March 4, 2024

Businesses have come under fire for their inclusion of the LGBTQ+ community, forcing businesses to balance expressing their values ​​with risking backlash and even violence from a small but outspoken customer base.

As the boycott spread beyond social media to spark outrage, such as anheuser-busch, Target and disney Faced with a months-long PR fiasco that resulted in lost market share, executive changes, legal disputes, and even threats to employees. In some cases, businesses have drawn the ire of conservative consumers for marketing to LGBTQ+ consumers or criticizing laws against them, only to be met with more liberal shoppers for trying to appease those who reject a brand strong opposition.

Boycotts typically have little impact on companies’ bottom line, according to experts who track boycotts. Anson Frericks, who has been president for more than a decade, said the backlash against Bud Light has been hit especially hard because there are similar alternatives to the light beer and constant media coverage has emboldened the boycotters , and the company has yet to come up with a unified strategy. Sales and Distribution Division of Anheuser-Busch.

For companies like Target and Disney, it’s unclear whether the boycott will affect sales. Even if businesses don’t suffer financially from the backlash, growing resistance to LGBTQ+ marketing jeopardizes corporate inclusion efforts that have become commonplace in recent years.

The wave of nationwide backlash against transgender people in particular has put pressure on even big corporations with a more liberal union representative Starbucks Dozens of the chain’s stores do not allow employees to decorate for Pride month in June, baristas said, and in at least one case, employees were told there was violence on Target’s Pride month merchandise, prompting protests. safety concerns. The company said it has not changed any decorating policies and is encouraging stores to celebrate Pride month.

GLAAD CEO: Extremists credit sales drop, but 'it's the opposite'

In recent years, LGBTQ+ inclusion has become “standard business practice,” said Sarah Kate Ellis, president and CEO of GLAAD, an LGBTQ+ advocacy group. But the approach got trickier in a “very aggressive legislative session” in which lawmakers across the country introduced hundreds of anti-LGBTQ+ bills that would include transgender rights and how schools teach sexuality and sexuality. topics such as gender identity. nation.

Ellis said that despite mounting headlines and ongoing criticism of Bud Light, the corporate boycott is “overblown” and those offended by the Pride month-related event are a “minority.” In another “Squawk Box” interview on Thursday, she said hundreds of companies, including Nike, the North Face and Walmart, are still running Pride campaigns in the face of pressure from “extremists.”

She also said Anheuser-Busch’s opposition to the boycott — including the decision by some gay bars not to carry Bud Light — contributed more to the slowdown than the initial conservative boycott.

Bud Light appears to be an outlier

In April, the brewer hosted a March Madness promotion with transgender influencer Dylan Mulvaney, who shared a custom Bud Light can on Instagram. Anti-trans politicians and celebrities were quick to call for a boycott of the beer.

Anheuser-Busch CEO Brendan Whitworth apology for controversy Claiming his company “never intended to engage in discussions that divide people”. But his statement, which neither defended the partnership with Mulvaney nor appeased the brand’s conservative critics, added to pressure across the political spectrum. Two marketing executives — Alissa Heinerscheid and Daniel Blake — were placed on furlough after finishing their partnership.

The boycott resulted in Anheuser-Busch losing business to an extent rarely seen after the online backlash. Weekly sales of Bud Light fell by double digits and lost its place as the best-selling beer in the United States in May, according to an analysis by Bump Williams Consulting using NielsonIQ data.

Shares of Anheuser-Busch have also fallen nearly 15 percent since Mulvaney’s promotion.

Fricks said the boycott of Bud Light, while an anomaly in many ways, underscores the wider dilemma facing corporate America as it confronts an increasingly polarized social landscape in which Taking a political stand, or even engaging in multicultural marketing, can be taboo for some customers. .

“Anheuser-Busch has forgotten who its customers are,” Fricks said. He left the firm last year and now works at asset manager Strive, which has been critical of environmental, social and governance investment platforms. “Brands like Bud Light have never been political, but now they’re being shunned by right-wing customers who see this partnership as a very political stance they’re taking, and left-wing customers who see it as The relationship is very political. There is no sense of support amidst the backlash.”

Fricks said company leadership initially “underestimated” the seriousness of the situation and later decided not to defend the promotion.

Anheuser-Busch has been working to win back customers on the left and right. The company said it still supports initiatives that support LGBTQ+ Americans.

“We remain committed to decades of programs and partnerships with organizations to advance economic prosperity in multiple communities, including the LGBTQ+ community,” a company spokesperson told CNBC. “Recently, we indicated that our partnership with (National Lesbian and Gay Chamber of Commerce) partnership will continue for the second year to empower LGBTQ+ owned small businesses across the United States.”

In a panel discussion at the Cannes Lions International Festival of Creativity last week, Anheuser-Busch’s global chief marketing officer, Marcel Marcondes, called this a pivotal moment for the marketing industry.

“I think it’s an important wake-up call for all of us as marketers to stay humble when things get divisive and controversial so easily,” Macondes said.

Brands face backlash

Pride Month merchandise is displayed at a Target store on May 31, 2023 in San Francisco, California.

Justin Sullivan | Getty Images

Not just Bud Light, but all brands are facing calls to boycott their goods or services. While no other company appears to have taken the financial hit Anheuser-Busch has taken, the backlash has in some cases led to the curbs on LGBTQ+ inclusion that have become commonplace in recent years.

Other companies that have faced reactionary criticism for their Pride Month activities in recent months include Kohl’s, Nike, Adidas, Jack Daniels, Ford and Chick-fil-A. None of these companies appear to have suffered any financial consequences, nor have they canceled their LGBTQ+ marketing campaigns.

Last month, Target announced it would pull some LGBTQ-themed merchandise from its shelves after a company spokesperson called its range of Pride Month merchandise a “threat” to employees.

Target, through a spokeswoman, declined to say which items had been removed or details of the events that led to its decision. The Associated Press previously reported that the merchandise included “foldable” swimsuits that allow transgender people who haven’t had gender-affirming surgery to hide their private parts.

Lawrence Glickman, a Harvard University professor, said that while the big box retailer didn’t experience a drop in sales as a result of the Bud Light backlash, the impact of boycotting Target extends beyond the brand or Its financial scope, because employees have been harassed. Professor of American Studies at Cornell University and author of Purchasing Power: A History of Consumer Activism in the United States.

Glickman said Target’s boycott was “unusual to the way consumer boycotts have been done in the past” because of its “aggressive, confrontational style” and because organizers “linked workers to company policies they didn’t have a say in.” .

He warned that Target’s decision to withdraw its Pride merchandise “will encourage those boycotters who may adopt the same tactics against other companies, or return to Target if they see something else they don’t like.” .”

Earlier this month, The union representing baristas said Starbucks workers in Oklahoma were told after the recent attack at a Target store that the restrictions on decoration were due to safety concerns. Starbucks told CNBC it is steadfast in its support of the LGBTQ+ community and has not changed its store renovation policy.

Another exception is The Walt Disney Company, which has staunchly opposed the protracted anti-LGBTQ+ movement in Florida.

Not only is Disney resisting calls to boycott its theme parks, but it’s also launching legal action against Florida Gov. Ron DeSantis, who the entertainment giant accuses of violating a state law that critics of the state law dubbed “Don.” punish. Don’t say gay. The measure limits LGBTQ+-themed education in the state’s public schools.

The ongoing legal battle doesn’t appear to be affecting Disneyland’s popularity in the state, according to Morning Consult Brand Intelligence.

Morning Consult determined that Republican respondents viewed Disney less favorably than Democrats. But the survey also found no partisan divide among the company’s park visitors.

Disney v. DeSantis: Why Florida governor takes on US media giants

“It shows that while Disney has become a major player in Florida’s culture wars, its guests care less about brand politics than the general public,” said Lindsey Roeschke, Morning Consult travel and hospitality analyst. .”

In fact, theme parks were a bright spot for Disney in its most recent quarterly earnings report. Revenue in the company’s parks, experiences and products segment rose 17% to $7.7 billion. About $5.5 billion of that revenue comes directly from its theme park locations.

“If Disney didn’t care less about diversity internally, I think they would cave in and do what Florida politicians are asking,” said Brayden King, a lead researcher on consumer activism at Northwestern University.

“But for them, these questions are really about who they are, their identity, their culture, their people, and even how they currently market their product,” Kim added. “They see themselves as a global brand, not just a Florida brand.”

pride under pressure

Shoppers carried bags through the pride-themed rainbow-colored crosswalks.

David Cliff | Noor Photos | Getty Images

GLAAD’s Ellis says the company is walking a tightrope as it tries to appeal to a community that tends to have higher disposable income, receptivity to tailored advertising and brand loyalty — but it’s also become a source of legislative attacks and cultural criticism. target of the storm.

Conservative celebrities and consumers appear to have seized on LGBTQ+ individuals’ political goals and endangered inclusion in the community.

But GLAAD and other groups are taking steps to ensure companies don’t abandon their outreach efforts.

GLAAD, along with more than 100 other groups, wrote a letter to Target last month Encourage retailers to reject and speak out against anti-LGBTQ+ extremism during Pride Month. Ellis said she has been advising more than 200 corporate partners who were “caught off guard” by the hostility.

“Whether it’s Target or Bud Light, companies have been very supportive of our community for decades and have never seen this kind of hostility,” Ellis said. “But they shouldn’t back down now, they should definitely continue proudly go ahead.”

GLAAD also announced Thursday that more than 50 companies, including Cisco, Intel, Pfizer and Salesforce, have signed a pledge “to reject harassment and bullying of the LGBTQ community and to support businesses that seek to serve all people in a safe and inclusive manner.” “.

In an interview with “Squawk Box” on Thursday, Ellis urged the company to continue to stand its ground if it wants the support of the LGTBQ+ community and the business these efforts bring.

“Our community and our allies speak with our money, and we don’t want to support a company that doesn’t support us in difficult times,” Ellis said.

— CNBC’s Melissa Repko, Sarah Whitten and Amelia Lucas contributed to this report.