From Pariah to Mainstream: How a Trade Association Changed the Image of an Entire Industry – Part 1
In the 1970s, a combination of a surge in the number of drunk driving deaths, the rise of Mothers Against Driving and a failure to advertise on television had led to the distilled spirits industry being viewed as virtually a moral pariah and Congress and state legislatures were reacting with ever-more onerous legislation . Forty years later, the industry is considered a normal part of American life.
In this ethnographic case study I explain how DISCUS was the principal agent of that turnaround. The details of that turnaround are based upon extensive interviews with the principals which were recorded and transcribed. Direct quotes not otherwise attributed to published sources are from those interviews as well as my recollections as editor of Kane's Beverage Week and Kane's Beverage News Daily. The specific questions I seek to answer are (1) what were the conditions at the start of the period, (2) why distilled spirits did not advertise on television as did beer and wine, (3) whether the turnaround “just happened” or whether there was a strategic plan in place to make distilled spirits and accepted part of American life and if so what was it, (4) what specific actions were taken, and (5) whether luck played a role in the turnaround.
This study contributes to the professional and scholarly literature in organizational communication, organizational development, public and government relations.
Introduction
DISCUS is located in a nondescript limestone office building at 1350 Eye Street, NW, in Washington, D.C., a short three-stop subway ride from Capitol Hill. If one chose to walk, it would take about 37 minutes. It is a short eight-minute walk to the office of the alcohol beverage industry’s primary Federal regulator, the Treasury Department’s Alcohol & Tobacco Tax & Trade Bureau.
Across McPherson Square on Eye Street, the fabled address of the top Washington lobbying firms, are the offices of The Washington Post. Also across the park are the federal government affairs offices of London-based Diageo, the world’s largest spirits producer, best known for Johnnie Walker Scotch and Smirnoff Vodka, and the government affairs offices of Pernod Ricard., the French firm whose brands include Beefeater Gin, Chivas Regal, and Absolut Vodka. Other beverage alcohol lobbyists’ offices are scattered throughout Washington, D.C., and are also found in nearby Maryland and Virginia.
The proximity of both DISCUS and a number of major members to both the industry’s primary regulator and Congress is indicative of the importance placed on government relations by the industry. As Prohibition demonstrated, while all industries are concerned about government action on a variety of matters, the alcohol beverage industry is unique, having received both a death sentence and resurrection by amendments to the U.S. Constitution.
From the exterior, the building looks like any other downtown Washington building built since the 1950s. Only a small plaque on the corner of the building gives any hint that three of the building’s eight floors are occupied by the liquor lobby’s trade association. Other buildings have similar plaques, identifying the law firm or other organization that occupies the most space inside.
But an elevator ride to the fourth floor lets a visitor know he is not visiting a law firm. Immediately behind the receptionist desk is a huge display case, filled with bottles of various distilled spirits brands. Off to the left is the boardroom, which features a large, well-stocked bar. A couple of large antique posters reflecting various spirits brands hang on the wall.
Walking down the hallway or looking into an office reveals none of the standard bland corporate artwork – those ubiquitous Monet prints, for instance. Instead, there are advertising posters for liquor brands or pictures of distilleries and rickhouses, the warehouses where distilled spirits are held while they age.
The DISCUS offices used to be filled with bland corporate artwork. One of the first things retired Navy Rear Admiral Peter Cressy did when he was hired as chief executive of DISCUS was to sell the artwork and ask his member companies to donate large posters of their brands. “I want my staff to remember every hour of every day who I work for,” he told me years ago.
The reason, of course, is that DISCUS’s principal mission is to represent the interests of the producers of the distilled spirits industry at the federal level. Its mission statement explains:
The Distilled Spirits Council is the leading voice and advocate for distilled spirits in the United States.
Representing the leading producers and marketers of distilled spirits, the Council:
· advocates on legislative, regulatory and public affairs issues impacting the distilled spirits sector at the local, state, federal and international levels;
· promotes the distilled spirits sector, raising awareness and opening markets in the United States and around the globe; and
· encourages responsible and moderate consumption of distilled spirits as part of a healthy adult lifestyle based on evidence-based research and policy.
(DISCUS, About, 2021)
This is typical of most trade associations’ mission statements. They promote their industry (Braucher, 1938, 138) and promote collaboration between their members. They may also produce conferences, networking or charitable events, offer classes, publish newsletters or magazines, membership directories and yearbooks, and advertisements promoting the views of an entire industry (Florida Swimming Pool Association, n.d.)
A good mission statement guides all decision-making. One of the critical roles of any trade group is to have a clear grasp of whatever the issue may be. For the distilled spirits industry, taxes are a perpetual issue, since more than 50% of the cost of a bottle of liquor is taxes. Those taxes used to be referred to as sin taxes; if that phrase is seldom heard today much of the credit goes to the Distilled Spirits Council of the U.S.
The industry has been successful not merely in avoiding a tax increase but also in getting its federal excise tax rate reduced. One reason for its success is that over the past 40 years there has been a profound change in public acceptance of whiskey and other distilled spirits. The Distilled Spirits Council of the U.S. played the crucial role in achieving that change.
To understand how the Distilled Spirits Council led the change in the public perception of distilled spirits, it is necessary to examine briefly the history of the alcohol beverage industry in the U.S., how the alcohol beverage industry ever fell into disrepute and why beer and wine seemed to recover so much faster from Prohibition than the producers of liquor.
So, in addition to the role the Distilled Spirits Council played in changing the industry’s image, I will look first at how the Anti-Saloon League achieved nationwide Prohibition. The lessons learned from both the successes of the Distilled Spirits Council and the Anti-Saloon League in changing public attitudes toward alcohol are important to organizational communications, public relations and leadership studies.
Historical Overview
Following the Repeal of Prohibition in 1933, beer, wine and spirits all recovered nicely. Illegal activity, especially in the distilled spirits trade, during Prohibition had demonstrated a thirst for the product. World War II, which erupted for the United States almost eight years to the day following complete repeal brought a halt to the liquor industry’s marketing efforts as almost all distilled spirits plants we re- converted to produce alcohol for the war effort.
I will touch, briefly, on why the beer and wine industries recovered from World War II relatively quickly, why distilled spirits did not and how the Distilled Spirits Council finally got spirits onto a level playing field, as least in terms of public acceptance.
That beverage alcohol fell into disrepute, or that the nation ever enacted Prohibition is somewhat amazing. When the Puritans arrived in New England, the ship on which they had crossed the Atlantic carried more whiskey than water, Bruce Bustard, author of Spirited Republic: Alcohol in American History, told the BBC. (O’Brien, 2015). George Washington gave every member of the Continental Army four ounces of liquor a day. John Adams drank hard cider for breakfast. James Madison had a pint a day. (Okrent, 2010). By 1830, per-person consumption peaked at 7.1 gallons a year.
Okrent (2010) ties Prohibition directly to the suffrage movement. He notes that in the 1800s women had almost no legal or property rights. “Their husbands would go off to the saloon, drink away the family money, come home and beat the wife and mistreat the kids.” Women wanted the vote, and one reason they wanted the vote was to ban the production and sale of beer, wine and spirits. They viewed it as a self-protection measure.
There were two key nails in the spirits industry’s coffin. The first was the founding of the Anti-Saloon League, led for much of its existence before Prohibition by Wayne Bidwell Wheeler, whom Okrent calls the “genius behind the Prohibition movement.” The second was the adoption of the 18th Amendment to the U.S. Constitution in 1913, which authorized an income tax and reduced the reliance of the Federal government on alcohol excise taxes.
Wheeler was a political genius whose methodology has been replicated by other activists. Unlike Frances Willard of the Women’s Christian Temperance Union (WTCU) which diluted its message by embracing other issues from government ownership of utilities to vegetarianism, Wheeler focused on just one thing: the abolition of alcohol from American life.
It should be noted Prohibition is not at all the same thing as temperance. Temperance is the use of alcoholic beverages in moderation. The U.S. Government’s Dietary Guidelines for Americans (2020) defines moderate use of alcohol as one drink a day for women, two for men. Total abstinence is complete non-indulgence in alcohol (Hogan, 1985, p. 3), and is a matter of religious discipline for some, including members of the Church of Jesus Christ of Latter-Day Saints, Seventh-Day Adventists, and adherents to Islam. For others, especially those who have in the past over-indulged, abstaining from alcohol is simply necessary for personal survival.