Heineken CEO: Companies must “stand by your values”

In the wake of the Bud Light-Dylan Mulvaney marketing collaboration, Heineken CEO Dolf van der Brink said he has learned from that disaster. His advice is that companies have to beware of the ‘polarization in society’ but also ‘stand for your values.’

Dolf van der Brink said on CNBC’s Squawk Box Europe Monday that he is proud of how Heineken is handling the new woke world in marketing.

‘Particularly in the Western world, we do see a lot of polarization in society,’ he said when asked about the controversy on CNBC’s Squawk Box Europe. ‘And that’s affecting all players, all actors in society, also businesses and also brands.’

‘You have to be thoughtful, you have to be balanced. And at the same time, you need to stand for your values and your principles. And we try to do that to the best of our abilities.

‘So far, I’m proud of how our brand teams across our operating companies are navigating this new world,’ he added.

Anheuser-Busch InBev will release its second quarter earnings report on Thursday. The parent company of Bud Light lost $27 billion in market cap value since the collaboration with Mulvaney. Conservatives launched a boycott against buying Bud Light – the number one selling beer in the country at the time – and liberals criticized the company for not standing up for Mulvaney during the backlash. A-B InBev learned a hard lesson – know your customers. Also, appeasement doesn’t work. Kowtowing to the transgender activist community, Bud Light ended up pissing everyone off on both sides of the political spectrum.

Heineken is avoiding the financial hit that A-B InBev has taken since it waded into Woke World.

Sales in North and South Carolina have suffered the greatest dip, falling from 20 percent in 2022 to 12.5 percent in the same period of 2023- a drop of nearly 7 percent, according to the hospitality consumption data platform Union.

New York and New Jersey stumbled 5.1 percentage points combined, followed by Texas with a 2.4 points dip, Oregon and Washington falling 1.8 points and California with a 0.85 point drop.

The embattled beer brand had better luck in Texas, but still saw declining sales across the state. Bud Light sales dropped 2.4 points from 8 percent sales in 2022 to 5.6 percent in 2023.

In total Anheuser-Busch lost $27 billion in market cap value since Mulvaney’s controversial ad.

As of closing Monday, the company was trading at $57.30 — down nearly 5 percent over the past six months.

Besides the common sense approach of side-stepping cultural wars while selling beer, Heineken is reported to be ramping up marketing and selling expenses by a significant amount. In the first half of the year, that number was 0.2 billion. It’s about investing in future growth.

“We do that to really make sure we invest in future growth, support our brands and innovation.”

Van den Brink shares his thoughts about marketing and profits at the 3:50 mark.

Go woke, go broke. European companies are opening their eyes, too. Nothing like watching a competitor lose billions of dollars over a bone-headed marketing decision that insulted its customers to clear Heineken’s mind. Van den Brink said that Heineken cut its profit growth forecast Monday. Beer sales have declined and it had a 8.8% fall in operating profit. He blames worldwide inflation woes.

“We always knew the first half of the year would all be about the inflationary pressures on our input costs, particularly in Europe, which is an important region to us,” van den Brink said Monday.

“We front-loaded the year with pricing, as such we expected some volume softness in the beginning of the year. Overall we are quite happy with our strong revenue growth, we grew revenue between nine and 10% in 3 out of 4 regions.”

In a note, analysts at RBC Europe called the results the “worst set … we’ve had so far,” highlighting the forecast misses in the Americas and Europe and significant challenges in Asia supply chains and sales.

Heineken increased its marketing spending by 220M euros ($221M) in the first half of the year. Rest assured Heineken drinkers, advertising campaigns will not include big cultural statements at the expense of its most loyal customers.