Attacks against businesses for their inclusion of the LGBTQ+ community have forced companies to try to strike a balance between expressing values or risking backlash — and even violence — from a small but vocal part of their customer bases.
As boycotts move beyond social-media-fueled outrage, companies like Anheuser-Busch, Target and Disney are facing monthslong public relations fiascos that have resulted in market share losses, C-suite shake-ups, legal battles and even threats to employees. In some cases, corporations have drawn the ire of conservative customers for marketing to LGBTQ+ consumers or criticizing laws targeting them — only to face backlash from more liberal shoppers for attempts to appease those who spurned a brand.
Boycotts usually have little effect on a company’s bottom line, according to experts who have tracked them. The backlash against Bud Light has hit particularly hard because there are similar substitutes for the light lager, constant media coverage has emboldened the boycotters, and the company has not put forth a unified strategy, said Anson Frericks, who spent more than a decade as president of sales and distribution at Anheuser-Busch.
For companies like Target and Disney, it is unclear if boycotts will hit sales. Even if companies take no financial damage from the backlash, the increasingly aggressive resistance to LGBTQ+ marketing has jeopardized corporate-inclusion efforts that have become commonplace in recent years.
The backlash wave across the country, which has disproportionately targeted transgender people, has even weighed on large companies with more liberal reputations. The union representing Starbucks baristas said dozens of the chain’s locations are not letting employees decorate for Pride Month in June — including at least one case where workers were told violence in response to Target’s Pride merchandise sparked safety concerns. The company said it has not changed any policy on decorations and is encouraging stores to celebrate Pride Month.
LGBTQ+ inclusion has in recent years been “standard business practice,” said Sarah Kate Ellis, president and CEO of LGBTQ+ advocacy group GLAAD. But that practice has become trickier amid a “very aggressive legislative session” in which hundreds of anti-LGBTQ bills — which target trans rights and how sexual orientation and gender identity are taught in schools, among other topics — have been introduced by lawmakers across the country.
Despite the mounting headlines and sustained criticism of Bud Light, corporate boycotts are “overstated,” and those offended by campaigns tied to Pride Month are in the “minority,” Ellis said. In a separate “Squawk Box” interview Thursday, she said that there are hundreds of companies, including Nike, North Face and Walmart, still running pride campaigns in the face of pressure from “extremists.”
She also suggested that opposition to Anheuser-Busch’s reaction to the boycott — including decisions by some gay bars not to carry Bud Light — had driven the slowing sales more than the initial conservative backlash.
In April, the brewer ran a March Madness promotion with trans influencer Dylan Mulvaney, who shared a customized Bud Light can on Instagram. Anti-trans politicians and celebrities soon called for boycotts of the beer.
Anheuser-Busch CEO Brendan Whitworth apologized for the dispute by claiming his company “never intended to be part of a discussion that divides people.” But his statement neither defended the partnership with Mulvaney nor seemed to appease the brand’s conservative critics — adding to pressure across the political spectrum. Two marketing executives — Alissa Heinerscheid and Daniel Blake — were placed on involuntary leave after their role in the partnership.
The boycott led to Anheuser-Busch losing business to a degree rarely seen following online backlash. Bud Light has seen weekly sales decline in the double digits, and it lost its spot as the top-selling beer in the U.S. for May, according to analysis by Bump Williams Consulting using NielsonIQ data.
Anheuser-Busch shares have also fallen nearly 15% since the promotion with Mulvaney.
The boycott of Bud Light, while an outlier in many ways, underscores a larger struggle that corporate America faces as it navigates an increasingly polarized social landscape where taking political positions, or even engaging in multicultural marketing, can be taboo for some customers, said Frericks.
“Anheuser-Busch has lost sight of who its customer is,” said Frericks, who left the company last year and now works at Strive, an asset management firm that has criticized environmental, social and governance investing platforms. “A brand like Bud Light is a brand that has never been political, but now they’re being shunned by customers on the right, who see this partnership as a very politicized position they’ve taken, and also customers on the left who don’t feel supported amid the backlash.”
Frericks said that company leadership at first “underestimated” the gravity of the situation and its subsequent decision not to defend the promotion.
Anheuser has pushed to win back its customers on both the right and left. The company has said it still is backing initiatives to support LGBTQ+ Americans.
“We remain committed to the programs and partnerships we have forged over decades with organizations to drive economic prosperity across a number of communities, including those in the LGBTQ+ community,” a company spokesperson told CNBC. “Recently, we shared that our partnership with the [National Gay and Lesbian Chamber of Commerce] to empower LGBTQ+ owned small businesses across America will continue for the second year.”
During a panel at last week’s Cannes Lions International Festival of Creativity, Anheuser-Busch’s global Chief Marketing Officer Marcel Marcondes called this a pivotal moment in the marketing industry
“When things get divisive and controversial so easily, I think it’s an important wake-up call to all of us marketers to be very humble,” Marcondes said.
Pride Month merchandise is displayed at a Target store on May 31, 2023 in San Francisco, California.
Justin Sullivan | Getty Images
It isn’t just Bud Light — brands across the board are facing calls to boycott their goods or services. Even though no other company has appeared to take the financial hit Anheuser-Busch has, the backlash has in some cases led to the curbing of LGBTQ+ inclusion that had become commonplace in recent years.
In recent months, other companies caught in the crosshairs of reactionary criticism for Pride Month campaigns include Kohl’s, Nike, Adidas, Jack Daniel’s, Ford and Chick-fil-A. None of those companies have appeared to suffer any financial consequences, or pulled LGBTQ+ marketing campaigns.
Last month, Target announced it would be removing some LGBTQ-themed items from shelves after what a company spokesperson described as “threats” to employees over a line of Pride Month merchandise.
Through a spokesperson, Target declined to say which merchandise it pulled from shelves or share details of the incidents that led to its decision. The Associated Press has previously reported the merchandise includes “tuck-friendly” swimsuits that allow trans people who have not had gender-affirming operations to conceal their private parts.
While the big-box retailer has not seen sales slump due to the backlash in the same way Bud Light has, the Target boycott has implications that go beyond the brand or its finances because employees are being harassed, said Lawrence Glickman, a professor of American Studies at Cornell University and the author of “Buying Power: A History of Consumer Activism in America”.
Glickman said Target’s boycott is “unusual from the way consumer boycotts have worked in the past” due to its “aggressive, confrontational style” and organizers “associating workers with company policies they have no say in.”
He warned that Target’s decision to pull its Pride merchandise “is going to embolden those boycotters to maybe take on other companies using the same tactics, or return to Target if they see something else they don’t like.”
Earlier this month, Starbucks workers in Oklahoma were told restrictions on decorating were out of a concern for safety after recent attacks at Target stores, the union representing baristas said. Starbucks told CNBC that it unwaveringly supports the LGBTQ+ community and hasn’t changed its policies for store decorations.
Another outlier has come in the form of the Walt Disney Co., which has stood firm against a protracted anti-LGBTQ+ movement in Florida.
Disney isn’t just fending off calls for a boycott of its theme parks, it is also lodging a legal battle against Florida Gov. Ron DeSantis, whom the entertainment giant accuses of punishing it for its condemnation of a state law critics have called “Don’t Say Gay.” The measure restricts the education of LGBTQ topics in the state’s public schools.
The ongoing legal feud does not appear to be affecting favorability at Disney World parks in the state, according to data from Morning Consult Brand Intelligence.
Morning Consult determined that Republican survey respondents had a less favorable view of Disney than Democrats did. But it also found there was no partisan divide among the company’s park visitors.
“This suggests that while Disney has become a major player in the Florida culture wars, its guests are less concerned with the brand’s politics than the general public,” according to Lindsey Roeschke, travel and hospitality analyst at Morning Consult.
In fact, theme parks were a bright spot for Disney during its most recent quarterly earnings report. The company’s parks, experiences and products division saw a 17% increase in revenue to $7.7 billion. Around $5.5 billion of that revenue came directly from its theme park locations.
“If Disney didn’t care so much about diversity internally, I think they would have just caved and done what was being asked of them by Florida politicians,” said Brayden King, a leading researcher of consumer activism at Northwestern University.
“But for them, these are issues that really matter to who they are, their identity, their culture, their employees and even how they market their products currently,” King added. “They see themselves as a global brand, not just as a Florida brand.”
Shoppers carry bags across a Pride-themed, rainbow-colored pedestrian crossing.
David Cliff | Nurphoto | Getty Images
Companies are walking a tightrope as they try to court a community that tends to have high rates of disposable income, receptiveness to tailored advertising and brand loyalty, said GLAAD’s Ellis — but that has also become the target of a storm of legislative attacks and cultural criticism.
Conservative celebrities and consumers have appeared to latch on to the political targeting of LGBTQ+ individuals and jeopardize inclusion of the community.
But GLAAD and other groups are taking steps to ensure companies do not abandon their outreach.
GLAAD, along with more than 100 others groups, wrote a letter to Target last month encouraging the retailer to reject and speak out against anti-LGBTQ extremism during Pride Month. Ellis said she has been counseling more than 200 corporate partners who’ve been “caught off guard” by the animosity.
“Whether it be Target or Bud Light, companies have been very supportive of our community for decades and have never seen this kind of animosity,” said Ellis. “But they shouldn’t back down now and should absolutely proceed with pride.”
GLAAD also announced Thursday that more than 50 companies such as Cisco, Intel, Pfizer and Salesforce signed a commitment to “reject the harassment and bullying of the LGBTQ communities and support the businesses that are trying to serve all in a safe and inclusive manner.”
In the “Squawk Box” interview Thursday, Ellis urged companies to continuing standing their ground if they want the support of the LGTBQ+ community and the business that comes with those efforts.
“Our community and our allies talk with our dollars,” Ellis said, “and we don’t want to support a company who didn’t support us when the going got tough.
— CNBC’s Melissa Repko, Sarah Whitten and Amelia Lucas contributed to this report