The Killing Fields (July 2023)

Risk Commentary

The Killing Fields (July 2023)

The Killing Fields

A massive shift has occurred in cultural norms, leaving in its wake befuddled corporate managers and shareholders.

The Budweiser brand was built over decades harkening images of majestic Clydesdale horses hauling old-time beer wagons and more edgy Spuds MacKenzie, the pit bull Bud mascot, which was pulled presumably because of the harm caused in numerous pit-bull attacks. Regardless, the brand was a long-time favorite of middle American beer lovers and easily trumped any beer rival.

Then came the shift: many corporations were attempting to be perceived as more inclusive presumably in an effort to do the right thing and be accepted by the broader media crowd.

The shocker came when those same corporations incurred backlash from their core customer base. In Budweiser’s case, or more specifically, “Bud Light’s” case, the faux pas was the picturing of Dylan Mulvaney on the face of a can and promoting an advertisement announcing its open-mindedness.

The backlash hit quickly, with many prior customers, bar owners, and a variety of others boycotting the brand. The latest news is that the long-time dominance of Bud Lite as the number one beer brand has been lost and early indications is that it might stabilize at about number three or perhaps four. The fallout has cost its parent approximately $19B [1].

A core problem is that senior management appears either clueless about their customer base’s views or feel compelled to voice platitudes which do little to reverse the slide. We use the term “Killing Fields” because once a firm and perhaps an individual enters it, there is little hope of exiting intact. If a firm or person acquiesces to one faction, the other kills them, and likewise, acquiescing to the other side also results in death.

Alas, the damage does not end with Bud Lite. The retailer Target entered the “Killing Fields” with its botched effort at Pride week, whereby it pulled apparel after consumer backlash [2].

Lastly, Disney tainted its brand and its CEO via its attempt to be progressive by criticizing Florida governor DeSantis’s Parental Rights in Education Act. The company made news by labeling the law as “Don’t Say Gay” [3]. Shortly thereafter DeSantis proposed and passed a law removing Disney’s control over zoning and other governmental issues on the land surrounding Disney World, the company’s large Florida theme parks.

The upshot was that the prior CEO of Disney was removed in favor of a return of prior CEO, Iger, and the company remains embroiled in a fight with DeSantis.

So where does that leave us. Our view is that we are uncertain. On the one hand, corporations are often encouraged to be leaders in important areas of reform. On the other hand, many feel threatened, and perhaps more accurately believe their children are threatened by inappropriate messaging. Furthermore, some appear to be expressing their frustration with the forced sensitivity on gender definitions and shifting pronouns.

As usual, there are no easy answers in the best response to the ever-changing shifts in society and culture. However, one item is very clear and that is the ill-informed are likely to find their holdings or perhaps themselves in the “killing fields”.

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[1] https://www.foxbusiness.com/markets/target-bud-light-investors-lose-billions-on-marketing-misses
[2] https://apnews.com/article/target-pride-lgbtq-4bc9de6339f86748bcb8a453d7b9acf0
[3] https://www.businessinsider.com/disney-desantis-feud-timeline-parental-rights-education-florida-2023-4

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