Home Business If US companies 'go woke', do they really go broke?

If US companies 'go woke', do they really go broke?

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In a viral video, Instagram influencer Bri Teresi takes aim at cans of Bud Light, using a semi-automatic rifle to express her dislike for the beer.
"Go woke, go broke," Ms Teresi warns before opening fire on the cans. Ms Teresi had taken her cue from the country singer Kid Rock, who weeks earlier produced a video of him shooting Bud Light cans with a submachine gun.
The protests are part of a conservative reaction to the brand's seeming support for transgender influencer Dylan Mulvaney, who had shown off a personalised can of the beer in a social media post sponsored by the company.
Bud Light, made by Anheuser-Busch, is now one of the latest US companies caught up in America's culture wars, joining a long list that has included Disney, the National Football League, Nike, Target and fast-food chain Chick-fil-A.
"Clearly, consumers have had it with corporate America trying to push values down on the people they supposedly are serving," said Will Hind, the executive director of Consumers' Research, a firm that has spearheaded campaigns targeting American Airlines and Levi's. "People now act fairly swiftly when they see companies going 'woke' in ways that are noxious."
Boycotts can be found on both sides of the political spectrum.
Brands including sports apparel firm Under Armour and food company Goya faced backlash after their respective CEOs spoke out in support of former President Donald Trump.
Whether or not these campaigns are effective, however, is up for debate.
In Bud Light's case, it was unseated from its position as the best-selling beer in the US, with sales in the month leading up to 3 June down by nearly 25%. An analysis released by JP Morgan in May projected that Anheuser-Busch's earnings for the year would drop 26%, with sales not recovering fully until the 2024 fiscal year.
Originally a slang term denoting awareness of social injustice and inequity, the word "woke" is used by right-wing Republicans as a pejorative umbrella that covers a variety of topics, from climate change to support for minorities.
Evan Nierman, a PR crisis manager and author of a book entitled The Cancel Culture Curse, told the BBC that similar boycotts had had "devastating" financial impacts on US companies.
"The immediate financial impacts of boycotts are self-evident," he said. "They could produce even greater losses when you calculate long-term damage to their reputation and loss of loyal consumers."
Surveys suggest that Americans put considerable stock in a brand's stance on issues.
One survey released by PR and marketing agency Method Communications in April suggests that 67% of Americans say their purchases are affected by a brand's stance, while 42% say they have stopped shopping with a particular brand because of its position on an issue. More than one-third of respondents say they pay attention to a firm's views on social issues.
Some brands, experts say, face temporary losses only to emerge in a better position, championed by their supporters.
Among them is Nike, which in 2018 saw detractors burning shoes and destroying other products in response to the company's support for quarterback Colin Kaepernick's racial justice protests.
More recently, it angered some Americans with a campaign to promote leggings and sports bras using Dylan Mulvaney, the same activist at the heart of the Bud Light controversy.
"There were all kinds of bonfires that erupted about Nike for their stance. But it stuck to its guns, and you know what? Sales went up," said Tony D'Angelo, a public relations professor at Syracuse University.
"They made a commitment, and while that might disqualify them from some customers and some markets, it carved out a position for them in others," he added.
While sales initially dipped in 2018, they rapidly bounced back. Within 12 months, stock prices were up over 60%. The company ended its most recent fiscal year with gross profits of $22bn (£17bn) – a nearly 3% year-on-year increase.
According to experts, the key factor that could ultimately determine how a brand weathers a woke-related boycott is how they respond to the initial fall-out.
Bud Light, for example, came under intense criticism for its response to the Dylan Mulvaney controversy. After remaining silent on the issue for several days, CEO Brendan Whitworth said in a statement that the firm "never intended to be part of a discussion that divides people".
"We are in the business of bringing people together over a beer," the statement added.
The response was widely seen as a blunder by experts in brand strategy and crisis communications. Mr D'Angelo characterised the brand's response as "waffling".
"You have to make a commitment," he said. "If you waffle, then people are going to rightly question what they really stand for. That's exactly the position that you don't want to be."
Mr D'Angelo's comments were echoed by Jordan McCauley, a member of Atlanta's LGBTQ+ community and founder of CelebrityPR, a firm that works with brands.
"Brands need to pick a position and stick to it. What hurt Bud Light was they seemed to flip-flop," he said. "If they really supported Dylan Mulvaney, they would have stood up for her… to everyone who protested. But they backed down. Both sides then see this as two-faced and inauthentic."
When asked by the BBC for comment on the boycott and its response, an Anheuser-Busch spokesperson said only that "for the year", Bud Light remains the top beer brand in the US in volume and dollar sales.
Observers believe that boycotts of brands or firms are likely to increase in the coming years, partly as a result of the debate over "woke" ideology playing a key part in the upcoming 2024 US election.
Mr Nierman said the country was likely to experience a "boycott fever".
"We absolutely should expect to see more campaigns," he said. "They give everyday citizens the power to become activists, and to make a massive collective impact."
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