It’s Just Beer, It’s Not a Cause

I like the free market. So, when Anheuser Busch decides to hire a transgender influencer to promote Bud Light I question the taste of the influencer, but not the right of the company to ask her to influence. When Disney takes a stand against a Florida law that restricts the teaching of gender identity to young kids, I don’t fault Big Mouse for doing what it thinks it needs to do. And when lots of companies pursue Environmental, Sustainability and Governance (ESG) goals at the expense of shareholders I’m not here to tell them they’re wrong.

But the great journalistic defender of the free market has taken them all to task. That’s right. Not a week goes by when the Wall Street Journal editorial page won’t disparage “woke capitalism.” But my read on this stuff is that companies are always looking to capture young consumers because the children are the future of profits. Social justice initiatives are high on the list of young people and so companies want to appeal to them just as they’re forming their life-long brand loyalties. There’s also a labor shortage and young workers are interested in working for companies that line up with their values.

So, while I’m hardly hard-left myself, it seems to me that the Journal is placing its own irritation over all things woke over its reverence for good old free market capitalism.

But here’s the thing. Even from a free market perspective, going too fast on the social justice stuff doesn’t look like such a grand idea. This is a right-center country and, faced with a choice between views that are too conservative or too liberal, most Americans will go right.

That very same Wall Street Journal ran an oped (not an editorial) recently that made a valid point along these lines. Anson Ferick, a financial consultant, argued that a company like Ben & Jerry’s does very well by taking hard-left political positions because that has been part of its brand since the two hippies formed the business back in 1972.

The problem with Bud Light or Disney is that hard-left politics is not only not part of their brand identity, but it’s actually offensive to a large swath of their customer base. Ice cream eaters would expect Ben & Jerry’s to be in flavor (see what I did there? flavor?) of defunding the police. But nobody expected Bud Light to be on the front lines of transgender politics or Disney to be manning the barricades against the “don’t say gay bill”, which by the way, didn’t say that at all.

And Ferick reports that the companies have paid the price. Of Disney and their opposition to the gender instruction bill he writes:

When Disney announced its opposition to the bill in 2022, the majority of its customers disagreed. Disney’s public approval rating cratered to 33% in 2022 from 77% in 2021. Customers spoke with their wallets. The company’s streaming service, Disney+, saw canceled memberships, and attendance at Disney theme parks suffered. The company’s stock remains depressed even after it swapped in new leadership.

And Fortune reports that Anheuser Busch InBev’s revenue fell by a whopping 10.5% in the second quarter. The company says that the bleeding has stopped, but how long will it take to recover what they’ve lost in market share? Will they ever?

My own view is that companies are primarily in business to make money. If teaming up with a transgender influencer sold more beer, than it would have been the right thing to do. If opposing the Florida legislation meant more business for Disney, well then, bless ’em.

But the final judgement for any strategy in the marketplace is whether or not you succeed in doing what you’re in existence to do, which is to make a profit. There’s a whole, massive nonprofit sector out there fighting for all kinds of social justice and environmental causes. Let ’em do their jobs. As a consumer of causes, I can decide which nonprofits’ work I want to support. But as a consumer of stuff. I don’t want my choice of, say, beer confused with some aim that has nothing at all to do with hoppiness. I don’t want to have to catch a chill in the beer cooler while I try to decide if I like both the beer and its cause. I just want to buy beer. Social activism does not have to permeate every nook and cranny of society. We need activism free spaces.

Still, I do not take the view that companies should lay off politics entirely, just that whatever they do, they shouldn’t pretend to be something they’re not. A for-profit company is not a social justice nonprofit. If some political stance works to sell what they’re making, as it does for Ben & Jerry’s, well, more power to them. If Bud Light and Disney’s forays into politics had worked to increase their profits I’d be fine with it, whether or not I actually agree with the cause.

But it’s clear that they’re getting out ahead of where the bulk of their customers are at on this stuff and that’s a mistake. And you know what? Same goes for political parties.

Have a good weekend. See you Monday.