Be a Nike, Not an AB InBev

The?Edelman Trust Barometer ?has been telling us for years that publics are increasingly looking to businesses to address societal issues. Among four sectors—business, government, media, and NGOs—only business is seen as competent and ethical. The number of people who believe this rose in 2023 for the third consecutive year.

The Trust Barometer provides even more support for businesses taking a stand on societal issues. Sixty-three percent of consumers and employees buy or advocate for brands based on their beliefs and values, and 69 percent say having a societal impact is a strong expectation or deal breaker for job candidates.

Survey respondents in the U.S. also agree that societal engagement puts businesses at risk of being politicized. The question is, how do companies that want to meet consumer expectations address a political response?

You could be forgiven for thinking that the marketers at Anheuser Busch had Trust Barometer data in hand when they partnered with transgender influencer Dylan Mulvaney for a single Instagram post in which Mulvaney shared that the brand had sent her a single custom-made Bud Light can celebrating her “365 Days of Girlhood.”?(This was the only such branded product the company produced. It’s not available in stores or anywhere else.)

Alas, the one-post partnership was not a purposeful endeavor. The deal—a minuscule one in terms of Bud Light’s overall marketing and advertising spend—was part of a larger effort to find new markets. Sales have been slumping among one of the beer’s traditional demographics, which includes the NASCAR and WWE crowd. Bud Light’s marketing VP, Alissa Heinerscheid, told the “Make Yourself at Home” podcast earlier this year, “This brand is in decline, it’s been in decline for a really long time, and if we do not attract young drinkers to come and drink this brand there will be no future for Bud Light.”

The decision to approach Mulvaney was just one small move to attract younger and more diverse consumers to the beer in hopes they would make up some of those sales and ensure a strong business as sales to that red-state base continued to slide.

LGBTQ Marketing is Good Business

There’s good reason for companies to try to appeal to the LGBTQ community. According to a?2022 report from the Edelman Trust Institute and GLAAD , Americans are two times more likely to buy or use a brand that stands up for protecting LGBTQ rights. And?a recent Pew Research poll ?found 47 percent of adults aged 18-29 believe society has not gone far enough in accepting transgender people; only 31 percent believe society has gone too far. (The rest think it’s just right.) The average NASCAR fan—representative of those already buying less Bud Light—is 42 years old. Appealing to a younger market is not an irrational idea.

That transgender rights were not a societal stake in the ground for AB InBev was quickly evident from the feckless response to the ensuing controversy from the company’s U.S. CEO, Brendan Whitworth. Subsequent actions further eroded any sense that AB InBev was actually standing up for transgender rights.

In fact, since Kid Rock kicked off the protest and boycott with a video of himself shooting Bud Light cases with a semi-automatic weapon, AB InBev has followed up its tepid CEO response by putting two marketing executives on leave—including Marketing VP Heinerscheid—and hired former Republican Senate staffers to lobby Congress in an effort to burnish its conservative bona fides. It also released a hastily-produced TV spot designed to appeal to the political right (see the video at the end of this post).

The boycott delivered a 17-percent plummet in sales of Bud Light during the week of April 15, while sales of competitors Coors Light and Miller Light leaped 18 percent at the same time. In the three weeks since the sponsored post appeared, Bud Light sales fell 21 percent. Undoubtedly, its failure to support transgender rights dissuaded a lot of the prospective customers the brand was seeking to attract from mounting a “buycott” to offset the boycott’s impact.

Update: On May 4, AB InBev reported a 13.6 percent increase in first-quarter profits, beating analyst expectations. The Mulvaney controversy occurred in the first month of Q2, so it is too early to assess its impact.

Nike and Kaepernick

Don’t succumb to the belief that any band aligning with a polarizing cause is doomed to suffer Bud Light’s fate. In 2018, Nike inked an endorsement deal with Colin Kaepernick, the former NFL quarterback who sparked the wrath of the political right when he began kneeling at games during the playing of the national anthem to protest racial inequality and particularly law enforcement violence against Black Americans.

The blowback from Nike’s endorsement looked a lot like the Bud Light protest, including online videos of people burning and otherwise destroying their Nikes. But despite right-wing outrage similar to the anger of those upset about Mulvaney’s sponsored post, Nike’s online sales increased by 31 percent. Even though the first Kaepernick nationwide advertising campaign from Nike was significantly higher-profile than the lone Mulvaney post, supporters of the endorsement more than made up for the boycott’s impact with a buycott, making a point of purchasing the company’s products. That’s exactly what the Trust Barometer asserts: A majority of consumers buy or advocate for brands that stand up for what they believe in.

While Nike, like almost all for-profit companies (Patagonia and a few others being the exception), doesn’t do anything without an eye on its earnings, Nike was clear that its Kaepernick deal was based on its values and stood by it, energizing supporters and ensuring that the company would not only avoid losing money, it would clean up and attract a lot of first-time buyers. Weeks after the Kaepernick ad aired, while boycott videos were still prominent online, Nike’s shares were trading at $68.10. Today, a share of Nike is valued at $126.72.

Disney’s experience is different but equally instructive. After speaking out in opposition to Florida Gov. Ron DeSantis’s “Don’t Say Gay” legislation, DeSantis embarked on a campaign to punish Disney for its position, which was based on vocal feedback from the company’s own employees: They wanted Disney to stand by its value of inclusion and take a position against the bill.

Disney’s Long-Standing Values

It’s not as though this was Disney’s first move to earn the “anti-woke” enmity of conservatives. For example, a gender-neutral greeting now begins the Magic Kingdom’s fireworks show, replacing the old, “ladies and gentlemen, boys and girls.” Beyond gender issues, the company is transforming the “Song of the South” themed Splash Mountain with a “Princess and the Frog” ride and has revamped the Jungle Cruise and Pirates of the Caribbean to address cultural insensitivities. Disneyland will host a “Pride Nite” this year. The live-action adaptation of “The Little Mermaid” stars a Black actress, unleashing a torrent of hate from the right. But unless it’s just plain bad (unlikely based on early reviews), the movie will still make a bundle at the box office. (The actress reportedly got the part after she blew away her audition.)

The back-and-forth between Disney and DeSantis has continued with Disney staking out an additional high-road position: DeSantis is lashing out at Disney for exercising its First Amendment right to free speech.

Taking on Disney was a dodgy proposition from the beginning. The company employs 75,000 people in Florida, making it one of the state’s top private employers. A recent study found that Disney World brings about $5.5 billion in annual revenue annually to the state. For many Floridians, having Disney World in Orlando is a point of pride. Taking the family to Disney World is an event. There is no evidence that attendance at Disney World has suffered, and legions of Disney fans have?taken to social media to protest DeSantis’s feud .

The difference between AB InBev and Disney/Nike is that the latter made their marketing moves based on executive-supported and clearly articulated values. They analyzed the market and anticipated the impact of their campaigns, and made calculated decisions, mirroring the Trust Barometer result that says 80 percent of consumers expect CEOs to act on discrimination.

AB InBev’s Failure

AB InBev, on the other hand, had no such designs with its Mulvaney partnership, despite a DEI statement that explicitly says the company aims “to make our company as diverse as the communities we serve. We thrive when our colleagues, including our leadership, reflect the diversity of our consumers and customers, enabling us to create solutions with our brands and services to best meet their needs.” Instead, the sponsored content seems almost like an afterthought, the fallout from which caught the company by surprise. And instead of sparking a “buycott,” the company now has earned the disapproval of transgender rights advocates and the anti-trans right alike (proving, I suppose, that two sides so widely divided can still agree on something).

Even after leaving nobody satisfied, AB InBev’s stock price closed on April 28 at $64.97, up from $57.45 a year earlier, and considerably higher than its low of $44.90 in October 2022. The lost Bud Light sales in the U.S. are a drop in the bucket compared to global sales; one executive says it’s about 1 percent of the company’s overall sales. Distributors are standing by the company. AB InBev has billions of dollars in cash reserves with no significant debt repayments on the horizon. Most experts agree that the company will be able to ride out the controversy.

It’s questionable whether AB InBev could have pulled off a Nike, increasing sales by standing by its partnership with Mulvaney. Beer consumption, in general, is shifting to craft beers and hard seltzers. But it might have at least broken even if it had stood up for its proclaimed DEI beliefs rather than crater to a demographic that is already buying less and less of its product.

Of course, they could do significantly better if they made a satisfying beer, as John Oliver points out in his mock “Last Week Tonight” mock commercial (which begins at :57 of the embedded YouTube video below).

The lesson for marketers is clear, and it is?not?to avoid standing up for a company’s values or to shy away from staking a position on social issues that are relevant to the organization and/or consistent with its values. Pay attention to the Trust Barometer and the clear expectations consumers have of business, but recognize that promotions supporting a divisive societal issue need to align with values that are overtly embraced by leadership, analyzed for impact, and strategized to address anticipated protests.

In other words, be a Nike, not an AB InBev.

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