Navigating DE&I Challenges: Lessons from Bud Light's Repositioning Fiasco and Beyond

If you have access to any type of social media or frankly the internet period, it's highly likely that you've encountered the Diversity, Equity, and Inclusion (DE&I) controversy enveloping Bud Light, a prominent beer brand.

This case study offers a comprehensive examination of the series of events that precipitated the recent DE&I misstep by the brand. We'll delve into the resulting ramifications for the company and extract broader insights that can guide us in our future endeavors within the realm of Diversity, Equity, and Inclusion (DE&I).

Background:

Anheuser-Busch InBev, commonly referred to as AB InBev, is one of the world's largest and most prominent multinational brewing companies. Forged through a series of mergers and acquisitions, the organization dates back to the mid-19th century.

Renowned for its extensive array of beer brands, including Bud Light, Budweiser, Corona, Stella Artois, and more, AB InBev has left an indelible mark in the brewing industry.

Of its offerings, Bud Light is one of the most iconic and frequently enjoyed beers worldwide.

Bud Light competes vigorously in a diverse beer market, appealing to a broad spectrum of consumers such as:

1. Mainstream Beer Drinkers: Bud Light caters to the everyday beer enthusiast, delivering a light and refreshing option often sought by those seeking an accessible and casual beer experience.

2. Sports Fans: The brand's strong affiliation with sports and extensive presence at sporting events makes it a favorite among sports enthusiasts.

3. Partygoers and Social Drinkers: Bud Light is a popular choice for those attending social gatherings, parties, and events. Its crisp and light character makes it a fitting companion for such occasions.

4. Price-Conscious Consumers: Bud Light's affordability, especially in comparison to craft and premium beers, attracts budget-conscious consumers.

5. Loyal Customer Base: Bud Light has a dedicated following, boasting a substantial number of long-time patrons.

6. Casual Beer Drinkers: It caters to individuals who may not be connoisseurs but seek a familiar and reliable beer.

7. Young Adults: Bud Light sets its sights on a younger demographic, specifically millennials and Generation Z. Its marketing aligns with the preferences and lifestyles of these age groups.

While Bud Light's consumers encompass a broad spectrum of individuals, the brand is notorious for resonating particularly with a male-dominated, "fratty" audience. Despite this, the large majority of their customer base all have a common appreciation for light and approachable beer, tend to be value-conscious, and have a propensity for social and recreational activities.

According to Statista, Bud Light ranks as the world's fourth most valuable beer brand, with an estimated brand value exceeding $9 billion.

Bud Light has strategically positioned itself as a "lifestyle" brand, seamlessly integrating into consumers' daily experiences, such as enjoying a Bud Light while dining out.

To foster this lifestyle connection, the brand has concentrated on forging emotional bonds with its customers, transcending mere product features such as taste. This emotional connection is cultivated as the brand has aligned their brand values with those of its target audience over the years.

Bud Light's affiliations with the NFL, Super Bowl, American imagery, traditional values, camaraderie, shared experiences, and humor create a tapestry of connections that resonate with its consumers.

The brand has had a history of supporting LGBTQ+ causes spanning two decades. In 2019, in honor of Pride Month, Bud Light introduced rainbow aluminum bottles, committing to donate one dollar for every case sold, up to $150,000, to the LGBTQ+ nonprofit organization Glaad.

Repositioning Efforts:

In July 2022, Alissa Heinerscheid assumed the role of VP of Marketing, as the first woman to lead at Bud Light. Her primary mission: a complete makeover of the brand's image.

Right from the outset, Heinerscheid recognized the urgent need for inclusivity, setting the stage for a revolution aimed at shedding the brand's 'fratty' image.

She candidly acknowledged Bud Light's declining popularity and stressed the critical importance of attracting younger consumers to ensure the brand's future.

In various interviews, Heinerscheid emphasized the necessity of drawing in a fresh consumer base, reinvigorating the iconic brand, creating inclusive campaigns appealing to all genders, and leaving behind the previous "fratty" humor associated with Bud Light.

One of her team's initiatives was a Super Bowl ad featuring Miles Teller and his wife Keleigh Sperry, where a woman effortlessly carried a round of beers to her friends' table without spilling a drop. This was a reflection of Heinerscheid's vision to make the brand more female-friendly.

Yet, not all attempts to revamp the brand went over smoothly. A partnership with Dylan Mulvaney, a controversial trans activist with a substantial social media following, caused an unexpected backlash.

Initially, the partnership with Mulvaney aimed to promote a contest leveraging her social media influence to boost participation in Bud Light's March Madness contest. The intention, like any influencer partnership, was to enhance the brand's visibility.

However, Mulvaney's selection was deliberate, demonstrating Bud Light's commitment to diversity and inclusivity. By collaborating with a transgender influencer, the brand sought to show support for the LGBTQ+ community, aligning with the values of a socially-conscious, younger consumer demographic.

This initiative was also part of Bud Light's broader strategy to appeal to a younger and more diverse customer base, recognizing the need for brand rejuvenation to secure long-term success.

Nonetheless, what appeared as a typical influencer campaign quickly ignited controversy among regular customers.

In April 2023, Mulvaney posted a sponsored video promoting the "Easy Carry Contest," offering a chance to win $15,000 for showcasing their beer-carrying skills. Towards the end of the video, she displayed a tallboy can featuring her image, a gift from the company commemorating her "Days of Girlhood" series, documenting her transition journey. Meanwhile, the brand had introduced a line of Pride-themed cans with various pronouns.

This seemingly innocuous promotion set in motion a series of events profoundly impacting Bud Light's brand image and sales.

Conservative consumers expressed outrage on social media, leading to calls for a Bud Light boycott, mainly spearheaded by conservative commentators, celebrities, and news outlets. Critics accused the brand of yielding to a vocal minority while potentially alienating a more extensive customer demographic.

Some of the dissenting voices had a history of antagonizing the transgender community, with musician Kid Rock emerging as a prominent critic, even going as far as posting a video of himself shooting Bud Light cases.

At the heart of the backlash was the perception of Bud Light embracing a "woke" agenda, seen by some as conflicting with the brand's established image and values.

Impact and Economic Ramifications:

Bud Light's collaboration with transgender influencer Dylan Mulvaney had far-reaching consequences, sparking an economic downturn for both the brand and its parent company, Anheuser-Busch InBev (AB InBev) in the U.S. market.

The repercussions were significant, leading to a decline in Bud Light sales, relinquishing its top-selling beer status in the United States to Modelo Especial.

AB InBev bore the brunt of this as it reported a 10% reduction in U.S. revenue during the second quarter, translating to a $395 million revenue loss in North America compared to the previous year.

After enduring hiring freezes and layoffs spanning several months, Anheuser-Busch wholesalers recognized that a portion of their previous customer base might not return.

The brand has struggled to re-engaging disenchanted customers following the Dylan Mulvaney controversy and Anheuser-Busch witnessed sales declines not only for Bud Light but also for other brands such as Budweiser, Michelob Ultra, and Busch Light since their association with the transgender influencer.

Despite these economic challenges, AB InBev exhibited its resilience by achieving a notable 7.2% increase in overall revenue during the second quarter. This growth was predominantly driven by strong performances in international markets, particularly in China, South Africa, and Colombia. It underscored the strength of AB InBev's diversified brand portfolio, featuring well-established names such as Stella Artois and Corona.

Response:

In response to the backlash, Bud Light's CEO, Brendan Whitworth, issued a statement emphasizing the company's commitment to inclusivity. He expressed that Bud Light had never intended to be a source of division and stressed their core mission of bringing people together over a beer. However, the statement notably lacked explicit support for Dylan Mulvaney and did not convey solidarity with the trans and LGBTQ+ community.

This only exacerbated the controversy as Bud Light not only faced criticism from conservative groups, but also some members of the LGBTQ+ community for their tepid response to the backlash, only underscoring the brand's challenge in navigating a polarized landscape.

In the face of declining sales and mounting criticism, Anheuser-Busch, the parent company of Bud Light, announced that two of their top executives would be taking a leave of absence, reflecting the gravity of the situation.

To address the situation and work toward regaining public trust, Anheuser-Busch also made a decision to pivot their marketing strategy. Their new approach focused on the realms of sports and music, signifying a strategic move to reconnect with consumers through more popular and unifying cultural avenues.

Unfortunately for the brand, this was seen as an over-correction by the media and by consumers and was considered by many to be a “marketing stunt” and designed to sweep the current controversy “under the carpet”.

Dylan Mulvaney addressed the situation on TikTok.

She shared the personal toll she endured due to the backlash, revealing experiences of stalking and transphobia. She criticized Bud Light for not reaching out to her and asserted that a company hiring a trans person and then not publicly supporting them is worse than not hiring a trans person at all.

All of that to say, their actions only managed to make the brand situation somewhat worse than it was before.

DE&I Marketing:

Bud Light’s 2023 influencer campaign with Dylan Mulvaney could be classified as Diversity, Equity, and Inclusion (DE&I) marketing.

DE&I marketing involves the practice of promoting representation and inclusion of individuals from diverse backgrounds in marketing campaigns and brand messaging. The underlying principle is to portray brands as inclusive and representative of various groups of people while avoiding stereotypes.

It’s safe to say that a majority of companies prioritize profit, and therefore, similar to the concept of "green marketing," brands often embrace DE&I messaging with both a social responsibility and profitability motives.

Aside from supporting social values and change, brands can benefit from DE&I marketing by:

• Enhancing their brand image

• Associating themselves with positive social change

• Being seen as a more approachable brand

• Promoting themselves as a brand that “really cares”

• Improving customer loyalty when their messaging aligns to the values of their customers

• Positive media attention

• Stronger emotional connection between the brand and its customers

• Potentially expanding into new target markets.

In essence, DE&I practices not only support social justice but also yield multiple positive, and often profitable, outcomes for brands. The aim is to achieve a win-win-win scenario, benefiting the brand, its customers, and society at large.

However, there are potential risks and downsides associated with promoting a brand around DE&I issues, including:

• Potential backlash – or negative media attention (as was the case with Bud Light)

• Criticisms/accusations of tokenism

• Potentially offending particular groups and/or customers and/or values

• Inadvertently using negative stereotypes

• Being seen as insincere

• Being seen as only profit-driven, simply promoting the message as a marketing stunt or a PR exercise

Brands collaborate with influencers for a variety of reasons, including repositioning their brand, reaching new consumers through media exposure, attracting first-time consumers, supporting diversity and inclusion issues, and increasing brand awareness, trust, and credibility.

Initially, Bud Light perceived Mulvaney as an ideal choice, symbolizing a bridge to a younger, more diverse generation. The brand's intention was to align itself with contemporary values and inclusivity. However, as we now know the actual outcome diverged from these expectations.

What Went wrong:

There are a few key things that went wrong here. For starters, the company's executives seemed to lack the nuanced approach required to effectively connect with racially diverse and younger consumers.

Then, instead of maintaining their initial position, the company made attempts to downplay the entire controversy, a decision that only fueled public outrage.

The CEO's statements attempted to frame the backlash as something more significant, evolving into a culture war they wished to distance themselves from. Consequently, they refrained from making any efforts to reach out to or stand up for Mulvaney amidst bullying nor take any remedial actions.

While DE&I marketing itself is not inherently bad, it is crucial for companies to actively implement measures that advance inclusion, equity, and meaningful representation within their organization to show that they truly walk the walk. Even though the diversity, equity, and inclusion section of Anheuser-Busch's website underlines their commitment to mirroring the diversity of the communities they serve, a brief examination of the website reveals that 16 out of 18 leaders in the company are male.

Increasing diversity in the C-suite cannot and would not address all issues, however, a more diverse boardroom might have led to a more empathetic response to the controversy.

Authenticity of DE&I: DE&I marketing can drive positive change, but it becomes problematic when an organization is unwilling to wholeheartedly stand by it and cannot genuinely claim to have pursued it for the right reasons. Moreover, it seems that the organization has yet to take any significant internal measures to nurture an environment of inclusion, equity, and subsequently, diversity.

In this case, a majority of the mistake lies in insincerity.

Why this still matters:

The Bud Light controversy set in motion a chain reaction that extended its impact to other brands, all becoming targets of the "anti-woke" backlash. A multitude of businesses found themselves under scrutiny for their perceived support of progressive policies.

In May, retail giant Target adapted its marketing approach due to objections from specific consumers regarding its LGBTQ+ community support. Target had a longstanding tradition of creating displays and merchandise for Pride Month for over a decade. However, following the recent backlash, which even included instances of consumers damaging merchandise, the company made the decision to relocate its Pride displays in select stores.

Kohl's also faced an uncomfortable Memorial Day Weekend when #BoycottKohls trended on Twitter in response to the department store's Pride merchandise. Conservative shoppers took offense, particularly to a onesie for babies depicting several people of color holding a pride flag. Notably, Kohl's had been supporting LGBTQ+ initiatives like The Trevor Project since 2019 with minimal backlash until the Bud Light incident. At the height of the controversy, the company's stock price experienced a 10% dip, but it has since been on the rebound.

These events are expected to influence the future of DE&I efforts, as companies become increasingly apprehensive about potential backlash.

As previously discussed in my blog post Unveiling Misconceptions Affirmative Action, DE&I Challenges, and the Path to Genuine Diversity, I predict two corporate reactions:

First, companies genuinely dedicated to bolstering their DE&I initiatives will adapt and persist, undeterred by potential backlash. They may consider strategic rebranding, shifting their emphasis from "diversity" to the broader objective of ensuring non-discrimination, as mandated by the Civil Rights Act. This approach allows them to align their efforts with legal obligations while still addressing the fundamental principles of diversity and inclusion.

Conversely, companies with a less firm commitment to DE&I may be more inclined to abandon their diversity initiatives altogether.

Despite the risks of initiatives occasionally backfiring, it's imperative not to retreat from them. Instead, we should utilize these situations as learning opportunities, gaining insights into what went wrong and committing to do better in the future.

Conclusion: Navigating DE&I Challenges

In my latest book, "Beyond Comfort Zones: The Real-Talk Approach to Diversity, Equity, and Inclusion," I delve into the prevalent pitfalls that organizations often encounter, including inauthenticity in their DE&I efforts, hastily created initiatives lacking long-term viability, and the necessity to strike a balance between accountability and responsibility for DE&I.

I advocate for a more nuanced approach to DE&I initiatives, one that seeks to avoid these common traps and foster meaningful, sustainable change within organizations.

As I continue my research, I'm eager to hear about the most successful DE&I initiatives you have come across or been a part of to gain more insight across different cultures and business areas. Your experience will serve as a valuable source of insights for other companies to draw upon in their future DE&I endeavors.

To share your thoughts and ideas, please schedule a call with me here to keep the dialogue alive and advance our collective understanding of successful Diversity, Equity, and Inclusion efforts.