Tradition Be Damned.

My clients and friends in Italy find it hard to believe that the United States enacted a nationwide constitutional ban on the production, importation, transportation and sale of alcoholic beverages for twelve years. I no longer drink alcohol, but I’m told if I move to Italy they will kick me out of the country if I don’t at least hold a glass of red wine at dinner. 😀

In 1933, when the 21st Amendment repealed the 18th Amendment and Prohibition ended, the alcohol industry adopted a three-tier system, separating manufacturers, distributors and licensed outlets. As such, alcohol producers are only allowed to sell their products to licensed importers, distributors and control boards, which in turn are only allowed to sell to licensed outlets, like liquor stores, bars and restaurants. The entire industry has operated under this complex system in order to ensure a legal and competitive marketplace while protecting against any future threats of bringing back Prohibition. In a quest for more growth, unfortunately, and because consumers don’t really give a hoot about an old industry’s traditions, the lines are blurring.

Bud Light has added cola and orange soda to its seltzer. Mountain Dew, owned by Pepsi, has launched an alcoholic beverage in collaboration with The Boston Beer Company. You can’t make this stuff up. Coors, a large beer manufacturer, now has a whiskey brand. All of this frightens the dickens out of the traditionalists who have held up the industry standard for 88 years.

In a hunt for their share of the $4.3 billion U.S. hard seltzer market, Pepsi announced it will use its distribution power to ship alcoholic Mountain Dew and other beers and spirits. This newcomer will destroy the status quo and challenge states to regulate what falls into what category and where each product can be sold. Regulators have already cried foul, following the announcement of HARD MTN DEW alcoholic beverage, which could be extremely confusing to younger consumers who have long recognized the Mountain Dew brand as a soft drink.

Pepsi is directly trying to sidestep the law that prevents manufacturers from distributing their own products and will tear a huge and very profitable hole in the oligopoly of beer distributors, dominated by Anheuser-Busch InBev and Molson Coors.

This same scenario is playing out in every industry. Four huge meat processors control 85% of the market in the United States. A few huge airlines, hotel brands and auto manufacturers have the same massive amount of control over their respective industries. Even the electricity industry in the United States is controlled by a small handful of very large and powerful players.

It’s happening in dentistry and the profession’s specialties just like it happened in medicine 20 years ago. It’s slowly happening to my friends and clients in the audiology space. Deregulation and consolidation always seek efficiency. But, in the words of my podcast guest and Dean Emeritus at the Rotman School of Management, Roger Martin, there is always an optimal amount of slack in any system and it is never zero.

I’m working hard to teach our members at Burleson Seminars this powerful dictum: do not allow the pursuit of efficiency and profit to cloud the importance of sustainability.

Pepsi might fly too close to the sun with their sidestepping. The regulatory consequences are steep. Have we all already forgotten that Juul paid $40 million in fines for marketing to minors? We all have short memories. That was six months ago. Does Pepsi not see the same thing brewing (pun intended) with alcoholic Mountain Dew?

In this last update of the year, you deserve something important and meaningful as a preview of what I’ll be hammering home in a big and important way next year. So here it is, Faithful Reader:

We must stop thinking something is good if it is merely enjoyable, comfortable or profitable. We must hold ourselves to a higher standard. I have nothing against happiness, comfort and profit, but we must also do what is honorable, sustainable and compassionate.

The right objectives are often in conflict with the path of least resistance and traditions aren’t always meant to be broken. Keep the main thing the main thing and you’ll live a life of foundational joy, fulfillment and abundance. Woe the day we insist all tradition be damned.