Daily Digest:
w/c 15 July - Financials earnings reports kick off the week, then we get Netflix results Thursday. US Retail Sales is the standout macro data this week on Tuesday. We also get the latest ECB interest rate decision on Thursday.

Go Woke Go Broke – Bud Light And Dylan Mulvaney Isn’t Quite That Bad


Bud Light decide to use the transgender influencer Dylan Mulvaney, Anheuser Busch (NYSE: BUD) shares lost some $5 billion. There we are, we have proven the go woke, go broke mantra once again.

Bud Light

Except, obviously enough, it’s not in fact this simple. We here are about money and stocks, not fashionable memes, so we do need to look a little more deeply at this.

So, what did Bud Light try to do with Dylan?

Sure, it’s true, Bud Light thought it would be cool to use Dylan, making some cans which featured her face – a not uncommon trope for the brewer, to make celebrity cans in large enough quantity only to be pictured with the celebrity. This brought out a reaction. Kid Rock started firing guns at cases of Bud Light (which brought the response from Bud of “Thanks for buying our beer”) and Travis Tritt refused to allow it on his tours any more. The fall in the stock price, well, some of that could just be happenstance. But it definitely happened, several percentage points were shaved off the market capitalisation. Not because profits fell, it’s far too early for that, but over worries that they might.

Dylan Mulvaney Bud Light

We do also know that the marketing VP for Bud Light is now taking a leave of absence. That indicates higher ups not all that content. And they’re right not to be – reports are that case sales of Bud Light dropped 10.7% the week following the PR stunt. Going broke is obviously too much, but not making profit is enough reason to reverse course. Which is what Anheuser Busch seems to be doing.

But it’s money that matters, not wokeness

But this is just what we can pick up from the usual sources. Now we need to think more and more deeply. We’re interested in money so what does this all mean for money? The answer is not, no it isn’t, go woke go broke. Because other people have pandered to particular and progressive causes and made lots and lots of money. Lush, the soap and bubble bath people for example. Body Shop might be an earlier exemplar. There’re plenty who pay a premium for their electricity because they’re told that it’s green.

So wokeness and money losing are not in fact joined at the hip. But sometimes – as with Bud – such actions can lose business for the company and money for the shareholders. What we desire therefore is some sort of dividing line. Some decision-making rubric by which we can measure such things.

Think about what Rupert Murdoch did

At which point, change the example – the much talked about Fox News. The origin there wasn’t that Murdoch brainwashed half of America into being right wing. He noted that there were tens of millions of Americans who weren’t being well served – according to their beliefs that is – by the current media. So, he set up a TV station to pander to their beliefs. That was a wild success of course.

Fox News

And that’s what the consideration about folk going woke should be too. If you’re selling soy lattes to the noodle-armed then why not go woke? That’s the sort of thing your target market already believes, you’re reinforcing that your brand is supportive of their prejudices. Beer, well, beer is that more than a little different. It’s, umm, rather more traditional perhaps. And the beliefs of some large number of people who do buy it might well be affronted, not supported, by wokeness.

Woke is – like being conservative – a marketing issue, therefore. More than that, it’s not, or should not be, an attempt to lead the consumer base. It’s about following it instead. And that’s what can give us that metric by which we can measure corporate wokeness attempts.

Brands matter, but get them the right way around

Forget what the salaried classes who run companies seem to think. Or at least don’t worry about it, observe instead. If they’re clearly chasing what the desired consumers already believes, then it might well be profit enhancing. If they’re attempting to lead – or berate or criticise – those same desired customers then it’s not going to work and the go broke comes into play. But this isn’t confined to woke – it holds for all forms of marketing and advertising and any set of beliefs.

That might all sound a little political but then the political does matter. Disney telling little girls not to like pink probably isn’t going to work, the hunting bow manufacturer making fun of men who like pink might well. Don’t forget Lululemon lost a fortune trying to tell fat girls not to wear yoga pants – insulting your customer base just isn’t a good idea. And that’s what the metric is and should be by which we judge such things. Don’t forget, a brand is really a collection of attributes which the potential and intended customers think they want to be associated with. It’s that consumer belief that comes first, the being able to sell to them second. So, those like Bud Light who attempt to confront the beliefs of their customer base – or Lululemon for that matter – are going to fail and we should sell out as soon as we see the ads. Those who softsoap and give a warm backrub to what they already believe may succeed.    


Tim Worstall is a freelance journalist who also used to be the world's leading scandium wholesalers (one of the rare earths). His Wikipedia entry gives a flavour.

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