OutKick founder Clay Travis did a bit of a social experiment at an event in Tennessee, and the results were hilarious.

What, he wondered, would happen if you provided free beer to people and gave them a choice between 3 different brands, including Bud Light?

The results were not good for Anheuser-Bush.

Overall consumption of Bud Light is now down 26%. That’s an unmitigated disaster for the brand. And many are now avoiding the beer to avoid being mocked for drinking the beer. There’s no quick fix here, brand is slaughtered in red state beer drinking communities. Bet there is…

— Clay Travis (@ClayTravis) May 8, 2023

Free beer. What red-blooded TN partygoer turns down free beer?

Apparent every single one of them if they have to be seen with Dylan Mulvaney’s favorite brew. Nobody wants to touch the stuff, at least if others can see the can.

I am pretty sure that if the cans were unlabeled nobody would have cared, but the social pressure against appearing to support Bud Light’s cultural faux pas is enormous, at least in the demographic that usually consumes the brew.

I personally find Bud Light inoffensive as a beer, but I am no connoisseur of beer. I prefer bourbon, and when I feel like a beer I tend to go for light and refreshing, not complex and bitter. I am not a real man, and I know it. I am an effete intellectual who hates IPAs. My wife is the beer drinker in the family.

But this controversy has nothing to do with beer tastes, and everything to do with the purposes of advertising and the meaning of “goodwill” in business terms.

Most advertising is not about informing people about the virtues of a product, or even a direct appeal to buy a product. They exist to create goodwill with customers. They build up the brand itself more than the product. That’s the meaning behind the old “Coke and a Smile” commercials, and why polar bears popped up in Coke ads for years. You associate Coke with things you like.

Bud’s brand was “young men having a fun time,” or what Bud’s marketing manager called “frat boys.” That’s why they had snarky commercials and gorgeous chicks because their customers like snarking and gorgeous chicks. Bud Light was creating a brand identity or goodwill. It established a brand identity that promised future sales.

Dylan Mulvaney was a bomb that blew up the goodwill. It isn’t just that Bud Light seemed to be promoting transgenderism–many of the people who are repelled by the marketing move are only mildly disgusted by Mulvaney and consider him something of a pathetic joke, not an existential threat to society or anything like that.

But nobody wants to be associated with a pathetic joke. They wanted to be associated with the absurdity of Spuds MacKenzie.

I do think that the conservative boycott of Bud Light is real and it is hurting, but I also believe that a major factor in Bud Light’s 26% drop in sales is the complete destruction of their goodwill with their customers. The company turned on its customers, deriding them as frat boys, and the frat boys and similar people rejected the insult.

Guys who like girls in bikinis don’t go for this and want nothing to do with it.

Bud Light’s attempts to recover by sorta/kinda distancing themselves from the marketing effort to change their customer base is also failing badly, harming their goodwill with the customers they originally were trying to seduce to their brand.

As much as this controversy is a skirmish in the culture wars, it is actually more revealing about how brands are hiring people who are aligned with progressive politics and the ESG agenda. This alienates them from their customers not just by offending some of them, but just as importantly by the demonstration of indifference to what makes their products attractive to people.

Businesses are not so much hurting themselves by being woke–a lot of people don’t notice and don’t care most of the time; they are hurting themselves because they are no longer interested in what their customers want. The people running major corporations are focused on what appeals to their own peers, who are transnational elites, and not what the average customer wants.

Ironically Apple, a company that is quite woke, cares deeply about understanding its customers and building that goodwill. If you look at their commercials they are not political, but rather create a brand aura of “cool.” That is the opposite of Dylan Mulvaney. The leadership of the company is at least as woke as anybody else but they also are interested in making bank, and they want everybody to buy their products. They talk to their fellow elites, but they market to their customer base.

That ad buys goodwill. It reminds boomers of their youth (Yellow Submarine) and the younger set with modern music and funkiness.

Woke is damaging to corporations not just because it alienates a slice of their customer base, but also because it ignores the value of the brand in favor of pushing an ideological agenda. Nobody likes to be lectured to.

Bud Light will survive but as a shadow of its former self. Not just because they offended a slice of their customers, but because they forgot they had customers at all. Their focus has been on pleasing activists, not consumers. And it’s unclear they have learned that lesson yet.