February 9, 2025 • 41 mins
Newt talks with Anson Frericks, former president of Anheuser-Busch Sales and Distribution, about the significant backlash faced by Bud Light following the controversial partnership with transgender influencer Dylan Mulvaney in 2023. The partnership, which included a $15,000 giveaway during March Madness, led to a boycott and a notable decline in Bud Light sales. Frericks discusses the impact of the partnership, the historical marketing success of Bud Light, and the cultural shift within the company following its acquisition by InBev. He also highlights the company's failure to effectively manage the crisis and suggests that selling the U.S. business could be a potential solution for recovery. Their conversation also covers the broader implications of corporate decisions influenced by ESG and DEI policies and the importance of understanding and maintaining brand identity. His new book is, “LAST CALL FOR BUD LIGHT: The Fall and Future of America’s Favorite Beer.”
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Episode Transcript
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Speaker 1 (00:04):
On this episode of news World, Dylan Movany, a transgender influencer,
partnered with bud Light in a sponsored Instagram video on
April first, twenty twenty three. The video promoted a fifteen
thousand dollars giveaway during March Madness. The partnership sparked a
huge backlash and a boycott of bud Light. Just days later,
(00:26):
singer Kid Rock used several cases of bud Light for
target practice, opening fire in them with a gun in
response to the news that anheuser Busch made a transgender
woman a bud Light spokesperson. The fallout was a drop
in bud Light sales and a shakeup of the US
based marketing team and other executives. I'm really pleased to
(00:47):
welcome my guest. Anson frieris former president of Anheuser Busch
Sales and Distribution. His new book is Last Call for
bud Light, The Fall and Future of America's Favorite Beer,
and I have to say it is a great answering.
(01:12):
Welcome and thank you for joining me on nuts World.
Speaker 2 (01:14):
Oh, thanks for having me. Really excited to be here.
Speaker 1 (01:17):
You've mentioned that your earliest memory of Anheuser Busch was
watching their Super Bowl commercial in nineteen eighty nine when
you were five years old. What made that moment so
impactful for you and was there something about the brand
or the commercial that left a lasting impression on you
at such a young age.
Speaker 2 (01:35):
Well, I think there were two things that left the
lasting impression.
Speaker 3 (01:38):
First off, from Cincinnati, Ohio, So I'm a Cincinnati Bengals fan,
and that was the year you had the Cincinnati Bengals
Boomer Sison playing Joe Montana in the Super Bowl. So
my parents had a big party that year. And then
the other thing that made it more memorable is that
was the first year that you had the Bud Bowl.
And if you remember this is when you had Budweiser
versus bud Light.
Speaker 2 (01:56):
They had cans of beer. They were competing against each other.
Speaker 4 (02:00):
Football fans get ready for the Battle of the Century.
Speaker 2 (02:06):
It's unbeaten Budwiser.
Speaker 4 (02:07):
It takes on need defeated bud Light in b versus
bud Light in bud Bull One budd Bull Woe.
Speaker 2 (02:16):
This time it's for reu.
Speaker 3 (02:18):
It was the first time ever that actually a company
had run a Super Bowl ad specifically about the Super Bowl,
just for the Super Bowl as well, and it was
a big deal where consumers they could predict the score
of the bud Bowl and they could win free beer
in money afterwards. So it was a huge success for
the company and really is what ignited bud Light sales
become the largest beer brand in the country was that
commercial campaign.
Speaker 1 (02:38):
It was amazing how bud Light really became an extraordinarily
successful brand.
Speaker 2 (02:45):
Amazing successful brand if you think about it.
Speaker 3 (02:47):
Almost the height of beer and beer marketing was the
decade that followed.
Speaker 2 (02:51):
It was the nineties. It was the early two thousands.
Speaker 3 (02:53):
You probably remember there was the Budweiser Frogs commercial.
Speaker 2 (02:56):
Bood Wines, Why why, why there was a bud Light
real manut of genius commercials.
Speaker 4 (03:09):
Real men of genius, real man of genius. Today we
salute you, mister footlong hot dog inventor.
Speaker 2 (03:19):
Mister foodlong hotdog.
Speaker 4 (03:21):
Invent When conventional wisdom said no one could make a
hot dog longer than six inches, you dared to dream,
to dream. You knew the limitations of a regular size
hot dog bun, and you ignored them. Happen you made
a ten inch wiener and people cheer, but you weren't satisfied.
(03:42):
You said, wait, I think I can still give you.
Speaker 2 (03:46):
Two more inches go.
Speaker 4 (03:49):
So this Bud's for you, mister hot dog hero, because
you gave every single one of us our fondest wish
a bigger wiener.
Speaker 3 (04:01):
Thank you.
Speaker 2 (04:05):
There was the was up guys from Budweiser, and that
was really the pinnacle.
Speaker 1 (04:14):
Yo, the pick of the phone. Hello.
Speaker 2 (04:18):
Was that.
Speaker 3 (04:22):
Beer sales peaked in the US and the early two thousands,
I think partly because of the genius of some of
these marketing campaigns that just made kind of beer part
of American life. It was part of sports, that was
part of music.
Speaker 1 (04:33):
So after your five year old experience, as you were
growing up, what did Buzzweiser represent to you?
Speaker 2 (04:40):
I don't know.
Speaker 3 (04:41):
To me, it was always like Budweiser was America in
a bottle. I mean, it was Clydesdale's, it was sports,
it was backyard barbecues. It brought people together, and that
beer was always something that was never really partisan. People
were Democrats, Republicans, you know, black, white, I mean, everybody's
drinking beer. It was usually people were having a good
time and people were having fun.
Speaker 2 (04:59):
So that's kind of what the brand represented.
Speaker 1 (05:02):
Now as I understand it, you were collecting as a kid.
Now before you can even drink. You're collecting memorability like
Neon signs, steins, vintage cans. I mean, I had this
image of your bedroom as sort of a shrine Dan
Heiser Bush.
Speaker 2 (05:17):
That's kind of what it was. I mean, God, bless
my mom.
Speaker 3 (05:19):
I think she thought that was better than me drinking
the product when I was at that age. So she said, okay,
i'll have you had the Neon signs and the blow ups.
Speaker 2 (05:26):
And the kind of pintackers on the wall. My child
did better. I mean it really looked like a sports bar.
I thought that was fun. That was cool.
Speaker 3 (05:32):
They did great marketing, and I think at the lunch table,
I don't know, in junior high in high school, if
you knew the latest bud light catchphrases of you know
what's up? Or romanto genius, I don't know, batching some
social currency.
Speaker 2 (05:42):
So I thought it was kind of cool.
Speaker 1 (05:44):
See I had this image of you sort of walking
an Heiser Bush fan. How did your friends react to that?
Speaker 2 (05:51):
Yeah, I don't know.
Speaker 3 (05:52):
There was this big study that was done, and I
remember it. I showed that I graduated from high school
in two thousand and two, and enough apparently that was
the year that underage drinking peaked in the United States,
And I don't know that I had to do with
the success of the marketing of the brand that wasn't
really who they were supposed to target in the nineties
and early two thousands. But I just think that at
(06:13):
that time Beer was cool, Budweiser was cool, bud Light
was cool. They kept winning all these Super Bowl ad
Meter Awards, super Bowls coming up this week, and the
biggest honor of a marketer or a brander is this
USA today where they take the pulse to the entire
country and entire country ranks, what are their favorite Super Bowls?
I mean, Annhezard, Bush, Bud and bud Light were winning
them almost every single year at this time, so they
(06:33):
just really understood sort of the customer, the culture where
the country was. And I think I was probably just
similar to a lot of guys growing up that I
don't know, when you got to a certain age, you thought, hey,
I'll be able to drink some Buds and bud Lights
and hang out with my buddies and have some fun
and good times.
Speaker 2 (06:47):
So I don't know that was what the culture I
grew up in.
Speaker 1 (06:50):
I have to ask, do you still have your Budweiser
frog fingerings.
Speaker 3 (06:53):
Oh, I got him somewhere down my parents' basement. I
think my mom saved all this memorability and all the
stuff that I had for my childhood bedroom. So it's
all down in the basement somewhere. I'm still trying to
convince my wife to let me figure out a room
in my house to put all that stuff up, but
I haven't convinced it yet.
Speaker 1 (07:07):
You could someday open up a bud Light museum.
Speaker 3 (07:09):
I probably could at some point. Yeah, with all the
stuff that I have. That's the dream. At some point,
if the book does well enough, maybe we'll do that.
Speaker 1 (07:16):
As a kid, you really were fascinated with bud Light,
and then you make the transition and you actually go
to work for them, And what was that transition like?
Speaker 2 (07:24):
Yeah, it was interesting.
Speaker 3 (07:25):
Even though I grew up liking bud Light, liking the company,
liking the commercials, I never thought I would end up
working there. After undergrad I went and I worked at
a private equity firm out of Boston, and I went
back to business school and I was in business school
working at a hedge fund in New York City when
I ran into some folks at Anhuser Busch in BEV
and they had moved their global headquarters to New York
(07:46):
really after buying Anheuser Busch in the US, and it
was a couple of folks from three G Capital. They
were really the owners of the Annehuser Busch in Bev
now in New York. And after running into them at
a bar in New York, they convinced me to come
work for what they said was kind of the world's
largest private equity firm that happened to sell beer. And
so given my kind of background in finance, but given
(08:07):
my sort of enjoyment of the products.
Speaker 2 (08:09):
I thought it could be kind of a pdentially match
made in heaven.
Speaker 3 (08:11):
They told me that this company was a meritocracy, that
you could grow quickly in the organization, that the company
had future plans to grow. They were going to go
buy brands group of Medelo in Mexico and sab Miller,
who knows, maybe by other big companies Pepsi down the line.
Speaker 2 (08:24):
So that was exciting, and.
Speaker 3 (08:25):
So they convinced me to join them, and the year
twenty eleven is when I joined the company. Actually originally
joined them in Belgium in a finance job, and then
moved to Saint Louis and New York and Denver and Atlanta,
So moved a bunch of times over my eleven year
career with them.
Speaker 1 (08:41):
In two thousand and eight, Anheuser Busch, which had been
a classic American company and I'd spent time over the
years with Algie Bush, it was acquired in a hostel
takeover by InBev, which was a smaller but very aggressive
Belgian based company. Can you sort of walk us through
that kind of experiencement, What was it like seeing your
company go through such a dramatic transition.
Speaker 2 (09:03):
I joined just a couple of years afterwards.
Speaker 3 (09:04):
So a lot of the people that were around from
call at the Augie Bush and the Bush family days
and who had really built Anheuser Bush into what had
become had become the largest kind of beer company.
Speaker 2 (09:13):
In the world, behind the success of Bud and Bud Light.
Speaker 3 (09:16):
And they did it by great marketing, branding that was
their specialty. But then a company called InBev, which was
Belgian based, kind of run by a group of Belgian
and then Brazilian families. They had a different philosophy than
Annezer Bush did, and their philosophy was really they were
more cost cutting. They employed a philosophy called zero based budgeting,
which was kind of the antithesis of what Anne Haser
Busch was and how annezer Busch built the business off
(09:38):
great branding. InBev, they would come in to cut the
cost and candidly in the early in mid two thousands,
there were a lot of cost to cut at Annheser Busch.
I think the company owned eight helicopters at the time.
They owned I don't know, a fleet of jets, They
owned SeaWorld, they Busch gardens, there were a lot of
just kind of non core beer assets they'd picked up
over time. So unfortunately the company got a little bit
bloated and they became susceptible to a take over as
(10:00):
the Bush family did not have a lot of stock and.
Speaker 2 (10:03):
The stock price hadn't moved in the number of years.
Speaker 3 (10:04):
So they were taken over by a competitor InBev in
two thousand and eight and two thousand and nine.
Speaker 1 (10:09):
How did that change the company's culture?
Speaker 2 (10:12):
Yeah, I mean it changed the company's culture dramatically.
Speaker 3 (10:14):
I think that the InBev organization when they came in,
of course immediately did away with sort of the private jets,
did away with the helicopters, did away with thousand dollars
expense theres and there was a lot of excess that
went away. So some that was good because if you're
a business and you just get bloated and you are
wasting money and you're not necessarily investing in the right.
Speaker 2 (10:31):
Way, some of that's positive. I would say.
Speaker 3 (10:33):
The negative things that changed about the organization was really
sort of the hiring I think specifically Americans and Americans
that were really from the geographical center of the country
that really understood their customer.
Speaker 2 (10:45):
That was one of the biggest shifts.
Speaker 3 (10:46):
That happened InBev brought in a lot of their marketers
that were from Belgium, or that were from China, or
that were from sort of overseas that didn't really understand
the US customer. And they also didn't invest as much
into marketing and building brands as Anheuser Bush did.
Speaker 2 (11:00):
They thought that these kind of.
Speaker 3 (11:01):
Brands could just last forever and that people would continue
to buy them.
Speaker 2 (11:04):
But as we know, you have to continue to invest.
Speaker 3 (11:07):
Into brands, you have to continue of the pulse the country,
and I think that was probably the biggest disconnect is
it went from a marketing organization to a financial organization,
and that can only produce value for so long.
Speaker 1 (11:17):
Historically, weren't brands like this that were national brands. Weren't
they basically represented locally by locally owned companies that were
doing the marketing and had the network of personal relationships.
And if I remember correctly, Sidney McCain's father was a
big Budweiser distributor in Arizona. Did NBAV change that kind
(11:37):
of locally controlled distribution system or did they just use
it as it existed.
Speaker 3 (11:43):
They used it as it existed where they legally had to.
But in terms of how the alcohol system works, it's
actually pretty interesting. Nose a three tier system where legally
you have manufacturers of alcohol like Anhezard Bush, they have
to sell to independent third party wholesalers that are family
owned in every county across the US, and then those
wholesalers have to sell to independent bars and restaurants and
(12:06):
liquor stores and others. And unfortunate, when NBEV came in,
they kind of turned this system upside down. Historically, the
old Anheuser Busch and the Bush family had worked with
these wholesalers, these distributors, they were great partners, equal partners.
But then when NBEV came in, they tried to start
buying up all of these family owned businesses across the US,
and they thought that there was a problem with these
(12:26):
independent family owned businesses. They weren't running their business as well,
they didn't understand how to market. And I think that
was a completely misnomer. And has a Bush tried to
more steer from the center. I mean they almost had,
I don't know, it was almost like a Communist party
way of controlling the system, where they tried to steer
from what they called steer from the center, dictate all
marketing from one location, as opposed to letting their independent
(12:47):
wholesales across the country to be able to market to
what people wanted to see in Phoenix versus New York
versus Boston. So you mentioned, I mean great wholesaler family,
the McCain family, They owned the wholesale ship in Arizona.
Annie McCain, I mean, great person, a great historic partner.
But then when you have this other organization trying to
come in buy your business or tell you what to do, there's.
Speaker 2 (13:06):
Obviously a reaction to that.
Speaker 3 (13:08):
It was a tough relationship early on between InBev and
their local wholesalers.
Speaker 1 (13:12):
Now, you also mentioned that the decay of bud light
really occurred over about a fifteen year period with lots
of relatively small decisions. Would they accumulate? What did you
mean by that?
Speaker 2 (13:26):
The one thing we just spoke about, I mean, fraying
those distributor relationships was a big part of this. Where
historically there was trust between Annehser Bush and their wholesalers.
They worked together, it was a great symbiotic relationship, but
they started fraying that partnership.
Speaker 3 (13:39):
Another thing that really made the distributors lose trust and
anne Haser Busch was Anne Haserbush moved the sales and
marketing headquarters of the company, which had always been based
in Saint Louis, Missouri, I mean kind of the geographical
center of the country, very close to Peoria, Illinois. There's
a great saying in marketing that if it plays in Peoria,
it generally plays across the country. So in Saint Louis
there was just a way to within a fifty mile
(14:01):
radius of Saint Louis, you have urban areas, you have
rural areas, you have suburbs, you have farms. It was
a great way to kind of understand your brands and
who buys them. It's a very high share market as well.
But in the twenty fifteen twenty sixteen time period, the
company they moved they're marketing headquarters from Saint Louis to
New York City. When they did that, they hire different
agencies that were more in New York. They hired different
(14:21):
people that had only lived in New York City their
entire lives, and those people they're seeing. Even how you
sell beer in New York City, it's very different than
you do in the rest of the country. In New
York City, you don't have any walmarts, you don't have
really any big kind of convenience store chains. You don't
have any chili's or bars and restaurants chains like that.
It's just very different. And then so a lot of
these changes really added up. Where you had frame relationships
(14:43):
with wholesalers, you change the geographic place where your sales
and marketing team was, you're hiring different individuals, and then
you've sort of adopted different philosophies as well. One really
around these policies of ESG and Dei, which the company
had really never subscribed to historically, but because they were
owned by Europeans, and this is more of a European
philosophy of how businesses should act, there were a lot
(15:05):
of kind of small changes that added up and ended
up culminating in this partnership at Dilan Molvania.
Speaker 1 (15:11):
If I remember correctly, many of the great national beer
brands came out of the Midwest.
Speaker 3 (15:16):
You're right thinking about Miller was out of Milwaukee. Perhaps
is out of Milwaukee.
Speaker 1 (15:20):
I guess you could argue Youngling in Pennsylvania, but it's
in western Pennsylvania. It's not in Philadelphia. But there was
a sense that, of course beer had been to a
great degree a German product, then the Germans had migrated
into that whole region. But I can tell you being
married to somebody from Wisconsin, there is a Midwestern style
and rhythm that has no relation to New York City.
Speaker 2 (15:42):
You're exactly right.
Speaker 3 (15:43):
This is a different way of life, there's different philosophies,
and I don't know, I think beer more plays towards
that laid back sitting around in a call to sack.
You know, you know your lawn and you want to
have a beer afterwards. That doesn't really play well in
New York. New York is more of a fast paced
and cocktail bars high end. It's a different philosophy, at
different mentality, a different vibe, different lifestyle, and frankly, a
(16:05):
different customer in a lot of cases.
Speaker 1 (16:08):
I talked to her one time with the Guinness people,
and they said they had realized that Guinness essentially is
bought to sit and talk to people, and so they
were opening up all these Irish bars because people would
not buy Guinness to go home and drink alone, but
they'd go to the bar. Totally different culture. And of
(16:29):
course you're producing a beer that is perfect for watching
baseball or football or basketball. I mean it's sort of
a sports beer, if you will.
Speaker 3 (16:36):
That's it lagger beer specifically, they're supposed to be sessionable
with laggers.
Speaker 2 (16:40):
That's the beer that you drink.
Speaker 3 (16:41):
A couple of them hanging out with friends over the
course of the game, which is different than an ipa
or kind of like a different beer. You might only
have one or two of them, but like it became
one of the largest beers because it was sessionable and
because of a sociable and because it brought folks together.
Speaker 1 (17:10):
They make a decision which I had never seen, putting
context into your book. But in twenty sixteen, they create
the bud Light Party, thinking it's going to bring people
together and then run ads guaranteed to drive people apart.
It's a perfect example of elitist thinking with no understanding
of the country they're talking to.
Speaker 3 (17:29):
One hundred percent. And this was part of the problem.
This was the same time when the company they moved
their headquarters from Saint Louis to New York City. At
the time, they had a Belgian who was running marketing
for the company for the entire US, and then they
had another Belgian person who was running marketing for bud Light.
And this is when you just have people that aren't
from the US, don't culturally get the US, and they're
(17:50):
trying to bring different values in. So they came up
with this campaign called the bud Light Party. And this
was during the election of twenty sixteen where Trump and
Hillary are running, and they tried to make a little
bit of a parody out of the campaign by saying,
you know, essentially vote for bud Light. But even that campaign,
a lot of these wholesalers, these independent wholesaleres we were
talking about. They were very much against this campaign. They
(18:13):
didn't want bud Light to get anywhere close to politics.
And even who bud Light hired to run that campaign,
which was Seth Rogan and Amy Schumer, tend to be
very progressive and they tend to be much more leftist,
and the campaign itself, it was not a success at all.
They started running even ads talking about how bud Light
they tried to make fun of it, about gender equality
and about LGBTQ rights and others, but it just didn't
(18:36):
work because it was always seen that bud Life's has
been funny in humorous, stayed us far away from politics.
Speaker 2 (18:40):
So they actually after about five or.
Speaker 3 (18:42):
Six months, they canceled the campaign because it was performing
so poorly and so badly. The person who was running
bud Light at the time was a Belgian guy. He
ended up essentially getting fired from that job. But the
company of course didn't learn its lesson, as seven or
eight years later they had an even worse campaign with
the dylanmov APCE.
Speaker 2 (18:58):
But they should have taken their lessons that time.
Speaker 1 (19:00):
But I was surprised to read that when they ran
the bud Light Party sales fell like five percent in
the first half of the year. I mean, people were
just rejecting it.
Speaker 2 (19:09):
They were exactly.
Speaker 1 (19:11):
Why didn't that feedback suggest to leadership that maybe they
were doing something wrong.
Speaker 3 (19:18):
I think part of it is that in large organizations,
especially with the move to New York City, you lost
a lot of the loyalty to the company, and there
was a lot of employee turnover. When the company was
based in Saint Louis, people were there, they were lifers
for Saint Louis, and you had a lot of longevity,
Whereas when the company moved to New York City, you
have people that can go and they can go work
at anhazard Bush one week, and then they jumped to
(19:39):
Facebook the next week, and then Google the next week,
and then Banks and McKenzie. So turnover was incredibly high
at this time, and so I almost think the company
had really lost even sort of that muscle memory from
even seven years ago about what happened with the blud
Light Party campaign. And then really a lot of things
had changed as well over the seven year time period
between twenty sixteen and twenty three, specifically in terms of
(20:02):
more philosophically knew about what is.
Speaker 2 (20:05):
The purpose of a business and the purpose of a corporation.
Speaker 3 (20:08):
And historically in the United States, everyone had kind of
abided by the Milton Friedman in view of the world
that the purpose of a corporation is the service shareholders.
Speaker 2 (20:16):
How do you do that? You make great products and services.
Speaker 3 (20:19):
But especially after Trump was elected in twenty sixteen and
pulled out of organizations like the Paris Climate Accords, the
World Health Organization, there was this real allergic reaction, especially
from West coast states that control a lot of money
and pension funds, state of California, state of New York,
a lot of European sovereign wealth funds, and they started
putting a lot of pressure on business because they owned
(20:41):
shares on a lot of businesses to evolve and to
adopt a broader view of capitalism and a stakeholder capitalism.
And they essentially said, well, if Donald Trump and government's
not going to fix existential crises of you name it,
climate change and systemic racism and all these other issues,
that now business needed to solve these issues. And so
there became a lot of pressure on businesses over the
(21:02):
kind of that seven year time period to get more
involved in issues and you saw sort of an uptick
in companies getting involved in a lot of social and
political issues. And I think that Anheuser Bush was uniquely
susceptible to a lot of these pressures, being a European
based company and abiding by this more European stakeholder capitalism
model of business pushed by Klaus Schwab.
Speaker 2 (21:21):
World economic for him and kind of the Davos crowd.
Speaker 1 (21:24):
There's a very large block of Americans who love sports,
and they love almost any kind of sports. Whether you're
talking about Ultimate fighting or you're talking about baseball, soccer, hockey,
that doesn't matter. This like sports, sports are inherently conservative
because you get winners and losers. There's a meritocracy you
(21:45):
have to practice. Trump intuited, I think probably just because
he liked it. Long before I ran for president, he
was totally immersed in sports. You know, we go to
boxing and Las Vegas. He at one point he owned
a football team. And I watched him, just before the
election go to the Ultimate Fighting Championship. I realized, suddenly
(22:05):
they're about four or five million young men who were
watching that fight, and they're watching Donald Trump enjoying what
they enjoyed, which is part of why I think he
did so remarkably well with younger people because they could
feel together well in a sense, it seems to me
that's the bud Light market. I mean, the bud Light
markt is the person who doesn't want to talk politics
(22:26):
and they don't want to be involved in fights in Washington.
They want to enjoy life, have their favorite team or
player or whatever, and relax. They go to sports to relax.
They don't go to sports to have a political fight.
Speaker 3 (22:40):
You know, Knude, if this doesn't work out for you,
maybe you should be the next VP of bud Light
because you get the customer more than others. You're right,
And that's what was really a head scratcher to me
because in twenty sixteen, that was when actually bud Light
dropped these partnership with the UFC that they had at
the time because again they had more of these Belgian
marketers European marketers coming in and they wanted to switch
the brand, and they switched the brand more towards getting
(23:03):
a little bit more politicized. This was silly to me,
but over in Europe and Belgium, techno festivals were big,
so techno music, so they canceled a lot of these
partnerships and events with country music festivals and country music artists.
Here in the US, people drink a ton of beer
country music festivals. That's the customer who doesn't drink a
lot of beer. As people who are going to techno festivals,
(23:24):
they're doing I don't know, molly and drugs and everything else,
and all of a sudden they were switching these It
just didn't make sense. To people like myself that were
from the US, from the Midwest, it made no sense.
And to your point, beer is kind of a young person,
especially males who drink it, very associated with sports, and
UFC was becoming one of the most popular sports. It
was very popular as well with Hispanics, and Hispanics are
(23:46):
a big population that drinks beer. And you see some
of the ascendancy of even Modello, which passed bud like
through the number one beer. Modella picked up that UFC
sponsorship when bud Light initially dropped it in twenty sixteen,
and then Modella went kind of through the roof at
that time, and that's when we start to see bud
Light especially start to wendle in its sales.
Speaker 1 (24:04):
Historically, things like Corona were big, and now all of
a sudden you have Modello, which just explodes. I think
it's probably larger in America than all the other Mexican
beers combined. It's remarkable.
Speaker 2 (24:16):
And Modello is now the largest beer brand in the
United States, which is interesting to think you actually have
a Mexican beer that is the largest beer brand. But
it goes back to your point again, who drinks a
lot of beer.
Speaker 3 (24:27):
It's especially a bunch of young males that like sports,
and there's a lot of Hispanics in this country. There
are young males and like sports, but there's even a
lot of Caucasian and African American, Asian and others. Those
are a lot of young males that like sports. And
Modello probably advertises more than bud Light does on NFL.
You see it on NFL, you see UFC.
Speaker 1 (24:45):
Do you think the Belgians in the back of their
mind sort of thought they could somehow evolve bud Light
so it was competing with Chablie and Chardona and the
upscale crowd because a lot of their advertising only made
sense if you were trying to actually compete with the
white wine market.
Speaker 3 (25:03):
You're right, and there's always this fallacy in the beer
market that says, Okay, you know, we serve a lot
of young men, but how do we get more I
don't know, young women, or how do we get other
people to drink more beer? And I think that's kind
of somewhat silly. You know, if you want to reach
more of that crowd, go acquire a wine company, or
go acquire a seltzer company, or do something different. But
you want to let bud Light be bud Light, and
(25:24):
you want to compete against Miller Lite and cores Light
and try and get more Miller Lite and cores Light
customers because that's still the largest segment of the beer market.
Is that core domestic beer. Bud Light, Miller Like cores
Light combine dwarf any other sort of three beers in
terms of market.
Speaker 2 (25:39):
Size and potential.
Speaker 3 (25:40):
And what's interesting about Miller Like cores Light bud Light
is that for most Americans they're indistinguishable. I mean, ninety
five percent of people can't tell the difference between a
bud Light and Miller Like cores Light. But what really
distinguishes is their brand.
Speaker 1 (25:51):
So you're saying, if you did atline taste test with
the three, it's very hard to figure out which one you're.
Speaker 2 (25:55):
Drinking, very hard.
Speaker 3 (25:57):
I mean for ninety five percent Americans, they can't tell
the difference. Now there's a grade five percent that have
the right palette and like it enough. But for ninety
five percent people to them a bud Light miller like
course Light, they're almost indistinguishable, and you're really going to
pick it based off the brand.
Speaker 1 (26:09):
I'm sure. So they're in that sort of a rut,
and Sunday they come up with Dylan Molvany. How far
out of touch with the American reality do you think
they had to be to think that would work.
Speaker 3 (26:22):
You're out of touch enough that you lost millions of consumers.
At this point forty percent of their sales. They're still
down forty percent versus where they were before this Dilan
move Any partnership. The stock that they's lost at least
two billion dollars worth of profits. Here in the US,
the stock price is off by forty percent since before
they did this Dilan move Any deal, and when the
(26:44):
broader stock markets are up almost forty percent.
Speaker 2 (26:46):
So it is to.
Speaker 3 (26:47):
Realize how out of touch not only they were to
do the Dilan mov Any partnership, but I even think
newt the response was just as bad as the partnership itself,
where the company was unable to clearly articulate what's the
mission of budlfe, who bud Light is going to serve,
what the brand stands for. They were almost caught between
this rock and a hard place, where on one side
(27:07):
they were trying to figure out how not to lose
any more of their core customers just wanted.
Speaker 2 (27:11):
Bud Light to stay out of politics.
Speaker 3 (27:13):
But there's been a ton of pressure over the last
four or five years from Biden administration, from big asset
managers like Blackrock, State Street, Vanguard that were pushing in
ESG and DEI agenda. There was, as I call it,
the ideological industrial complex, consultancies that were pushing companies to
become more about diversity, equity, and inclusion. A lot of organizations,
(27:35):
nonprofits and activists had popped up, like the Human Rights
Campaign that were pushing companies to get more involved in
doing transgender affirmation care as part of healthcare policies and
doing more specific advertisements to that community. And we're penalizing
companies if they weren't. So there was this whole complex
that was putting a lot of pressure on organizations, and
(27:56):
unfortunately a lot of companies were participus We sow Disney
got involved and pronal rights issues in Florida.
Speaker 2 (28:01):
You saw Target got involved in a bunch of issues.
Speaker 3 (28:04):
But Light was really uniquely susceptible because they were this,
i mean down hoe Midwestern brand, and its products were indistinguishable,
and that's how out of touch they were that it
was very easy for consumers to walk away from butt
Light because anywhere you have a six pack upud light,
you also have that Core's Light and Miller Lite, and
for consumers it's just as indistinguishable to pick one or
the other.
Speaker 1 (28:22):
What was the whole nature of the reaction of the
American people to the Mulvania.
Speaker 3 (28:29):
The reaction was immediate and swift, and as you recalled,
this added happened on April first, so April Fool's Day,
and a lot of people thought that this literally might
be a joke because Phili Mulmani was a very controversial
political figure. Dylan had just documented this three hundred and
sixty five days of Girlhood where she transitioned from a
biological male to female, and over that time period had
(28:52):
gone to the Biden White House was advocating for gender
affirmation care for youth, with the Biden administration was advocating
for biological males compete against women in sports. And these
were all very controversial subjects, especially around this time. I
think there were twenty five bills that were in state
houses around the time that were trying to ban gender
affirmation care.
Speaker 2 (29:10):
There was also if you were called. A week leading
up to.
Speaker 3 (29:12):
This, there was a mass shooting at a Christian school
in Tennessee where there was a transgendered shooter that killed
a number of folks into school in Tennessee. So issues
surrounding sort of transgender rights, transgender legislation, it was very
very topical at the time. And so when bud Light
all of a sudden seemed to come out and support
this agenda and it was really never again a political brand,
(29:35):
a lot of its customers revolted, said Kid Rock, I
mean that would be a bud Light drinker all of
a sudden took out his AR fifteen and shot up
a bunch of cases. A bunch of country music stars
kicked bud Light off their tour buses. But then everyday
folks as well started posting videos about them not buying
bud Light, about them throwing out bud Light, about them
going to the store seeing that Core's Light and Miller
Lite were out of stock but bud Light.
Speaker 2 (29:56):
Was in store.
Speaker 3 (29:57):
And this is when the American population for the first
time actually organized a very successful boycott of a company.
And they did this because it was just as easy
to buy Miller lt.
Speaker 2 (30:06):
And Course Light.
Speaker 3 (30:07):
And then every week the sales data from Walmart and
Kroger and seven to eleven were beers sold. It gets
reported nationally and people could see that sales were down
a bud Light ten percent and twenty percent and thirty percent,
So they were having an incredible impact on the sales
of the brand, which kept the boycott going in a
big way. And then there was continued fuel on the
fire when the company, Anheuser Busch, could not have a
(30:30):
credible response to what was going on. They refused either
again apologize to their customer base, nor did they double
down and say, no, bud Light's going to be heading
in a direction like maybe Ben and Jerry's we're going
to be more socially progressive and we're going to be
leaning into these And because of that, they kind of
took this middle ground, and they ended up getting shot
at from both sides in this cultural war where they
lost their traditional more loyalist type of consumers wanted to
(30:53):
be a political Then they lost a lot more of
their progressive consumers as well that wanted them.
Speaker 2 (30:57):
To be more socially liberal with their advertising.
Speaker 1 (31:00):
You know, in the middle of this disaster, I mean,
you just something that's pretty courageous. You write a letter
to Brendan Whitworth asking that he stepped down as CEO.
I mean that takes a lot of guts.
Speaker 3 (31:13):
Interesting enough, I had left Annheuser Busch about a year
before this happened because I saw a lot of the
problems materializing at the company. The marketing had changed, their
DEI ESG policies had changed, they were struggling to find
their consumer base, and so I left to actually start
a company called Strive Asset Management with a buddy of
min from high school, Vivek Ramaswami. And this was before
he was running for president and doing Doze with Elon Musk.
(31:35):
But the idea behind Strive was to keep companies out
of politics and keep them folks on their mission and.
Speaker 2 (31:41):
Creating shareholder value.
Speaker 3 (31:42):
Then a year later, when bud Light did this partnership
with Dylan Mulvani on April Fool's Day, and again a
lot of people thought it was a joke and it wasn't.
And the CEO, Brendan Whitworth, had multiple opportunities to course
correct and to come out clearly talk about this campaign.
Speaker 2 (31:58):
Was it a mistake or not?
Speaker 3 (32:00):
Bud Light's direction going to be had multiple chances do it,
didn't do it, could never clear articulate.
Speaker 2 (32:04):
The stock price was down.
Speaker 3 (32:05):
I was still a big shareholder of the company, so
I wrote a letter and just saying that Brandon is
the CEO of the company, him being infiduciary, him trying
to act in the best interest to shareholders, he was
failing people, and therefore he needed to step down and
let somebody else come back and be able to course
correct and get the ship going back in the right direction.
Speaker 1 (32:21):
Did you get any reaction.
Speaker 3 (32:23):
I got a lot of reaction from the wholesaler partners
at Annehezer Busch. A lot of people reached out to
me and said, hey, keep it up, keep up what
you're doing. You're the only person that is publicly advocating
for policies that make a lot of sense because those
wholesalers that we spoke about, the Andy mccains in Arizona,
they have a strong percentage of their business I mean
eighty to ninety percent of their business in a lot
of cases, Anne Hazer Bush and when their largest brand,
(32:45):
bud Light, is down thirty and forty percent, all of
a sudden, these guys are losing millions of dollars.
Speaker 2 (32:50):
They had to lay off a lot of their employees.
Speaker 3 (32:52):
There were a lot of suppliers also that had to
shut down and close and as a Bush had to
fire a lot of people, it became the poster chot
of really what went wrong with this whole esg DEI
very politicized movement in corporate America where you just saw
that these policies not only did they not deliver any
real value to shareholders, nor did they help make society better.
Speaker 2 (33:14):
If anything, they made it worse. And there are a
lot of consequences.
Speaker 3 (33:17):
So a lot of those folks that got hurt were
the ones that reached out and said thank you for
speaking up and saying something.
Speaker 1 (33:38):
What do you think that future holds for bud Light
and Frandeuser bush Well?
Speaker 2 (33:42):
I still think that they have sort of choices to make.
Speaker 3 (33:45):
I'm a big advocate right now that I think the
business is better off being sold here in the United States. So,
as we mentioned InBev's this large corporation that it's the
largest beer company in the world. They sell one out
of four beers globally. They have big operations not only
here in the US where they own Anheuser Bush, but
they own a bunch of beer brands in South America.
(34:05):
Over in Europe they owned Stellar, Artwa and Hogarden. In
Africa they own Carling and others. And I actually think
right now the company is best served by actually selling
the US business, selling Anheuser Bush, whether it's selling it
back to the Bush family or selling it to somebody
like I don't know, Warren Buffett and Berkshire Hathaway and
getting it really back in US hands. And I think
they need to first off go on a big sort
(34:25):
of PR blitzing campaign about this. And I don't think
they're really going to get any of their customers back
until they do think about it. I mean, it's be
an amazing comeback story. It's owned by Warren Buffett or
somebody else, say, hey, back in American hands, back in
American values. This whole bud light thing was a mistake.
Now we're getting back to serving our core customers. Here's
how we're doing it. I think you could unlock an
amazing amount of value. There'd be a ton of people
(34:46):
that would come back to this company. But otherwise I
don't know how they recover because the other path that
they've taken is they still have a any mistake for
this bud light controversy. And really I always say the
path the redemption goes through forgiveness. But to be forgiven,
I have to admit that there was a mistake that
was made. Otherwise no one's going to forgive you. And
they refuse to admit there was a mistake. It's been
almost two years now, so with the people that are
(35:08):
currently there, I don't think they can authentically do it.
So they're going to either continue to kind of decline
and have more of kind of a slow death in
the US, or I think they sell the business and
they can get right back on track very very quickly.
Speaker 2 (35:18):
That's how I see this unfolding.
Speaker 1 (35:20):
You reminded me my younger daughter was an intern in
Coca Cola when they introduced new coke and the reaction
was so hostile that within a very few weeks, the
CEO had to go on television and give a speech
and say, we made a mistake, we misunderstood, we're bringing
back coke. We apologize. And she was there for all
(35:41):
of it. She was in charge of editing the daily news,
the volume they were getting headline stories. She would call
me in breaking up, laughing and say, these guys are
in such trouble, but they recognize it and they reverse course.
Speaker 2 (35:53):
The reverse course.
Speaker 3 (35:54):
They had a much better PR team and a crisis
team that kind of got them out of that situation
because they admitted there was a problem, there was a mistake.
Speaker 1 (36:01):
Well, but it goes to your point about New York
versus Saint Louis. Because they were in Atlanta. One of
the senior vice presidents said to me they couldn't go
to a cocktail party without people backing them into the
wall and yelling at them. And about three weeks of that,
they figured this is really not sustainable.
Speaker 3 (36:20):
And I think that's what's tough is then when the
company was based in now New York City and all
of the executives are in New York City, they can't
go to cocktail parties in New York City without saying, hey,
why aren't you guys standing by Dylan mulvany, or why
aren't you guys doing more advertising? And the problem is
that bud Light was never a brand that was supposed
to be like Ben and Jerry's. If you were Ben
and Jerry's, and Ben and Jerry says, hey, we're a
socially progressive brand. We use ice cream to advance I mean,
(36:42):
you name it, defund the police initiatives, overturning election integrity laws,
the LGBTQ plus agenda. Man, it's a free country. Like
Ben and Jerry's can do that. That's their brand, But
that's not the bud Light brand. And that was the
whole problem. And I even think it's interesting now because
I think this story is as relevant now as it
really ever was. I mean, you've seen Trump has rolled
back a lot of the DEI initiatives. Some companies already
(37:04):
were going that direction because they saw these polish were divisive.
Meta had rolled them back, Walmart had McDonald's been Other
companies are doubling down. Costco, which is based in Seattle's
doubling down on the whole DII Agenda, JP Morgan based
in New York Is. So I still think that you're
going to see a lot of controversy over the next
couple of years about what our businesses supposed to do.
Speaker 2 (37:24):
And again this book, I mean.
Speaker 3 (37:25):
Last Call for bud Light, it tells sort of what
do you do in these crises?
Speaker 2 (37:28):
What should companies do?
Speaker 3 (37:30):
What's going to be better for business and better for
I think everyday citizens as well.
Speaker 1 (37:33):
Moving forward, they have this tremendous drop which is really
stunning at the time. How much have they recovered since then?
Speaker 2 (37:41):
So they haven't recovered at all since then.
Speaker 3 (37:43):
So sales in the weeks afterwards were down approximately thirty percent.
That was in twenty twenty three. They were down almost
thirty percent. In twenty twenty four they were down another
I think ten percent on bud Light, and to start
this year they continue to be down again.
Speaker 1 (37:57):
Once your brand starts to sync, unless something dramatic happens,
it becomes cumulative and people say, well, that's not what
I drink anymore.
Speaker 3 (38:08):
That's it. It's not what I drink anymore. And then,
especially when the American population was really looking for their
CEO to come out and to make a strong statement
and talk about what bud light is. And he really
had three opportunities to do it. The first time, about
two weeks after the controversy, he released a statement where
he neither acknowledged the controversy, why they were in the controversy,
or how they were going to get out of the controversy.
Speaker 2 (38:30):
And they kind of had a patronizing ad.
Speaker 3 (38:31):
Of kind of a Budweiser running across the country and
it was panned across the country about saying, this is
not how you handle a crisis.
Speaker 2 (38:38):
So sales continued to fall.
Speaker 3 (38:39):
A month later, there was another statement that it was
also a nothing burger where it didn't admit mistake. And
then there was a third opportunity where the CEO, Brendan Witworth,
had an opportunity to go on CBS, and he was
on CBS going to July fourth weekend, which is the
biggest beer selling holiday of the year, and he tried
to write the ship but he was very much coached
(39:00):
going into this to not again address the controversy, and
the CBS host asked the first question was essentially, hey,
knowing what you know now, would you do this.
Speaker 2 (39:09):
Campaign again or was it a mistake?
Speaker 3 (39:11):
And he gave a very wishy washy, evasive answer, and
the host came back and said, to be clear, you
are in the problem, in the situation you're in because
of the answer you just gave, or you didn't answer
the question, So let me ask it again because the
American population wants to know was this mistake?
Speaker 2 (39:25):
Would you do it again?
Speaker 3 (39:26):
And again gave an evasive, wishy washing answer, and ever
since then, I mean, sales continue to decline to suffer.
That's when I wrote my op ed saying this is
why you need to step down. This is not how
you do crisis management. This brand's not going to come back.
People are now moving on, and then you have a
compounding issue where once the sales are down that much, Walmart,
Kroger seven to eleven start taking your shelf space away,
(39:49):
and then when they take your shelf space away, then
it's very very hard to get your sales back because
you're out of stock.
Speaker 1 (39:53):
Well, Angel, I want to thank you for joining me.
Your new book and I love the title, Last Call
for bud Light, The Fall and Future of America's Favorite Beer,
is available now in Amazon and in bookstores everywhere. It's
a fascinating read. We're going to feature a link to
buy it on our show page. I'd really thank you
for this extraordinarily interesting conversation.
Speaker 2 (40:14):
Thank you so much for having dude. I really appreciate it.
Speaker 1 (40:19):
Thank you to my guests Dance on Prericks. You can
get a link to buy his new book, Last Call
for bud Light, The Fall and Future of America's Favorite
Beer on our show page at newtsworld dot com. New
World is produced by Gingwish three sixty and iHeartMedia. Our
executive producer is Guernsey Sloan. Our researcher is Rachel Peterson.
The artwork for the show was created by Steve Penley.
(40:41):
Special thanks to the team at Gingwish three sixty. If
you've been enjoying Newtsworld, I hope you'll go to Apple
Podcasts and both rate us with five stars and give
us a review so others can learn what it's all about.
Right now, listeners of Newtsworld can sign up for my
three free weekly columns at gingrishtree sixty dot com slash
new sletter. I'm nude Gingrich. This is newts Work.
On this episode of news World, Dylan Movany, a transgender influencer,
partnered with bud Light in a sponsored Instagram video on
April first, twenty twenty three. The video promoted a fifteen
thousand dollars giveaway during March Madness. The partnership sparked a
huge backlash and a boycott of bud Light. Just days later,
(00:26):
singer Kid Rock used several cases of bud Light for
target practice, opening fire in them with a gun in
response to the news that anheuser Busch made a transgender
woman a bud Light spokesperson. The fallout was a drop
in bud Light sales and a shakeup of the US
based marketing team and other executives. I'm really pleased to
(00:47):
welcome my guest. Anson frieris former president of Anheuser Busch
Sales and Distribution. His new book is Last Call for
bud Light, The Fall and Future of America's Favorite Beer,
and I have to say it is a great answering.
(01:12):
Welcome and thank you for joining me on nuts World.
Speaker 2 (01:14):
Oh, thanks for having me. Really excited to be here.
Speaker 1 (01:17):
You've mentioned that your earliest memory of Anheuser Busch was
watching their Super Bowl commercial in nineteen eighty nine when
you were five years old. What made that moment so
impactful for you and was there something about the brand
or the commercial that left a lasting impression on you
at such a young age.
Speaker 2 (01:35):
Well, I think there were two things that left the
lasting impression.
Speaker 3 (01:38):
First off, from Cincinnati, Ohio, So I'm a Cincinnati Bengals fan,
and that was the year you had the Cincinnati Bengals
Boomer Sison playing Joe Montana in the Super Bowl. So
my parents had a big party that year. And then
the other thing that made it more memorable is that
was the first year that you had the Bud Bowl.
And if you remember this is when you had Budweiser
versus bud Light.
Speaker 2 (01:56):
They had cans of beer. They were competing against each other.
Speaker 4 (02:00):
Football fans get ready for the Battle of the Century.
Speaker 2 (02:06):
It's unbeaten Budwiser.
Speaker 4 (02:07):
It takes on need defeated bud Light in b versus
bud Light in bud Bull One budd Bull Woe.
Speaker 2 (02:16):
This time it's for reu.
Speaker 3 (02:18):
It was the first time ever that actually a company
had run a Super Bowl ad specifically about the Super Bowl,
just for the Super Bowl as well, and it was
a big deal where consumers they could predict the score
of the bud Bowl and they could win free beer
in money afterwards. So it was a huge success for
the company and really is what ignited bud Light sales
become the largest beer brand in the country was that
commercial campaign.
Speaker 1 (02:38):
It was amazing how bud Light really became an extraordinarily
successful brand.
Speaker 2 (02:45):
Amazing successful brand if you think about it.
Speaker 3 (02:47):
Almost the height of beer and beer marketing was the
decade that followed.
Speaker 2 (02:51):
It was the nineties. It was the early two thousands.
Speaker 3 (02:53):
You probably remember there was the Budweiser Frogs commercial.
Speaker 2 (02:56):
Bood Wines, Why why, why there was a bud Light
real manut of genius commercials.
Speaker 4 (03:09):
Real men of genius, real man of genius. Today we
salute you, mister footlong hot dog inventor.
Speaker 2 (03:19):
Mister foodlong hotdog.
Speaker 4 (03:21):
Invent When conventional wisdom said no one could make a
hot dog longer than six inches, you dared to dream,
to dream. You knew the limitations of a regular size
hot dog bun, and you ignored them. Happen you made
a ten inch wiener and people cheer, but you weren't satisfied.
(03:42):
You said, wait, I think I can still give you.
Speaker 2 (03:46):
Two more inches go.
Speaker 4 (03:49):
So this Bud's for you, mister hot dog hero, because
you gave every single one of us our fondest wish
a bigger wiener.
Speaker 3 (04:01):
Thank you.
Speaker 2 (04:05):
There was the was up guys from Budweiser, and that
was really the pinnacle.
Speaker 1 (04:14):
Yo, the pick of the phone. Hello.
Speaker 2 (04:18):
Was that.
Speaker 3 (04:22):
Beer sales peaked in the US and the early two thousands,
I think partly because of the genius of some of
these marketing campaigns that just made kind of beer part
of American life. It was part of sports, that was
part of music.
Speaker 1 (04:33):
So after your five year old experience, as you were
growing up, what did Buzzweiser represent to you?
Speaker 2 (04:40):
I don't know.
Speaker 3 (04:41):
To me, it was always like Budweiser was America in
a bottle. I mean, it was Clydesdale's, it was sports,
it was backyard barbecues. It brought people together, and that
beer was always something that was never really partisan. People
were Democrats, Republicans, you know, black, white, I mean, everybody's
drinking beer. It was usually people were having a good
time and people were having fun.
Speaker 2 (04:59):
So that's kind of what the brand represented.
Speaker 1 (05:02):
Now as I understand it, you were collecting as a kid.
Now before you can even drink. You're collecting memorability like
Neon signs, steins, vintage cans. I mean, I had this
image of your bedroom as sort of a shrine Dan
Heiser Bush.
Speaker 2 (05:17):
That's kind of what it was. I mean, God, bless
my mom.
Speaker 3 (05:19):
I think she thought that was better than me drinking
the product when I was at that age. So she said, okay,
i'll have you had the Neon signs and the blow ups.
Speaker 2 (05:26):
And the kind of pintackers on the wall. My child
did better. I mean it really looked like a sports bar.
I thought that was fun. That was cool.
Speaker 3 (05:32):
They did great marketing, and I think at the lunch table,
I don't know, in junior high in high school, if
you knew the latest bud light catchphrases of you know
what's up? Or romanto genius, I don't know, batching some
social currency.
Speaker 2 (05:42):
So I thought it was kind of cool.
Speaker 1 (05:44):
See I had this image of you sort of walking
an Heiser Bush fan. How did your friends react to that?
Speaker 2 (05:51):
Yeah, I don't know.
Speaker 3 (05:52):
There was this big study that was done, and I
remember it. I showed that I graduated from high school
in two thousand and two, and enough apparently that was
the year that underage drinking peaked in the United States,
And I don't know that I had to do with
the success of the marketing of the brand that wasn't
really who they were supposed to target in the nineties
and early two thousands. But I just think that at
(06:13):
that time Beer was cool, Budweiser was cool, bud Light
was cool. They kept winning all these Super Bowl ad
Meter Awards, super Bowls coming up this week, and the
biggest honor of a marketer or a brander is this
USA today where they take the pulse to the entire
country and entire country ranks, what are their favorite Super Bowls?
I mean, Annhezard, Bush, Bud and bud Light were winning
them almost every single year at this time, so they
(06:33):
just really understood sort of the customer, the culture where
the country was. And I think I was probably just
similar to a lot of guys growing up that I
don't know, when you got to a certain age, you thought, hey,
I'll be able to drink some Buds and bud Lights
and hang out with my buddies and have some fun
and good times.
Speaker 2 (06:47):
So I don't know that was what the culture I
grew up in.
Speaker 1 (06:50):
I have to ask, do you still have your Budweiser
frog fingerings.
Speaker 3 (06:53):
Oh, I got him somewhere down my parents' basement. I
think my mom saved all this memorability and all the
stuff that I had for my childhood bedroom. So it's
all down in the basement somewhere. I'm still trying to
convince my wife to let me figure out a room
in my house to put all that stuff up, but
I haven't convinced it yet.
Speaker 1 (07:07):
You could someday open up a bud Light museum.
Speaker 3 (07:09):
I probably could at some point. Yeah, with all the
stuff that I have. That's the dream. At some point,
if the book does well enough, maybe we'll do that.
Speaker 1 (07:16):
As a kid, you really were fascinated with bud Light,
and then you make the transition and you actually go
to work for them, And what was that transition like?
Speaker 2 (07:24):
Yeah, it was interesting.
Speaker 3 (07:25):
Even though I grew up liking bud Light, liking the company,
liking the commercials, I never thought I would end up
working there. After undergrad I went and I worked at
a private equity firm out of Boston, and I went
back to business school and I was in business school
working at a hedge fund in New York City when
I ran into some folks at Anhuser Busch in BEV
and they had moved their global headquarters to New York
(07:46):
really after buying Anheuser Busch in the US, and it
was a couple of folks from three G Capital. They
were really the owners of the Annehuser Busch in Bev
now in New York. And after running into them at
a bar in New York, they convinced me to come
work for what they said was kind of the world's
largest private equity firm that happened to sell beer. And
so given my kind of background in finance, but given
(08:07):
my sort of enjoyment of the products.
Speaker 2 (08:09):
I thought it could be kind of a pdentially match
made in heaven.
Speaker 3 (08:11):
They told me that this company was a meritocracy, that
you could grow quickly in the organization, that the company
had future plans to grow. They were going to go
buy brands group of Medelo in Mexico and sab Miller,
who knows, maybe by other big companies Pepsi down the line.
Speaker 2 (08:24):
So that was exciting, and.
Speaker 3 (08:25):
So they convinced me to join them, and the year
twenty eleven is when I joined the company. Actually originally
joined them in Belgium in a finance job, and then
moved to Saint Louis and New York and Denver and Atlanta,
So moved a bunch of times over my eleven year
career with them.
Speaker 1 (08:41):
In two thousand and eight, Anheuser Busch, which had been
a classic American company and I'd spent time over the
years with Algie Bush, it was acquired in a hostel
takeover by InBev, which was a smaller but very aggressive
Belgian based company. Can you sort of walk us through
that kind of experiencement, What was it like seeing your
company go through such a dramatic transition.
Speaker 2 (09:03):
I joined just a couple of years afterwards.
Speaker 3 (09:04):
So a lot of the people that were around from
call at the Augie Bush and the Bush family days
and who had really built Anheuser Bush into what had
become had become the largest kind of beer company.
Speaker 2 (09:13):
In the world, behind the success of Bud and Bud Light.
Speaker 3 (09:16):
And they did it by great marketing, branding that was
their specialty. But then a company called InBev, which was
Belgian based, kind of run by a group of Belgian
and then Brazilian families. They had a different philosophy than
Annezer Bush did, and their philosophy was really they were
more cost cutting. They employed a philosophy called zero based budgeting,
which was kind of the antithesis of what Anne Haser
Busch was and how annezer Busch built the business off
(09:38):
great branding. InBev, they would come in to cut the
cost and candidly in the early in mid two thousands,
there were a lot of cost to cut at Annheser Busch.
I think the company owned eight helicopters at the time.
They owned I don't know, a fleet of jets, They
owned SeaWorld, they Busch gardens, there were a lot of
just kind of non core beer assets they'd picked up
over time. So unfortunately the company got a little bit
bloated and they became susceptible to a take over as
(10:00):
the Bush family did not have a lot of stock and.
Speaker 2 (10:03):
The stock price hadn't moved in the number of years.
Speaker 3 (10:04):
So they were taken over by a competitor InBev in
two thousand and eight and two thousand and nine.
Speaker 1 (10:09):
How did that change the company's culture?
Speaker 2 (10:12):
Yeah, I mean it changed the company's culture dramatically.
Speaker 3 (10:14):
I think that the InBev organization when they came in,
of course immediately did away with sort of the private jets,
did away with the helicopters, did away with thousand dollars
expense theres and there was a lot of excess that
went away. So some that was good because if you're
a business and you just get bloated and you are
wasting money and you're not necessarily investing in the right.
Speaker 2 (10:31):
Way, some of that's positive. I would say.
Speaker 3 (10:33):
The negative things that changed about the organization was really
sort of the hiring I think specifically Americans and Americans
that were really from the geographical center of the country
that really understood their customer.
Speaker 2 (10:45):
That was one of the biggest shifts.
Speaker 3 (10:46):
That happened InBev brought in a lot of their marketers
that were from Belgium, or that were from China, or
that were from sort of overseas that didn't really understand
the US customer. And they also didn't invest as much
into marketing and building brands as Anheuser Bush did.
Speaker 2 (11:00):
They thought that these kind of.
Speaker 3 (11:01):
Brands could just last forever and that people would continue
to buy them.
Speaker 2 (11:04):
But as we know, you have to continue to invest.
Speaker 3 (11:07):
Into brands, you have to continue of the pulse the country,
and I think that was probably the biggest disconnect is
it went from a marketing organization to a financial organization,
and that can only produce value for so long.
Speaker 1 (11:17):
Historically, weren't brands like this that were national brands. Weren't
they basically represented locally by locally owned companies that were
doing the marketing and had the network of personal relationships.
And if I remember correctly, Sidney McCain's father was a
big Budweiser distributor in Arizona. Did NBAV change that kind
(11:37):
of locally controlled distribution system or did they just use
it as it existed.
Speaker 3 (11:43):
They used it as it existed where they legally had to.
But in terms of how the alcohol system works, it's
actually pretty interesting. Nose a three tier system where legally
you have manufacturers of alcohol like Anhezard Bush, they have
to sell to independent third party wholesalers that are family
owned in every county across the US, and then those
wholesalers have to sell to independent bars and restaurants and
(12:06):
liquor stores and others. And unfortunate, when NBEV came in,
they kind of turned this system upside down. Historically, the
old Anheuser Busch and the Bush family had worked with
these wholesalers, these distributors, they were great partners, equal partners.
But then when NBEV came in, they tried to start
buying up all of these family owned businesses across the US,
and they thought that there was a problem with these
(12:26):
independent family owned businesses. They weren't running their business as well,
they didn't understand how to market. And I think that
was a completely misnomer. And has a Bush tried to
more steer from the center. I mean they almost had,
I don't know, it was almost like a Communist party
way of controlling the system, where they tried to steer
from what they called steer from the center, dictate all
marketing from one location, as opposed to letting their independent
(12:47):
wholesales across the country to be able to market to
what people wanted to see in Phoenix versus New York
versus Boston. So you mentioned, I mean great wholesaler family,
the McCain family, They owned the wholesale ship in Arizona.
Annie McCain, I mean, great person, a great historic partner.
But then when you have this other organization trying to
come in buy your business or tell you what to do, there's.
Speaker 2 (13:06):
Obviously a reaction to that.
Speaker 3 (13:08):
It was a tough relationship early on between InBev and
their local wholesalers.
Speaker 1 (13:12):
Now, you also mentioned that the decay of bud light
really occurred over about a fifteen year period with lots
of relatively small decisions. Would they accumulate? What did you
mean by that?
Speaker 2 (13:26):
The one thing we just spoke about, I mean, fraying
those distributor relationships was a big part of this. Where
historically there was trust between Annehser Bush and their wholesalers.
They worked together, it was a great symbiotic relationship, but
they started fraying that partnership.
Speaker 3 (13:39):
Another thing that really made the distributors lose trust and
anne Haser Busch was Anne Haserbush moved the sales and
marketing headquarters of the company, which had always been based
in Saint Louis, Missouri, I mean kind of the geographical
center of the country, very close to Peoria, Illinois. There's
a great saying in marketing that if it plays in Peoria,
it generally plays across the country. So in Saint Louis
there was just a way to within a fifty mile
(14:01):
radius of Saint Louis, you have urban areas, you have
rural areas, you have suburbs, you have farms. It was
a great way to kind of understand your brands and
who buys them. It's a very high share market as well.
But in the twenty fifteen twenty sixteen time period, the
company they moved they're marketing headquarters from Saint Louis to
New York City. When they did that, they hire different
agencies that were more in New York. They hired different
(14:21):
people that had only lived in New York City their
entire lives, and those people they're seeing. Even how you
sell beer in New York City, it's very different than
you do in the rest of the country. In New
York City, you don't have any walmarts, you don't have
really any big kind of convenience store chains. You don't
have any chili's or bars and restaurants chains like that.
It's just very different. And then so a lot of
these changes really added up. Where you had frame relationships
(14:43):
with wholesalers, you change the geographic place where your sales
and marketing team was, you're hiring different individuals, and then
you've sort of adopted different philosophies as well. One really
around these policies of ESG and Dei, which the company
had really never subscribed to historically, but because they were
owned by Europeans, and this is more of a European
philosophy of how businesses should act, there were a lot
(15:05):
of kind of small changes that added up and ended
up culminating in this partnership at Dilan Molvania.
Speaker 1 (15:11):
If I remember correctly, many of the great national beer
brands came out of the Midwest.
Speaker 3 (15:16):
You're right thinking about Miller was out of Milwaukee. Perhaps
is out of Milwaukee.
Speaker 1 (15:20):
I guess you could argue Youngling in Pennsylvania, but it's
in western Pennsylvania. It's not in Philadelphia. But there was
a sense that, of course beer had been to a
great degree a German product, then the Germans had migrated
into that whole region. But I can tell you being
married to somebody from Wisconsin, there is a Midwestern style
and rhythm that has no relation to New York City.
Speaker 2 (15:42):
You're exactly right.
Speaker 3 (15:43):
This is a different way of life, there's different philosophies,
and I don't know, I think beer more plays towards
that laid back sitting around in a call to sack.
You know, you know your lawn and you want to
have a beer afterwards. That doesn't really play well in
New York. New York is more of a fast paced
and cocktail bars high end. It's a different philosophy, at
different mentality, a different vibe, different lifestyle, and frankly, a
(16:05):
different customer in a lot of cases.
Speaker 1 (16:08):
I talked to her one time with the Guinness people,
and they said they had realized that Guinness essentially is
bought to sit and talk to people, and so they
were opening up all these Irish bars because people would
not buy Guinness to go home and drink alone, but
they'd go to the bar. Totally different culture. And of
(16:29):
course you're producing a beer that is perfect for watching
baseball or football or basketball. I mean it's sort of
a sports beer, if you will.
Speaker 3 (16:36):
That's it lagger beer specifically, they're supposed to be sessionable
with laggers.
Speaker 2 (16:40):
That's the beer that you drink.
Speaker 3 (16:41):
A couple of them hanging out with friends over the
course of the game, which is different than an ipa
or kind of like a different beer. You might only
have one or two of them, but like it became
one of the largest beers because it was sessionable and
because of a sociable and because it brought folks together.
Speaker 1 (17:10):
They make a decision which I had never seen, putting
context into your book. But in twenty sixteen, they create
the bud Light Party, thinking it's going to bring people
together and then run ads guaranteed to drive people apart.
It's a perfect example of elitist thinking with no understanding
of the country they're talking to.
Speaker 3 (17:29):
One hundred percent. And this was part of the problem.
This was the same time when the company they moved
their headquarters from Saint Louis to New York City. At
the time, they had a Belgian who was running marketing
for the company for the entire US, and then they
had another Belgian person who was running marketing for bud Light.
And this is when you just have people that aren't
from the US, don't culturally get the US, and they're
(17:50):
trying to bring different values in. So they came up
with this campaign called the bud Light Party. And this
was during the election of twenty sixteen where Trump and
Hillary are running, and they tried to make a little
bit of a parody out of the campaign by saying,
you know, essentially vote for bud Light. But even that campaign,
a lot of these wholesalers, these independent wholesaleres we were
talking about. They were very much against this campaign. They
(18:13):
didn't want bud Light to get anywhere close to politics.
And even who bud Light hired to run that campaign,
which was Seth Rogan and Amy Schumer, tend to be
very progressive and they tend to be much more leftist,
and the campaign itself, it was not a success at all.
They started running even ads talking about how bud Light
they tried to make fun of it, about gender equality
and about LGBTQ rights and others, but it just didn't
(18:36):
work because it was always seen that bud Life's has
been funny in humorous, stayed us far away from politics.
Speaker 2 (18:40):
So they actually after about five or.
Speaker 3 (18:42):
Six months, they canceled the campaign because it was performing
so poorly and so badly. The person who was running
bud Light at the time was a Belgian guy. He
ended up essentially getting fired from that job. But the
company of course didn't learn its lesson, as seven or
eight years later they had an even worse campaign with
the dylanmov APCE.
Speaker 2 (18:58):
But they should have taken their lessons that time.
Speaker 1 (19:00):
But I was surprised to read that when they ran
the bud Light Party sales fell like five percent in
the first half of the year. I mean, people were
just rejecting it.
Speaker 2 (19:09):
They were exactly.
Speaker 1 (19:11):
Why didn't that feedback suggest to leadership that maybe they
were doing something wrong.
Speaker 3 (19:18):
I think part of it is that in large organizations,
especially with the move to New York City, you lost
a lot of the loyalty to the company, and there
was a lot of employee turnover. When the company was
based in Saint Louis, people were there, they were lifers
for Saint Louis, and you had a lot of longevity,
Whereas when the company moved to New York City, you
have people that can go and they can go work
at anhazard Bush one week, and then they jumped to
(19:39):
Facebook the next week, and then Google the next week,
and then Banks and McKenzie. So turnover was incredibly high
at this time, and so I almost think the company
had really lost even sort of that muscle memory from
even seven years ago about what happened with the blud
Light Party campaign. And then really a lot of things
had changed as well over the seven year time period
between twenty sixteen and twenty three, specifically in terms of
(20:02):
more philosophically knew about what is.
Speaker 2 (20:05):
The purpose of a business and the purpose of a corporation.
Speaker 3 (20:08):
And historically in the United States, everyone had kind of
abided by the Milton Friedman in view of the world
that the purpose of a corporation is the service shareholders.
Speaker 2 (20:16):
How do you do that? You make great products and services.
Speaker 3 (20:19):
But especially after Trump was elected in twenty sixteen and
pulled out of organizations like the Paris Climate Accords, the
World Health Organization, there was this real allergic reaction, especially
from West coast states that control a lot of money
and pension funds, state of California, state of New York,
a lot of European sovereign wealth funds, and they started
putting a lot of pressure on business because they owned
(20:41):
shares on a lot of businesses to evolve and to
adopt a broader view of capitalism and a stakeholder capitalism.
And they essentially said, well, if Donald Trump and government's
not going to fix existential crises of you name it,
climate change and systemic racism and all these other issues,
that now business needed to solve these issues. And so
there became a lot of pressure on businesses over the
(21:02):
kind of that seven year time period to get more
involved in issues and you saw sort of an uptick
in companies getting involved in a lot of social and
political issues. And I think that Anheuser Bush was uniquely
susceptible to a lot of these pressures, being a European
based company and abiding by this more European stakeholder capitalism
model of business pushed by Klaus Schwab.
Speaker 2 (21:21):
World economic for him and kind of the Davos crowd.
Speaker 1 (21:24):
There's a very large block of Americans who love sports,
and they love almost any kind of sports. Whether you're
talking about Ultimate fighting or you're talking about baseball, soccer, hockey,
that doesn't matter. This like sports, sports are inherently conservative
because you get winners and losers. There's a meritocracy you
(21:45):
have to practice. Trump intuited, I think probably just because
he liked it. Long before I ran for president, he
was totally immersed in sports. You know, we go to
boxing and Las Vegas. He at one point he owned
a football team. And I watched him, just before the
election go to the Ultimate Fighting Championship. I realized, suddenly
(22:05):
they're about four or five million young men who were
watching that fight, and they're watching Donald Trump enjoying what
they enjoyed, which is part of why I think he
did so remarkably well with younger people because they could
feel together well in a sense, it seems to me
that's the bud Light market. I mean, the bud Light
markt is the person who doesn't want to talk politics
(22:26):
and they don't want to be involved in fights in Washington.
They want to enjoy life, have their favorite team or
player or whatever, and relax. They go to sports to relax.
They don't go to sports to have a political fight.
Speaker 3 (22:40):
You know, Knude, if this doesn't work out for you,
maybe you should be the next VP of bud Light
because you get the customer more than others. You're right,
And that's what was really a head scratcher to me
because in twenty sixteen, that was when actually bud Light
dropped these partnership with the UFC that they had at
the time because again they had more of these Belgian
marketers European marketers coming in and they wanted to switch
the brand, and they switched the brand more towards getting
(23:03):
a little bit more politicized. This was silly to me,
but over in Europe and Belgium, techno festivals were big,
so techno music, so they canceled a lot of these
partnerships and events with country music festivals and country music artists.
Here in the US, people drink a ton of beer
country music festivals. That's the customer who doesn't drink a
lot of beer. As people who are going to techno festivals,
(23:24):
they're doing I don't know, molly and drugs and everything else,
and all of a sudden they were switching these It
just didn't make sense. To people like myself that were
from the US, from the Midwest, it made no sense.
And to your point, beer is kind of a young person,
especially males who drink it, very associated with sports, and
UFC was becoming one of the most popular sports. It
was very popular as well with Hispanics, and Hispanics are
(23:46):
a big population that drinks beer. And you see some
of the ascendancy of even Modello, which passed bud like
through the number one beer. Modella picked up that UFC
sponsorship when bud Light initially dropped it in twenty sixteen,
and then Modella went kind of through the roof at
that time, and that's when we start to see bud
Light especially start to wendle in its sales.
Speaker 1 (24:04):
Historically, things like Corona were big, and now all of
a sudden you have Modello, which just explodes. I think
it's probably larger in America than all the other Mexican
beers combined. It's remarkable.
Speaker 2 (24:16):
And Modello is now the largest beer brand in the
United States, which is interesting to think you actually have
a Mexican beer that is the largest beer brand. But
it goes back to your point again, who drinks a
lot of beer.
Speaker 3 (24:27):
It's especially a bunch of young males that like sports,
and there's a lot of Hispanics in this country. There
are young males and like sports, but there's even a
lot of Caucasian and African American, Asian and others. Those
are a lot of young males that like sports. And
Modello probably advertises more than bud Light does on NFL.
You see it on NFL, you see UFC.
Speaker 1 (24:45):
Do you think the Belgians in the back of their
mind sort of thought they could somehow evolve bud Light
so it was competing with Chablie and Chardona and the
upscale crowd because a lot of their advertising only made
sense if you were trying to actually compete with the
white wine market.
Speaker 3 (25:03):
You're right, and there's always this fallacy in the beer
market that says, Okay, you know, we serve a lot
of young men, but how do we get more I
don't know, young women, or how do we get other
people to drink more beer? And I think that's kind
of somewhat silly. You know, if you want to reach
more of that crowd, go acquire a wine company, or
go acquire a seltzer company, or do something different. But
you want to let bud Light be bud Light, and
(25:24):
you want to compete against Miller Lite and cores Light
and try and get more Miller Lite and cores Light
customers because that's still the largest segment of the beer market.
Is that core domestic beer. Bud Light, Miller Like cores
Light combine dwarf any other sort of three beers in
terms of market.
Speaker 2 (25:39):
Size and potential.
Speaker 3 (25:40):
And what's interesting about Miller Like cores Light bud Light
is that for most Americans they're indistinguishable. I mean, ninety
five percent of people can't tell the difference between a
bud Light and Miller Like cores Light. But what really
distinguishes is their brand.
Speaker 1 (25:51):
So you're saying, if you did atline taste test with
the three, it's very hard to figure out which one you're.
Speaker 2 (25:55):
Drinking, very hard.
Speaker 3 (25:57):
I mean for ninety five percent Americans, they can't tell
the difference. Now there's a grade five percent that have
the right palette and like it enough. But for ninety
five percent people to them a bud Light miller like
course Light, they're almost indistinguishable, and you're really going to
pick it based off the brand.
Speaker 1 (26:09):
I'm sure. So they're in that sort of a rut,
and Sunday they come up with Dylan Molvany. How far
out of touch with the American reality do you think
they had to be to think that would work.
Speaker 3 (26:22):
You're out of touch enough that you lost millions of consumers.
At this point forty percent of their sales. They're still
down forty percent versus where they were before this Dilan
move Any partnership. The stock that they's lost at least
two billion dollars worth of profits. Here in the US,
the stock price is off by forty percent since before
they did this Dilan move Any deal, and when the
(26:44):
broader stock markets are up almost forty percent.
Speaker 2 (26:46):
So it is to.
Speaker 3 (26:47):
Realize how out of touch not only they were to
do the Dilan mov Any partnership, but I even think
newt the response was just as bad as the partnership itself,
where the company was unable to clearly articulate what's the
mission of budlfe, who bud Light is going to serve,
what the brand stands for. They were almost caught between
this rock and a hard place, where on one side
(27:07):
they were trying to figure out how not to lose
any more of their core customers just wanted.
Speaker 2 (27:11):
Bud Light to stay out of politics.
Speaker 3 (27:13):
But there's been a ton of pressure over the last
four or five years from Biden administration, from big asset
managers like Blackrock, State Street, Vanguard that were pushing in
ESG and DEI agenda. There was, as I call it,
the ideological industrial complex, consultancies that were pushing companies to
become more about diversity, equity, and inclusion. A lot of organizations,
(27:35):
nonprofits and activists had popped up, like the Human Rights
Campaign that were pushing companies to get more involved in
doing transgender affirmation care as part of healthcare policies and
doing more specific advertisements to that community. And we're penalizing
companies if they weren't. So there was this whole complex
that was putting a lot of pressure on organizations, and
(27:56):
unfortunately a lot of companies were participus We sow Disney
got involved and pronal rights issues in Florida.
Speaker 2 (28:01):
You saw Target got involved in a bunch of issues.
Speaker 3 (28:04):
But Light was really uniquely susceptible because they were this,
i mean down hoe Midwestern brand, and its products were indistinguishable,
and that's how out of touch they were that it
was very easy for consumers to walk away from butt
Light because anywhere you have a six pack upud light,
you also have that Core's Light and Miller Lite, and
for consumers it's just as indistinguishable to pick one or
the other.
Speaker 1 (28:22):
What was the whole nature of the reaction of the
American people to the Mulvania.
Speaker 3 (28:29):
The reaction was immediate and swift, and as you recalled,
this added happened on April first, so April Fool's Day,
and a lot of people thought that this literally might
be a joke because Phili Mulmani was a very controversial
political figure. Dylan had just documented this three hundred and
sixty five days of Girlhood where she transitioned from a
biological male to female, and over that time period had
(28:52):
gone to the Biden White House was advocating for gender
affirmation care for youth, with the Biden administration was advocating
for biological males compete against women in sports. And these
were all very controversial subjects, especially around this time. I
think there were twenty five bills that were in state
houses around the time that were trying to ban gender
affirmation care.
Speaker 2 (29:10):
There was also if you were called. A week leading
up to.
Speaker 3 (29:12):
This, there was a mass shooting at a Christian school
in Tennessee where there was a transgendered shooter that killed
a number of folks into school in Tennessee. So issues
surrounding sort of transgender rights, transgender legislation, it was very
very topical at the time. And so when bud Light
all of a sudden seemed to come out and support
this agenda and it was really never again a political brand,
(29:35):
a lot of its customers revolted, said Kid Rock, I
mean that would be a bud Light drinker all of
a sudden took out his AR fifteen and shot up
a bunch of cases. A bunch of country music stars
kicked bud Light off their tour buses. But then everyday
folks as well started posting videos about them not buying
bud Light, about them throwing out bud Light, about them
going to the store seeing that Core's Light and Miller
Lite were out of stock but bud Light.
Speaker 2 (29:56):
Was in store.
Speaker 3 (29:57):
And this is when the American population for the first
time actually organized a very successful boycott of a company.
And they did this because it was just as easy
to buy Miller lt.
Speaker 2 (30:06):
And Course Light.
Speaker 3 (30:07):
And then every week the sales data from Walmart and
Kroger and seven to eleven were beers sold. It gets
reported nationally and people could see that sales were down
a bud Light ten percent and twenty percent and thirty percent,
So they were having an incredible impact on the sales
of the brand, which kept the boycott going in a
big way. And then there was continued fuel on the
fire when the company, Anheuser Busch, could not have a
(30:30):
credible response to what was going on. They refused either
again apologize to their customer base, nor did they double
down and say, no, bud Light's going to be heading
in a direction like maybe Ben and Jerry's we're going
to be more socially progressive and we're going to be
leaning into these And because of that, they kind of
took this middle ground, and they ended up getting shot
at from both sides in this cultural war where they
lost their traditional more loyalist type of consumers wanted to
(30:53):
be a political Then they lost a lot more of
their progressive consumers as well that wanted them.
Speaker 2 (30:57):
To be more socially liberal with their advertising.
Speaker 1 (31:00):
You know, in the middle of this disaster, I mean,
you just something that's pretty courageous. You write a letter
to Brendan Whitworth asking that he stepped down as CEO.
I mean that takes a lot of guts.
Speaker 3 (31:13):
Interesting enough, I had left Annheuser Busch about a year
before this happened because I saw a lot of the
problems materializing at the company. The marketing had changed, their
DEI ESG policies had changed, they were struggling to find
their consumer base, and so I left to actually start
a company called Strive Asset Management with a buddy of
min from high school, Vivek Ramaswami. And this was before
he was running for president and doing Doze with Elon Musk.
(31:35):
But the idea behind Strive was to keep companies out
of politics and keep them folks on their mission and.
Speaker 2 (31:41):
Creating shareholder value.
Speaker 3 (31:42):
Then a year later, when bud Light did this partnership
with Dylan Mulvani on April Fool's Day, and again a
lot of people thought it was a joke and it wasn't.
And the CEO, Brendan Whitworth, had multiple opportunities to course
correct and to come out clearly talk about this campaign.
Speaker 2 (31:58):
Was it a mistake or not?
Speaker 3 (32:00):
Bud Light's direction going to be had multiple chances do it,
didn't do it, could never clear articulate.
Speaker 2 (32:04):
The stock price was down.
Speaker 3 (32:05):
I was still a big shareholder of the company, so
I wrote a letter and just saying that Brandon is
the CEO of the company, him being infiduciary, him trying
to act in the best interest to shareholders, he was
failing people, and therefore he needed to step down and
let somebody else come back and be able to course
correct and get the ship going back in the right direction.
Speaker 1 (32:21):
Did you get any reaction.
Speaker 3 (32:23):
I got a lot of reaction from the wholesaler partners
at Annehezer Busch. A lot of people reached out to
me and said, hey, keep it up, keep up what
you're doing. You're the only person that is publicly advocating
for policies that make a lot of sense because those
wholesalers that we spoke about, the Andy mccains in Arizona,
they have a strong percentage of their business I mean
eighty to ninety percent of their business in a lot
of cases, Anne Hazer Bush and when their largest brand,
(32:45):
bud Light, is down thirty and forty percent, all of
a sudden, these guys are losing millions of dollars.
Speaker 2 (32:50):
They had to lay off a lot of their employees.
Speaker 3 (32:52):
There were a lot of suppliers also that had to
shut down and close and as a Bush had to
fire a lot of people, it became the poster chot
of really what went wrong with this whole esg DEI
very politicized movement in corporate America where you just saw
that these policies not only did they not deliver any
real value to shareholders, nor did they help make society better.
Speaker 2 (33:14):
If anything, they made it worse. And there are a
lot of consequences.
Speaker 3 (33:17):
So a lot of those folks that got hurt were
the ones that reached out and said thank you for
speaking up and saying something.
Speaker 1 (33:38):
What do you think that future holds for bud Light
and Frandeuser bush Well?
Speaker 2 (33:42):
I still think that they have sort of choices to make.
Speaker 3 (33:45):
I'm a big advocate right now that I think the
business is better off being sold here in the United States. So,
as we mentioned InBev's this large corporation that it's the
largest beer company in the world. They sell one out
of four beers globally. They have big operations not only
here in the US where they own Anheuser Bush, but
they own a bunch of beer brands in South America.
(34:05):
Over in Europe they owned Stellar, Artwa and Hogarden. In
Africa they own Carling and others. And I actually think
right now the company is best served by actually selling
the US business, selling Anheuser Bush, whether it's selling it
back to the Bush family or selling it to somebody
like I don't know, Warren Buffett and Berkshire Hathaway and
getting it really back in US hands. And I think
they need to first off go on a big sort
(34:25):
of PR blitzing campaign about this. And I don't think
they're really going to get any of their customers back
until they do think about it. I mean, it's be
an amazing comeback story. It's owned by Warren Buffett or
somebody else, say, hey, back in American hands, back in
American values. This whole bud light thing was a mistake.
Now we're getting back to serving our core customers. Here's
how we're doing it. I think you could unlock an
amazing amount of value. There'd be a ton of people
(34:46):
that would come back to this company. But otherwise I
don't know how they recover because the other path that
they've taken is they still have a any mistake for
this bud light controversy. And really I always say the
path the redemption goes through forgiveness. But to be forgiven,
I have to admit that there was a mistake that
was made. Otherwise no one's going to forgive you. And
they refuse to admit there was a mistake. It's been
almost two years now, so with the people that are
(35:08):
currently there, I don't think they can authentically do it.
So they're going to either continue to kind of decline
and have more of kind of a slow death in
the US, or I think they sell the business and
they can get right back on track very very quickly.
Speaker 2 (35:18):
That's how I see this unfolding.
Speaker 1 (35:20):
You reminded me my younger daughter was an intern in
Coca Cola when they introduced new coke and the reaction
was so hostile that within a very few weeks, the
CEO had to go on television and give a speech
and say, we made a mistake, we misunderstood, we're bringing
back coke. We apologize. And she was there for all
(35:41):
of it. She was in charge of editing the daily news,
the volume they were getting headline stories. She would call
me in breaking up, laughing and say, these guys are
in such trouble, but they recognize it and they reverse course.
Speaker 2 (35:53):
The reverse course.
Speaker 3 (35:54):
They had a much better PR team and a crisis
team that kind of got them out of that situation
because they admitted there was a problem, there was a mistake.
Speaker 1 (36:01):
Well, but it goes to your point about New York
versus Saint Louis. Because they were in Atlanta. One of
the senior vice presidents said to me they couldn't go
to a cocktail party without people backing them into the
wall and yelling at them. And about three weeks of that,
they figured this is really not sustainable.
Speaker 3 (36:20):
And I think that's what's tough is then when the
company was based in now New York City and all
of the executives are in New York City, they can't
go to cocktail parties in New York City without saying, hey,
why aren't you guys standing by Dylan mulvany, or why
aren't you guys doing more advertising? And the problem is
that bud Light was never a brand that was supposed
to be like Ben and Jerry's. If you were Ben
and Jerry's, and Ben and Jerry says, hey, we're a
socially progressive brand. We use ice cream to advance I mean,
(36:42):
you name it, defund the police initiatives, overturning election integrity laws,
the LGBTQ plus agenda. Man, it's a free country. Like
Ben and Jerry's can do that. That's their brand, But
that's not the bud Light brand. And that was the
whole problem. And I even think it's interesting now because
I think this story is as relevant now as it
really ever was. I mean, you've seen Trump has rolled
back a lot of the DEI initiatives. Some companies already
(37:04):
were going that direction because they saw these polish were divisive.
Meta had rolled them back, Walmart had McDonald's been Other
companies are doubling down. Costco, which is based in Seattle's
doubling down on the whole DII Agenda, JP Morgan based
in New York Is. So I still think that you're
going to see a lot of controversy over the next
couple of years about what our businesses supposed to do.
Speaker 2 (37:24):
And again this book, I mean.
Speaker 3 (37:25):
Last Call for bud Light, it tells sort of what
do you do in these crises?
Speaker 2 (37:28):
What should companies do?
Speaker 3 (37:30):
What's going to be better for business and better for
I think everyday citizens as well.
Speaker 1 (37:33):
Moving forward, they have this tremendous drop which is really
stunning at the time. How much have they recovered since then?
Speaker 2 (37:41):
So they haven't recovered at all since then.
Speaker 3 (37:43):
So sales in the weeks afterwards were down approximately thirty percent.
That was in twenty twenty three. They were down almost
thirty percent. In twenty twenty four they were down another
I think ten percent on bud Light, and to start
this year they continue to be down again.
Speaker 1 (37:57):
Once your brand starts to sync, unless something dramatic happens,
it becomes cumulative and people say, well, that's not what
I drink anymore.
Speaker 3 (38:08):
That's it. It's not what I drink anymore. And then,
especially when the American population was really looking for their
CEO to come out and to make a strong statement
and talk about what bud light is. And he really
had three opportunities to do it. The first time, about
two weeks after the controversy, he released a statement where
he neither acknowledged the controversy, why they were in the controversy,
or how they were going to get out of the controversy.
Speaker 2 (38:30):
And they kind of had a patronizing ad.
Speaker 3 (38:31):
Of kind of a Budweiser running across the country and
it was panned across the country about saying, this is
not how you handle a crisis.
Speaker 2 (38:38):
So sales continued to fall.
Speaker 3 (38:39):
A month later, there was another statement that it was
also a nothing burger where it didn't admit mistake. And
then there was a third opportunity where the CEO, Brendan Witworth,
had an opportunity to go on CBS, and he was
on CBS going to July fourth weekend, which is the
biggest beer selling holiday of the year, and he tried
to write the ship but he was very much coached
(39:00):
going into this to not again address the controversy, and
the CBS host asked the first question was essentially, hey,
knowing what you know now, would you do this.
Speaker 2 (39:09):
Campaign again or was it a mistake?
Speaker 3 (39:11):
And he gave a very wishy washy, evasive answer, and
the host came back and said, to be clear, you
are in the problem, in the situation you're in because
of the answer you just gave, or you didn't answer
the question, So let me ask it again because the
American population wants to know was this mistake?
Speaker 2 (39:25):
Would you do it again?
Speaker 3 (39:26):
And again gave an evasive, wishy washing answer, and ever
since then, I mean, sales continue to decline to suffer.
That's when I wrote my op ed saying this is
why you need to step down. This is not how
you do crisis management. This brand's not going to come back.
People are now moving on, and then you have a
compounding issue where once the sales are down that much, Walmart,
Kroger seven to eleven start taking your shelf space away,
(39:49):
and then when they take your shelf space away, then
it's very very hard to get your sales back because
you're out of stock.
Speaker 1 (39:53):
Well, Angel, I want to thank you for joining me.
Your new book and I love the title, Last Call
for bud Light, The Fall and Future of America's Favorite Beer,
is available now in Amazon and in bookstores everywhere. It's
a fascinating read. We're going to feature a link to
buy it on our show page. I'd really thank you
for this extraordinarily interesting conversation.
Speaker 2 (40:14):
Thank you so much for having dude. I really appreciate it.
Speaker 1 (40:19):
Thank you to my guests Dance on Prericks. You can
get a link to buy his new book, Last Call
for bud Light, The Fall and Future of America's Favorite
Beer on our show page at newtsworld dot com. New
World is produced by Gingwish three sixty and iHeartMedia. Our
executive producer is Guernsey Sloan. Our researcher is Rachel Peterson.
The artwork for the show was created by Steve Penley.
(40:41):
Special thanks to the team at Gingwish three sixty. If
you've been enjoying Newtsworld, I hope you'll go to Apple
Podcasts and both rate us with five stars and give
us a review so others can learn what it's all about.
Right now, listeners of Newtsworld can sign up for my
three free weekly columns at gingrishtree sixty dot com slash
new sletter. I'm nude Gingrich. This is newts Work.
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