Tucker and Anson Frericks on How Big Business Was Captured by Wokeism and Is Now Self-Destructing

The discussion delves into the decline of Anheuser-Busch, highlighting its transformation from a robust American company to a subsidiary under Belgian ownership by InBev in 2008. This shift introduced a European stakeholder capitalism model, emphasizing diversity, equity, and inclusion (DEI), which clashed with its traditional meritocratic values. The conversation critiques the influence of large asset managers like BlackRock in promoting ESG (Environmental, Social, and Governance) agendas, which some argue are more about profit and control than genuine social progress. This ideology shift led to controversial marketing decisions, exemplified by the Bud Light-Dylan Mulvaney partnership, which alienated core consumers and resulted in significant financial losses. The dialogue underscores a broader cultural and economic conflict between American and European business philosophies, questioning the impact on U.S. corporate identity and consumer trust.

• Anheuser-Busch, once a great American company owned by the Bush family, was known for its deep understanding of the U.S. consumer.
• The company was taken over by InBev, a Belgian company, in 2008, leading to significant cultural changes.
• InBev's approach was more aligned with private equity, focusing on cost-cutting rather than brand growth.
• The headquarters moved from St. Louis, Missouri, to New York City, reflecting a shift in company culture and priorities.
• The adoption of ESG (Environmental, Social, and Governance) and DEI (Diversity, Equity, and Inclusion) philosophies marked a departure from traditional meritocracy values.

"The company got so big. And at some point, it owned Sea World. It owned Busch Gardens. It owned eight helicopters, 10 private jets. It got a little bit bloated. So it got taken over by this Belgian company, European company called InBev."

• The quote highlights the expansion and eventual acquisition of Anheuser-Busch by InBev, marking the beginning of cultural and operational changes.

• The discussion contrasts two corporate philosophies: Milton Friedman's shareholder capitalism versus the European stakeholder capitalism.
• Shareholder capitalism focuses on serving shareholders by creating great products, leading to business growth.
• Stakeholder capitalism aims to serve all stakeholders, including activists and government entities, often leading to diluted corporate focus.
• The U.S. model of shareholder capitalism has historically outperformed the European model in terms of economic growth and societal outcomes.

"Milton Friedman, famous economist, said the purpose of a Corporation was to serve its shareholders, the people who actually own the business. How do you do that? Well, you focus on your customers, focus on creating great products and services."

• This quote emphasizes the traditional American corporate focus on shareholder value and customer satisfaction as drivers of success.

• Post-2008 financial crisis, corporations faced pressure to repair capitalism's image, leading to increased focus on ESG and DEI initiatives.
• Asset management companies like BlackRock, State Street, and Vanguard began advocating for these issues, wielding significant influence over corporate policies.
• These initiatives gained momentum during the Trump administration, as progressive institutions sought corporate involvement in social and political issues.

"A lot of asset management companies, the Black Rocks, State Streets, Vanguard's of the world, they started really talking more about environmental social governance issues."

• This quote underscores the role of major asset managers in promoting ESG and DEI as part of a broader corporate agenda.

• The COVID-19 pandemic and the George Floyd incident further shifted corporate focus towards social issues.
• Companies were pressured to engage in societal crises, often at the expense of their core missions.
• The influence of large asset managers led to corporate involvement in political and social issues, with significant financial contributions to movements like Black Lives Matter.

"You had 70 different companies in the United States here donated over $200 billion to Black Lives Matter in the United States."

• This quote illustrates the large-scale corporate financial support for social movements, highlighting the shift in corporate priorities.

• The discussion points to economic inequality as a backdrop for corporate strategies, with wealth concentration among a small elite.
• Free money and low interest rates disproportionately benefited the banking sector, exacerbating wealth disparities.
• Social issues served as a cover for the financial gains of the elite, diverting attention from underlying economic imbalances.

"Most people are getting poorer, but a small number of people are way richer. I mean, it's measurable, I live among them, everyone's got a plane now, that was not true in 2008."

• This quote highlights the growing wealth gap and the role of economic policies in enriching a small segment of society.

• BlackRock, State Street, and Vanguard, as major asset managers, have significant influence over corporate governance.
• Their focus on ESG and DEI has led to changes in corporate policies, often aligning with progressive agendas.
• These managers control a large portion of corporate shares, allowing them to push for social and political involvement.

"BlackRock was really one of the leaders of this movement, along with State Street, Vanguard, those three largest asset managers in this entire country managed about $20 trillion worth assets."

• This quote emphasizes the power and influence of major asset managers in shaping corporate policies and priorities.

• European companies and philosophies have influenced American corporate values, particularly in stakeholder capitalism and DEI.
• Companies like Philip Morris International embody European values, promoting diversity and inclusion through quota systems.
• The imposition of European corporate values in different cultural contexts can create conflicts and challenges.

"And I think that's the problem we're seeing is that you have these more like European based companies that I think might sincerely probably believe a lot of this or the European mindset, which is very distinct from sort of the American capitalist model."

• This quote highlights the cultural and philosophical differences between European and American corporate models and their impact on global operations.

• Discussion on how consumer product companies have started to engage in social issues, including sex education and LGBTQ+ topics.
• Criticism of companies like Philip Morris for engaging in social issues unrelated to their core business.

"It does feel like one of these, like in 10 years, we're gonna look back and be like, you know, they were major consumer products companies that felt empowered to talk about your sex life and the sex lives of your children."

• Companies are seen as overstepping boundaries by engaging in social issues irrelevant to their business.

"I don't want Philip Morris to the other side. I don't want them advocating for the second amendment either. It's like your cigarette company. Just do that."

• Companies should focus on their core business rather than engaging in unrelated social or political advocacy.

• Concerns over TikTok's ownership by a Chinese company and its implications for U.S. national security.
• Discussion on the political motivations behind the push to sell TikTok in the U.S.

"Why is TikTok being asked to be sold in the United States? Well, because it's technically owned by a Chinese company and the Chinese values that they're collecting data and information, that's not going to work for the United States."

• The ownership of TikTok raises national security concerns due to data collection practices.

"They were considered a vector for unapproved foreign policy positions and that's where the Congress did that and they pretended it was about collecting data."

• The push to sell TikTok was politically motivated rather than purely about data privacy.

• Discussion on how globalization has influenced corporate values, leading to a shift away from traditional American values.
• Mention of companies like Anheuser-Busch adopting European-style diversity and inclusion practices.

"We've rejected it politically. But again, corporately, there's all these tethers from around the world because of the effects of globalization over the last 20 years that you have a lot of these companies that frankly, might not hold sort of those same American values."

• Globalization has led to a shift in corporate values, moving away from traditional American principles.

"In Europe, they have quota systems for how many board members have to look this way or be that way over in Europe."

• European practices, such as quota systems for diversity, are influencing American companies.

• Discussion on Anheuser-Busch's diversity initiatives and how they affected corporate decisions.
• The impact of diversity, equity, and inclusion (DEI) policies on business operations.

"The principles of the company changed. My joining was the meritocracy. It was like, we wanna hire the best and brightest and we wanna reward them based off their results and pay them accordingly, great."

• The company's shift from a merit-based approach to one focused on diversity and inclusion.

"All of a sudden the company starts putting in these diversity dashboards so we can see what the diversity makeup of your team."

• Introduction of diversity dashboards to monitor team composition based on diversity metrics.

• Emergence of Chief Diversity Officer roles in companies and their influence on corporate culture.
• Criticism of the role and its impact on company policies.

"Chief diversity officer, like this really wasn't even a position before 2020. And What do you make? I make diversity."

• The rapid growth of Chief Diversity Officer roles and their focus on diversity initiatives.

"This is the problem. You find things to do. And this was the problem, so the first thing was the whole pronoun police comes in."

• The role often involves implementing policies like pronoun use and quota systems.

• The controversy surrounding Bud Light's partnership with Dylan Mulvaney and its impact on the brand.
• Criticism of the decision-making process and the role of DEI in brand strategy.

"The Dylan-Mulvaney partnership, it was incredibly puzzling if you're a Bud Light drinker."

• The partnership was seen as misaligned with Bud Light's traditionally apolitical brand image.

"The problem with it was the person they hired was a lady who had grown up in New York City went to Harvard for undergrad, Wharton for grad school, had only lived in base of the Northeastern entire life."

• The hiring of a brand head with little connection to Bud Light's traditional customer base contributed to the misalignment.

• Discussion on the need for corporate pluralism and moving away from DEI-focused policies.
• Criticism of DEI initiatives as discriminatory against certain groups.

"I think the companies that have just moved on, I think we need to get them more to, I'll go back to a corporate pluralism of whatever your mission is as a company, just do that."

• Advocacy for companies to focus on their core missions rather than engaging in DEI initiatives.

"But the DEI is, the only people discriminated against in DEI are white men, obviously, straight white men."

• DEI initiatives are perceived as discriminatory against certain demographics, particularly white men.

• Discussion on the legality and morality of quota systems in corporate diversity initiatives.
• Reference to the Civil Rights Act and its implications for modern diversity practices.

"In the Civil Rights Act of 1964, it literally says, like, you cannot discriminate... because of race, sex, gender, national origin, etc."

• The Civil Rights Act prohibits discrimination based on race, sex, gender, and national origin.

"Hubert Humphries, who became Lyndon Johnson's VP... said, if this leads to quota systems, I will eat my hat."

• Historical context and skepticism about quota systems as a result of civil rights legislation.

• The discussion begins with criticism of corporations sponsoring individuals like Dylan Mulvaney, who have controversial public personas.
• Concerns are raised about brands like Zinn and Philip Morris potentially hiring Mulvaney, reflecting a broader trend of companies aligning with socially progressive causes.

"The partnership itself was it was obviously incredibly flawed."

• The partnership with Dylan Mulvaney is viewed as a misstep, indicating a disconnect between corporate decisions and consumer expectations.

• The conversation touches on how brands like Ben & Jerry's are clear about their social missions, which contrasts with companies like Zinn and Anheuser-Busch (AB) that have unclear stances.
• The discussion highlights the importance of brand consistency and its impact on consumer trust and sales.

"But like a company like Zinn or AB, like you had no idea that they were, you know, spending money on causes that like, you know in direct conflict with your own family."

• Lack of transparency and consistency in brand values can lead to consumer alienation and backlash.

• The effectiveness of boycotts is analyzed, with the Bud Light boycott serving as a case study.
• Two main reasons for successful boycotts are identified: the availability of substitutes and the perception of consumer impact.

"Boycotts tend to work for two reasons... If there's a easily accessible substitute... and if you actually feel like you're having an impact."

• The availability of alternative products and the visibility of sales declines contributed to the success of the Bud Light boycott.

• The influence of large shareholders and ESG (Environmental, Social, and Governance) policies on corporate decisions is discussed.
• The role of organizations like BlackRock, State Street, and Vanguard in promoting DEI (Diversity, Equity, and Inclusion) is highlighted.

"BlackRock, State Street Vanguard, who are technically these large shareholders of your business, they have adopted ESG and DI."

• Corporate adherence to ESG and DEI policies is often driven by the need to satisfy major investors and achieve high ratings.

• The concept of stakeholder capitalism is critiqued, with a focus on how it prioritizes certain agendas over consumer interests.
• The discussion suggests that this approach can undermine meritocracy and negatively impact businesses.

"It's called the stakeholder capitalism industrial complex."

• Stakeholder capitalism is seen as a system that can detract from a company's core mission and alienate its primary consumers.

• The conversation outlines how companies should respond to missteps, emphasizing the need for accountability and direct apologies.
• The failure of Anheuser-Busch to adequately address the backlash from its partnership with Mulvaney is used as an example.

"The answer is so simple. The first thing you do is that you fire the VP of marketing who just called your entire customer base fratting it out of touch."

• Effective crisis management involves acknowledging mistakes, taking responsibility, and making amends with consumers.

• The timing of the Bud Light partnership with Mulvaney is criticized for coinciding with politically charged events.
• The broader cultural and political climate is considered a factor in the backlash against the brand.

"This was during the time when a lot of legislation is in session... there were, I think, 25 bills across the country to ban biological men from playing as women in sports."

• Aligning with controversial figures during sensitive times can exacerbate consumer backlash and damage brand reputation.

• The leadership of Anheuser-Busch is critiqued for its lack of decisive action and accountability in the wake of the controversy.
• The discussion questions the criteria for selecting corporate leaders and the importance of genuine commitment to a company's core mission.

"I think the bigger piece is it's the lack of courage."

• Effective leadership requires courage, accountability, and a genuine connection to the company's values and mission.

• The conversation concludes with reflections on the need for companies to prioritize their core mission and consumer interests over external pressures.
• The potential for a brand comeback is discussed, contingent on acknowledgment of past mistakes and a renewed focus on core values.

"People love a great American comeback story... but to make that story, you have to admit again that there was a mistake and that you screwed up."

• Acknowledging past errors and realigning with consumer expectations are crucial for regaining trust and achieving a successful brand revival.

• Discussion on the American versus European corporate and cultural identity.
• Emphasis on the difference in philosophical systems and how they impact business and cultural decisions.
• The role of companies in navigating cultural wars and maintaining a diverse portfolio to cater to different audiences.

"These companies also need to go to... Netflix, a lot credit. If you remember, there was two or three years ago, Netflix getting a lot of pressure to cancel Dave Chappelle."

• Netflix maintained a stance on freedom of expression despite external pressures, illustrating the importance of supporting diverse content.

• Netflix's decision not to censor artists and its implications for freedom of speech.
• Comparison of Netflix's approach to Anheuser-Busch's handling of its portfolio and marketing strategies.

"We are not going to censor artists at Netflix. We are going to put out content for liberals, conservatives, whatever, you kind of name it."

• Netflix's culture document emphasized its commitment to artistic freedom, setting a precedent for other companies.

• Shifts in alcohol consumption patterns, particularly among younger generations.
• The rise of non-alcoholic beer and its market potential.

"There's been a massive drop off in the number of people drinking alcohol, and then across all cohorts, Gen Z, Millennial, Gen X, Boomers, everyone's generally drinking less also."

• Health consciousness is driving a decrease in alcohol consumption, creating opportunities for non-alcoholic beverages.

• Criticism of corporate leadership and lack of accountability in American businesses.
• The impact of European control on American companies and their cultural alignment.

"I don't understand the total lack of accountability in corporate America."

• Concerns about leadership accountability highlight the need for transparency and responsibility in corporate governance.

• The influence of social and political movements on corporate strategies.
• The role of businesses in societal change and the potential consequences of their actions.

"Some of the biggest social trends in the United States don't seem to have any winners. And that freaks me out."

• The complexity of social movements and their impact on businesses and society as a whole.

• The role of global competitors like China and Europe in shaping American corporate and cultural landscapes.
• The importance of maintaining American values and identity in business practices.

"The U.S. was always exceptional. It's always been the city upon a hill that people are going to go to, it's always unique and distinct and different."

• The need to preserve American exceptionalism and values in the face of global competition.

• The significance of the American Dream and meritocracy in attracting talent and fostering innovation.
• The challenges posed by internal and external forces seeking to undermine these principles.

"The greatest sort of asset that we have in this country is the American dream."

• The American Dream is a foundational concept that drives immigration and investment, highlighting its importance in national identity.

• Discussion on the potential benefits of returning Anheuser-Busch to American ownership.
• The strategic implications of corporate headquarters location and leadership.

"I think there's somebody like Warren Buffett could come, and maybe he buys the thing for $30 to $40 billion."

• The suggestion of American ownership reflects a desire to realign corporate strategies with national interests.

• The podcast concludes with a reflection on the importance of thoughtful leadership and strategic alignment with cultural values.
• Encouragement to explore further insights in the book "Last Call for Bud Light."

"Thank you, that was absolutely fascinating."

• The conversation underscores the complexity of cultural, corporate, and social dynamics in contemporary business practices.