From Bud Light to Target, anger at “woke capitalism” is scaring corporate America

Mar 10, 2024

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From Bud Light to Target, right-wing anger at “woke capitalism” is scaring corporate America.

The general rule about consumer boycotts is that they rarely work, at least in terms of taking a real bite out of a company’s bottom line.

Take some recent examples. Plenty of coffee drinkers still love their Keurigs, despite a handful of people smashing their already-purchased machines in 2017. In 2018, Nike got a sales boost after angering some conservatives for doing an ad campaign with former NFL quarterback Colin Kaepernick. In 2020, calls among progressives for a boycott of Goya products semi-backfired — the hullabaloo actually resulted in a brief bump in the food company’s sales.

This year, though, the boycott outlook in the United States has been a little different. Conservative consumers, specifically, have been able to do some damage.

Bud Light’s decision to embark on a small-scale marketing campaign with transgender influencer Dylan Mulvaney sparked vast outrage on the right this spring. It cost the company millions of dollars in sales and ultimately contributed to Bud Light’s dethroning as the most popular beer in the country.

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Then, over the summer, conservatives took aim at Target and its annual Pride collection. Many called for a boycott of the retailer, and some consumers took to going into Target stores to destroy displays and harass employees. Target’s earnings were down for the second quarter. While the Pride backlash wasn’t the only or main issue in play, in an earnings call, a company executive cited “the strong reaction to this year’s Pride assortment” as headwinds during the period. Target now says it’s going to “pause, adapt, and learn” so that its future approach to Pride “balances celebration, inclusivity, and broad-based appeal.”

Neither brand is in dire straits, but they would probably much rather not be in this position.

Conservatives aren’t winning every battle with corporate America — I’m signed up for a service called “Woke Alerts” that supposedly tells me every so-called woke company I’m supposed to boycott, and it feels like it’s a little bit all of them. However, it does appear that they’re onto something on some fronts. They are managing to hit a few companies where it hurts at least somewhat — on their balance sheets — and are getting them to change their behavior.

The energy on the right is having a chilling effect across corporate America. Activists have a figurative gun, they want to keep hunting, and CEOs know it.

There’s no concrete unified theory of why this recent string of right-wing outrage is hitting companies differently as of late, but it’s somewhat helpful to look at the boycotted brands themselves. For one thing, and not to be rude to Bud Light here, but it’s not the most awesome-tasting beer. More importantly, it’s really easy to swap out for another similarly not-most-awesome-tasting beer like Coors Light or Miller Lite, which is what many consumers seem to be doing.

“Bud Light seems like the most maximally substitutable beverage on Earth,” said Jerry Davis, a professor of management at the University of Michigan’s Ross School of Business, though he did express surprise at what’s happened. “The Bud Light event really did take down the sales of America’s most popular beer, and I really can’t think of a comparable event in the past.”

There are likely a variety of factors in play here.

The right is energized and focused. While there have been calls for boycotts of other companies in recent months that have not been so successful (Chick-fil-A, Miller Lite, etc.), activists have been able to get people to coalesce around a handful of specific actions and brands.

“Historically, boycotts haven’t worked. They’ve been too diffuse,” said Maurice Schweitzer, a Wharton professor who focuses on behavioral decision research, emotion, and negotiations. “I think what seems to have changed is that first of all it’s more focused, so it’s Bud Light and Target, it hasn’t been a lot of other companies, and the second thing that’s really different is that people are motivated and coordinated.”

In May, influential right-wing commentator Matt Walsh was quite open about the strategy on the platform formerly known as Twitter. “We don’t need to [boycott every woke company],” he wrote. “Pick a few strategic targets. Make them pay dearly. That’s enough to make wokeness a lot less appealing to the corporate world. Stop trying to bring down the whole line of dominos at once. Start with one, and then the next.”

The culture wars of the moment are likely a contributing factor here. Namely, conservatives are united around pushing back against transgender visibility and rights. It’s a hot-button issue and one there’s a lot of frenetic sentiment around within the GOP.

“Conservatives at the moment are more unified as a group of politically active people than liberals are, especially on the trans issue,” said Brayden King, a professor of management and organizations at Northwestern’s Kellogg School of Management.

That’s not to say liberals don’t care about trans rights, but they’re not as energized over it, and they’re not as in lockstep as conservatives are. All the different groups and viewpoints in the Democrats’ big tent make it harder to organize, especially when Donald Trump, a unifying force for the left, is no longer in the White House. “If he’s not there to fight against, it’s not clear to me what they all have in common,” King said.

When Trump was elected, there was an effort to boycott and pressure companies with ties to him and his businesses as part of the #GrabYourWallet campaign. It’s not clear it did much financially to the companies targeted except for Ivanka Trump — it was a lot of companies to keep track of. However, it did generate a lot of attention and publicity.

Part of this is the nature of the Republican Party, which historically has been a more monolithic group, and has become angrier in recent years. “Democrats and liberals tend to be less homogenous, less coordinated, less easy to identify with a single issue,” Schweitzer said. “Trump has changed the Republican Party in a very fundamental way to be much more about identity, much more about grievance, and it’s been very powerfully motivating.”

The environment makes it easier to get people wound up about Target’s Pride collection, for example, even though said collection has been around for years.

Much of this has been put on overdrive by social media allowing people to coordinate in ways they haven’t been able to in the past. It’s fueled by the conservative media complex — and some misinformation. There’s also an element of violence to this that is quite unique and disturbing. Target’s stated reasoning for pulling back on its Pride collection has, in part, been to protect the safety of its employees. “That’s something that you can’t really just wave away,” Davis said.

The intensity among right-leaning consumers isn’t just negative, with people turning away from brands. There is an additive element to it as well, adding to some bottom lines and not just taking away. The film Sound of Freedom, which is about child sex trafficking, has been a hit among conservative audiences and raked in tens of millions of dollars as a result. Conservatives have also been able to drive controversial country songs, such as Jason Aldean’s “Try That in a Small Town” and Oliver Anthony’s “Rich Men North of Richmond,” up the charts.

To be sure, plenty of the efforts to appeal to conservative consumers are grifts, and there’s not some vast economic ecosystem for Republicans to cordon themselves off in. It’s not like everything’s been coming up roses for the American right as of late, politically, either. Republicans underperformed in the 2022 midterms. The Supreme Court’s decision to overturn Roe v. Wade has energized progressive (and moderate) voters, and multiple subsequent abortion-related referendums and votes have not gone the GOP’s way. That may be part of what’s motivating conservatives to look elsewhere to exercise their power, including to their wallets.

On a broader level, this is indicative of the growing polarization and even tribalization of America. Conservative and progressive consumers don’t want to shop in the same places, or talk to each other or negotiate with each other or even acknowledge the other exists.

“The reality is increasingly there is a red market and a blue market,” said Geoffrey Kabaservice, a vice president at the Niskanen Center, a center-right think tank. “Ultimately here the subtext is America is a pretty divided country.”

To a certain extent, progressives have already won the battle for corporate America’s soul. Companies are expected to take a stand on the issues of the day, whether that be race or immigration or climate, and some businesses have tried to step in where government will not. The general line among experts goes that while many consumers don’t really actually shop their values — at least not for a sustained period of time — many employees do work their values. A firm being viewed on the wrong side of history can make it harder for it to recruit and retain talent.

That’s led to a sort of equilibrium where many companies have become accustomed to being “woke.” The right uses it as a derogatory and exaggerated term, accusing companies of overstepping political bounds on even basic issues, such as embracing diversity and rejecting racism. But it’s true that corporations have taken a more liberal bent in recent years, because their customers, workers, and stakeholders expect it.

Part of what’s made the consumer activism on the right so effective and so jarring is that it disturbs that equilibrium and is different, said Steven Teles, a political science professor at Johns Hopkins University. Companies have a protocol for dealing with liberals who are worried about gun violence. They don’t have a protocol for dealing with conservatives who like Bud Light. “The efficacy of this is probably highest when it’s a surprise,” he said. “There was a great awokening equilibrium. But now the people on the other side of that have figured out the counter move.”

There may be a level of boycott burnout on the left as well. Progressives tend to talk a lot about shopping their values, which it turns out can be exhausting. Amazon’s bad, so is Walmart, and so is probably every retailer if you look closely enough. “There’s not boycott fatigue on the right,” Teles said. “Boycotts are probably easier to get people to engage in when they’re novel … also when there’s an easily available alternative.” (Again, Bud Light really is easy to switch out.)

Bud Light’s and Target’s handling of the backlash has been questionable. To put it plainly, both companies blinked. Anheuser-Busch InBev, which owns Bud Light, hasn’t stood by Mulvaney and has put out a bunch of wishy-washy statements and ads that don’t really amount to anything clear or substantive. Target acted quite immediately to remove some merchandise altogether and move its Pride displays to the back of its stores. This isn’t to downplay the safety issue for employees, which is real. Still, it appears that the company was not as committed to the LGBTQ cause as it had professed in the past. The potential insincerity is something consumers across the political spectrum pick up on.

“While both firms might have won over consumers who support LGBTQ causes, the gains might not have fully blunted the impact of the boycotts due to skepticism over these companies’ authenticity,” said Zhao Li, an NYU professor who specializes in strategic management and political economy, in an email. “To some extent, both Bud Light and Target seemed to have backed away from their initial stances following public backlash, and might have appeared inconsistent to consumers initially drawn to them for their advocacy on LGBTQ issues.”

While progressives were turned off by the companies’ perceived cowardice, conservatives were energized. “That really emboldened people to lean in even harder,” Schweitzer said.

That’s led them to keep seeking out targets and going for more. “There is an epidemic quality to this stuff,” Teles said. “It’s the old line ‘the appetite grows with the eating.’ Once people did that, they’re like, it was fun, and it seemed efficacious.”

There are some factors that make Bud Light and Target unique. “Whether it pays to engage in socio-political advocacy in a polarized society depends on various market variables, such as consumer stances, product substitutability, and competitors’ positions. Some of these variables do not look favorable for Bud Light and Target,” Li said. She pointed out that political activism may work better as a marketing strategy for smaller brands with little to lose and may be highly risky for established brands. Bud Light, specifically, has a more traditional consumer base, which likely contributed to their sense of betrayal at the company’s embrace of a transgender influencer. Other companies with more progressive consumers have not faced a similar backlash.

That doesn’t mean many firms aren’t worried. “Bud Light is probably going to be the exception more than the rule, but I think there will be [more] examples like this,” Kabaservice said.

If you are a CEO sitting in your office today contemplating how you’re going to approach political and cultural issues, the threat of conservative activists coming for you has to be in the back of your mind. As much as your employees, customers, and even perhaps personal politics may be pushing you to the left, there’s a risk that your firm could be next. Nobody wants to be the next Bud Light or Target or even Disney, which hasn’t seen a real hit to its business since criticizing Florida’s “Don’t Say Gay” law but also probably would rather not be dealing with Ron DeSantis. The company already had to deal with the Christian Southern Baptists calling for a boycott over being progressive on gay rights in the ’90s, a years-long effort that was unsuccessful because it turns out telling your kids they can’t go to “the happiest place on earth” over some cultural issue they don’t really care about is hard.

The nature of the modern market is that companies are supposed to focus on profits and delivering shareholder value. Most firms that profess to embrace progressive values do so because at the very least they think it won’t hurt their business and instead hope it will help. If the scenario shifts, so does their behavior.

Corporate executives have stopped talking as much about sustainability and diversity efforts in public forums. As the Wall Street Journal notes, mentions of ESG (environmental, social, and governance) and DEI (diversity, equity, and inclusion) on earnings calls declined steeply between this year and last.

In June, Larry Fink, the CEO of investment firm BlackRock, said he had stopped using the term ESG because it had become too politicized. “It’s been entirely weaponized ... by the far left and weaponized by the far right,” he said. He added that BlackRock was still committed to talking to companies about issues such as decarbonization and social concerns. Still, it’s a different tone from a guy who in 2018 declared that “society is demanding that companies, both public and private, serve a social purpose.”

Conservative activists aren’t winning the war against supposed wokeism in corporate America. If anything, they would likely say they’re the little guy here, fighting against the Woke Man. They are winning some battles, though, against some major companies along the margins, and they’re seemingly getting businesses to quiet down.

Companies pushing back against North Carolina’s transgender “bathroom bill” cost the state billions of dollars and ultimately helped lead to portions of the law being scrapped in 2017. There’s no such overt corporate effort against legislation across various states barring transgender people from using the bathroom they identify with today.

Companies are likely looking around at competitors seeing what they’re doing, where they’re speaking out and where they’re not, what they’re putting on their shelves and in their marketing campaigns. There’s safety in numbers, even in concentrated corporate America.

“The old joke is you don’t have to outrun the bear, you have to outrun the other guy who’s running from the bear. Nobody wants to be the person the bear catches,” Teles said. And the bear has been poked.

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