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Last year there was a big riot when Budweiser (AB InBev) came under fire from the angry conservatives in the US. Reason? One of the influencers they hired was a transgender person.

It’s been a year since, but the Bud Bang still resonates. Companies are shocked and hesitant to do their rainbow marketing. For example, there was much less attention for Pride Month (June) this year than usual. But is that hesitation justified?

The 4 billion dollar woman

The reactions to the video were unparalleled. It was picked up by right-wing thugs and it quickly escalated into a ‘news of the day’ that lasted for weeks. Attention everywhere, but a lot of smearing and announcements of a boycott. In practice, the latter often has a positive outcome, but in this case it went wrong. Turnover fell, ABInBev lost 4 billion in stock market value, the brand suffered a dent and Bud theselves reacted so lukewarm and cowardly that the left wing of society also got upset.

In my article “The 4 billion dollar Woman” I described what happened. In short: Bud regularly sends personalized cans of beer to influencers, which the influencers then show on their socials. Transwoman Dylan Mulvaney was one of them. She has 10 million followers on TikTok and 2 million on Instagram: the messages about her transition have been viewed more than 1 billion times. So: a good reach in a niche market.

In her video, Mulvaney used the beer to celebrate both March Madness and her first year as a woman. And that was the beginning of a scandal.

Get woke, get broke?

It is an almost worn-out slogan with which conservatives in society want to object to modernities such as freedom, equality and fraternity. And of course against everything that has to do with the rainbow. I previously wrote about Get Woke Go Broke for ILOVEGAY, with the conclusion that social awareness among marketers and brands is becoming increasingly stronger. Although the social media trolls splutter – usually in vain – it is still a problem. And in Bud’s case, much more than that.

The Mulvaney video was noticed by rapper Kid Rock (who then shot cans of Bud with a machine gun), Republican professional hater Marjorie Taylor Greene (who vowed to only drink Coors beer from now on, a brand that has been an ally of LGBT+ people since 1978). ), a dumbass in Kansas (who made a mess in a supermarket with trays of “Busch Light” – oops, wrong brand) and finally Fox News (and then you know). The spiral was met with a response from the White House.

Of course, this could not remain without consequences. While AB InBev dealt with the incident very dully by stammering, half-hearted apologies and sending a few managers on ‘leave’, the stock exchange reacted with a panic response. About four billion in value went up in smoke. That’s quite a bit for an ‘external’ video of 48 seconds.

Warning

The drama was widely regarded as a warning that a brand must be careful when dealing with sensitive topics. And sensitive, that’s what Marketing the Rainbow still is. I recently sat on the Pride Panel of Publicis’ Adsterdam Festival, and there too the Bud story was cited as “how not to do it”. While last year the brands were still climbing over each other to promote their rainbow products and support, this year it was a lot quieter.

But Adage reported in May under the headline “Why Pride Month marketing is quieter this year and how brands can avoid negative reactions” that there was more going on: “In an election year and amid increasing culture clashes in the US, marketers are also challenged by global conflicts, such as the war between Israel and Hamas.” Brands also started their campaigns later than usual.

This Pride Month was compared to that of 15 years ago, when everything was still in its infancy. Other expressions of DE&I, such as Black History Month, also suffered from the “umbrella of woke,” said Rana Reeves, CEO of RanaVerse, an agency that mainly focuses on combining brands with popular and contemporary culture.

So what now?

There is plenty of talk about it in the press. Adformation wrote in August ’23: “Why there are fewer major brand campaigns for Pride Amsterdam”. ABC News reported: “These companies continued to advertise LGBTQ despite the risk of consumer boycotts”, in which my colleague Mike Wilke from AdRespect spoke extensively. He said, among other things, that companies largely plan their campaigns and media spending a year in advance, so that ‘agenda’ continues, albeit somewhat slowed down.

Hilton, North Face, Delta Airlines, Maybelline and Amtrak stood out this year for their rainbow marketing. Levi’s has even elevated the LGBTQ community and its concerns to a more important part of its advertising footprint – and yet had “no comment” to ABC. CNN reported that AB InBev lost around 1.4 billion in turnover, but the company still released record figures for 2023.

An event like Bud’s does influence brands’ planning, but at the same time they cannot ignore their Gen Z consumers. This is a generation that is very sensitive to ‘woke’ and social involvement from brands. According to Gallup, 1 in 5 Gen Zers now identify as LGBTQ (especially Q), as do 1 in 10 Millennials. Compare this to 3% of Baby Boomers. Galileo’s LGBT Capital estimated the global purchasing power of LGBT people at around $4.7 trillion (that’s 12 zeros). Definitely no crumbs.

Boycotts

But as is often the case, scandals and boycotts can also have the opposite effect. Bud received a lot of publicity (the earned media is almost impossible to calculate), but most of it was negative. On top of that, there was a dent in the market value, brand value and also in the market share.

(c) Hannah Minn/Morning Brew

A year has passed: AB InBev’s share price is 20% higher than before the incident, while the market rose about 15%. In any case, the Mulvaney effect is no longer visible financially. Bud Light was the market leader in their segment for 20 years, but had to give up that place to Modelo. Until February of this year, they did regain 1.2% market share, and that is increasing by about 0.2% every month. Harvard Business Review does write that the brand’s return is slower than with other boycotts. The bang was so loud that retailers also set aside less space in the store for Bud Light, which of course amplified the effect.

By the way, this shift in the Brewski hierarchy had been coming for years: Bud’s share fell from 19% to 10% over the last 10 years. American drinkers are increasingly attracted to Mexican imported beers. Modelo, a Mexican lager, was already on track to surpass Bud Light next year. So the boycott only accelerated things, according to the Wall Street Journal.

Interesting detail: AB InBev actually owns Grupo Modelo – the Mexican brewery that makes Modelo and Corona – everywhere except the US. In 2013, as part of an antitrust agreement, they sold the U.S. rights to Modelo to Constellation Brands.

In addition to losing its place as America’s best-selling beer, the brand also lost its first female VP, Alissa Heinerscheid, as a result of the long-standing boycotts.

Conclusion

Handle rainbow marketing with care, but be sure to include it in your media and campaign planning. There will certainly be resistance here and there – especially in the US – but the negative long-term effects of this are negligible, while the positive ones can stick to your brand. If it is a risk, you should take it: there is plenty to gain from it. And maybe you can still get a lot of earned media with a viral campaign…

Alfred Verhoeven is a marketer and is in the final phase of his PhD research Marketing the Rainbow.
He previously wrote for ILOVEGAY about That rainbow, A tram down your throat, The Dutch Rainbows, Pride Month, The Oldest Rainbows, Royal Dutch Shell part 1 and part 2, Marriott part 1 and part 2, Super Bowl Ads: What Would Jesus Do?,  Zalando part 1 & part 2, Get woke, go broke, Spain has 6.8 billion reasons to love rainbow tourists, How Spain markets itself as rainbow destination, Everyone’s gay in Amsterdam, I Amsterdam, Gay Capital, The Ideal Traveler, Diversity & Language, Playing with Pronouns, Abercrombie & Fitch : The Rise & The Fall, Play the gayme: about SIMS and Candy Crush, Diversity in Toys, LEGO does the rainbow, Barbiemania, Bud Light and the 4 bln dollar woman, Dutch retailer HEMA loves everybody, Pronouns, About those rainbows, Alphabet soup, M&M’s and the lesbian invasion, Magnum and the lesbian wedding, Marketing the Rainbow: the process and all that came before it, Sport and (un)sportmanship,  Why you need a supplier diversity program, BeNeLux LGBTIQ+ Business Chamber (BGLBC), From B2C and B2B to B2G and G2G (oh, and G2C), The Men from Atlantis, The other kind of cruising, Booking.com, Home Deco, Haters and trolls: the ‘letter to the editor’ of the 21st century, 5 Bizarre LGBT Videos, TRANSparency, Transgender persons as a target group, Matchmaking, 5 videos that went viral, From Representation To Respect, Cultural sensitivities and social involvement in marketing, 4 reasons to practice diversity and The Rules of Market Segmentation.