than ever before and without the majority of the spending power.

This article was first published in Courier Issue 38, December/January 2021. To purchase the issue or become a subscriber, head to our webshop.

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