Budweiser conjures up a tapestry of American images: baseball, Memorial Day, the Fourth of July, and charred bratwursts to the tunes of “Yankee Doodle” and “The Caisson Song.” Along with the cotton gin, railroads, and Tin Lizzie, it is the symbol of America’s brawny determination and purposeful citizenry. There is even a limited-edition Budweiser beer stein celebrating the Norman Rockwell centennial, 1894–1994. Anheuser-Busch is the iconic beer enterprise that produces some of the most glorious and memorable advertisements in corporate America — and, unfortunately, we don’t get to see the Bud Clydesdales until the Super Bowl.
Anheuser-Busch is Americana: It speaks to us, “We are all American.”
But there is an eerie silence in St. Louis: Bud Light and Budweiser haven’t tweeted since mid-April, and the transgender controversy does not abate.
How could Anheuser-Busch have committed an unforced error to mess up its public image so badly? What went wrong in St. Louis? What did those good burghers think, and when did they think it? How could phalanxes of so-called brand-savvy MBAs at headquarters blow it like they did? Anheuser-Busch will be the subject of case studies at business schools for years to come.
All this travail is because of the company’s marketing partnership with the self-identified transgender “woman,” Dylan Mulvaney, who endorsed Bud Light on Instagram — causing a nasty consumer backlash. Budweiser’s customer base is decidedly not progressive and not woke. It revolted over Mulvaney’s image on a can of Bud Light and boycotted the product.
The anti–Bud Light backlash continues to be fierce. Sales of the product are continuing to fall at an increasing rate, off almost 30 percent for the week ending May 20, based on the latest data available. Further, competitors such as Coors Light and Miller Lite are said to be benefiting. In a high-volume business like much of the beer industry, even a slight decline in revenue can have a devastating effect on profitability. The stock price of Anheuser-Busch Inbev SA, the Belgium-based holding company, is off 13 percent in the past month. Further, there appears to be contagion, with Budweiser, Michelob, and other brands reporting recent declines in sales.
One of the first principles of marketing is to know your customer. As the late Al Ries, the highly respected guru of brand positioning, has written, to understand your customers you have to “go down to the front.” The front is where purchasing decisions are made — the detergent aisle at Walmart, the hair care section of CVS, or the Jeep Cherokee showroom, for example. At the front, the mind of the consumer is in action, and corporate product strategies should aim to understand that mind. Were he with us today, Ries might well advise that the front is not presentations festooned with jargon in sleek corporate conference rooms; nor is it a corporate offsite in Aspen or Sulfur Springs, West Virginia, where the PowerPoint is the one actually in charge. For Budweiser, the front could be the barbeque, hometown parade, seats by first base, or the 50-yard line.
Ries might also say that Anheuser-Busch has fallen into what is known in marketing as the line-extension trap, the extension of a brand name to new products. If Budweiser is the “King of Beers,” why dilute the product franchise with something called “Bud Light”?
So, has Anheuser-Busch lost sight of its customers and lost its way? In 2008, the company was acquired for $52 billion by InBev, the European beer colossus based in Leuven, Belgium, with over 500 brands. At the time, it seemed like an odd intrusion into corporate America by a company whose name sounded more like a transfusion system or surgical procedure. “This InBev’s for you” and “When you say InBev you say it all” just couldn’t have the same brand cachet in the bleachers. The memories of the traumatic acquisition of a paternalistic company that was part of St. Louis continued for many years.
It may be that wokeness was in the air at the St. Louis headquarters of Anheuser-Busch. Senior marketing executives, now placed on leave, may have sensed that their careers would benefit from being seen as progressive — and so they lined up behind Dylan Mulvaney. Another but less likely theory could be that the impetus came from Belgium, home of the European Union, known for collectivity and Euro-smugness.
Anheuser-Busch needs to understand the front and its customers’ mentality. It may also need to lighten up on PowerPoint and corporate offsites disconnected from reality. It may take a while for Budweiser to regain its panache — and, in the meantime, this Bud’s definitely not for you.
Frank Schell is a business strategy consultant and former senior vice president of the First National Bank of Chicago. He was a lecturer at the Harris School of Public Policy, University of Chicago, and is a contributor of opinion pieces to various journals.
