Greg Hughes on how Suntory plans to revive global spirits sales

The once-reliable business of selling alcohol to the world’s drinkers has been looking tougher of late. Years of “premiumization,” in which consumers paid up for higher-end versions of spirits companies’ products, were followed by a pandemic boost to consumption at home.

The picture for the industry since then has been more sobering. Organic net sales were flat for Diageo in its latest quarter, while Pernod-Ricard reported a 7.6% decline. Some analysts have blamed inflation’s impact on household savings for this more temperate mood, but others see the trend as a warning that young consumers may be more abstemious than older generations. That’s not Greg Hughes’ view. The CEO of Suntory Global Spirits, the Japanese-owned owner of Jim Beam, Maker’s Mark, Yamazaki, and Hibiki, sees growth rebounding in the next two years. It will be driven by consumers outside the industry’s traditional markets, he believes, and by a growing appetite for flavored spirits like Jim Beam Pineapple and “ready to drink” brands like Suntory’s -196 vodka seltzer.

Here’s how he sees Suntory’s “Yatte Minahare” philosophy building a business that can outperform a challenging industry.

This interview has been edited for length and clarity.

Andrew Edgecliffe-Johnson: What are you expecting for 2026?

Greg Hughes: Global spirits were, by and large, flat in 2025, but I think 2026 will be slightly better, with global growth probably in the 1% range. We’re working our way out of some of the cyclical challenges, most notably inflation. Disposable income is the biggest single driver of beverage alcohol consumption, so as long as we’re in this inflationary period, that is a cyclical headwind. I think we’ll come out of that, probably towards the end of 2026, going into 2027 and 2028, and the category will start to normalize, probably back to more of a 3% to 5% global growth rate over time.

I define the structural challenges as a “who, where, and how” problem. There are just fewer consumers of legal drinking age in developed countries, [while] you’ve got a stronger legal drinking age population in places like Latin America, India and emerging Asia. There was a lot of fear two years ago that Gen Z is adopting alcohol at lower rates than before. Actually, the data coming out now shows pretty clearly that they’re drinking at the same rates as previous generations. There are just fewer of them, and they aren’t living in the same places.

Do you think that apparent drop in Gen Z consumption can all be explained by the demographics?

This generation started drinking and socializing differently because [of] Covid, but now you’re seeing adoption of beverage alcohol at similar rates as before. Things like cannabis and GLP-1s aren’t material to the structural challenge. The big material drivers are inflation, which very much affects this generation, and the size of the populations and where they’re at. How they’re drinking is different as well: You see categories like spirits-based [ready-to-drink brands] driving a ton of growth.

How do you build an innovation culture in a company like Suntory Global Spirits?

I think [it requires] three things. One is always having a challenger mindset. The second is not being afraid to have bold ideas and take risks and create a learning culture, because you will fail when you’re innovating. And then, third, we have the benefit of having a private shareholder with a very long time horizon. So we can dream a little bit bigger and take more risks as long as we’re learning as we go.

Tell me more about the challenger mindset.

Suntory has a philosophy called “Yatte Minahare.” It roughly translates as “go for it,” but it’s a little bit deeper than that. It’s also this idea of setting such a bold view that it forces you to think differently. So setting that bold goal is part of the culture, but also not being afraid to fail and then learn from those attempts.

Suntory is very comfortable with us having returns in the near term that are probably lower than maybe some public companies would demand, as long as we deliver what we say we’re going to deliver. So if it’s a 20-year journey, it’s made up of 20 years in which you deliver what the expectations are, or you learn from what didn’t work, and you course-correct along the way. Taking a long-term patient view doesn’t mean not having rigor and discipline.

We talk about a PDCA cycle — plan, do, check, act. So the first thing we do after we launch a new product is go out and start talking to customers about how it’s being received. You’re planning, you’re doing, then you’re checking. And then, based on that knowledge, you act and adjust.

You have worked for some of the great consumer products groups in your career. Which ones shaped you most as a CEO?

Procter & Gamble teaches you a level of operating discipline and rigor that made it a great place to start as a new college grad who didn’t really know how to work. Kraft in the early 2000s was an incredible incubator for learning how to do brand-driven consumer demand. [Working for] Bell, I got a crash course in general management. And being a Peace Corps volunteer in Romania taught me how to be resourceful and how to adapt to be successful in a different place. So I’d say P&G for structure, Kraft for classic brand building, the Peace Corps and Bell for agility.

How do you create that kind of culture within Suntory?

We think that we can be better through a relentless commitment to quality, making sure that quality is relevant at the point of consumption, and making sure we’re world-class in our executional standards. And then [Suntory has a] long-term commitment to doing business the right way, with the idea of growing for good, and our commitments on responsibility and sustainability and inclusivity.

If you do that right, it all comes together [into a] winning culture, where people are excited about being the best, curious about what consumers want, and not afraid to take chances to learn and create and innovate products that will meet those consumer needs. So that’s what we’re trying to do. It’s obviously a long journey, and against a backdrop of a challenging industry.