Most Americans have heard about Bud Light’s controversial marketing collaboration with transgender influencer Dylan Mulvaney in April 2023 from the ensuing boycott against the brand, which tanked sales. Former Anheuser-Busch executive Anson Frericks wants the public to know that the company was suffering from poor management and failed marketing for years before that explosive controversy erupted.
Books about major brands and corporations are often exposés filled with shocking accusations and scandals about how the firm in question is bad for consumers, America, and the world. Blue chip companies are rarely lucky enough to attract authors like Frericks, with Last Call for Bud Light: The Fall and Future of America’s Favorite Beer, who actually like the firms they’re writing about.
Fortunately, the history of Anheuser-Busch in Last Call is impressively even-handed. The company that was controversially bought out by Belgian-Brazilian beverage conglomerate InBev in 2008 was an American legend, but readers learn that it was also a high-cost, undisciplined behemoth led by a nepo-baby heir more interested in parties by the lake and jet setting than running the company well.
Readers get to be flies on the wall for the long-term culture clash between foreign InBev managers and traditional American beer executives based in St. Louis. We also see how the new owners’ focus on meritocracy and shareholder value likely saved Anheuser-Busch from an ignominious decline.
Both companies had their advantages and disadvantages. The South American and European executives brought in to integrate AB into the new global InBev environment introduced some much-needed operating discipline. They also lacked some of what had made the American company great in the first place, including cultural awareness of how the American beverage market worked.
Frericks details many missteps by InBev executives who assumed they could copy management and distribution strategies that worked in Brazil or Europe, despite US regulations and business norms differing significantly. The “three-tier” model of alcohol distribution in the US, a legacy of post-Prohibition laws and regulation, seems to have especially bedeviled international managers accustomed to a simpler and more centralized operating environment.
Ultimately, however, the description of this corporate evolution — one that could no doubt keep students at Frericks’ alma mater Harvard Business School occupied for an entire semester — is not the big story. InBev being more focused on growth rather than innovation, for example, was an issue, but it was the distraction of politics and eventual neglect of shareholders that really mattered. Starting in the 2010s, an increasing number of big public companies started talking about concepts like corporate social responsibility (CSR) and, more recently, environmental, social, and governance (ESG) theory. This pivot from shareholders and profit to a stakeholder approach to management deprioritized all of the normal things that make companies successful in the first place. The unfortunate result should have surprised no one.
Much has been written about ESG policies in corporate America over the last few years, especially to the extent that they have focused on controversial propositions like climate change activism and diversity, equity, and inclusion (DEI) hiring quotas. AB InBev wasn’t necessarily the worst or most aggressive case study in ESG adoption, but it was a good example of how a major global company allowed itself to be distracted from making and selling products to satisfied customers, to dabble in progressive political activism cloaked as corporate altruism.
Operating amid management trends originating with the World Economic Forum, United Nations agencies, and major asset managers like BlackRock, AB InBev started hiring new executives with trendy titles in the late 2010s — a Global Director of Diversity and Inclusion and a Global Vice President of Sustainability. They signed the CEO Action Diversity Pledge and CEO Carlos Brito hosted a “Day of Understanding” in which he shared his “personal insights on diversity, inclusion, and implicit bias.”
This was all happening at the same time that the Business Roundtable (BRT), an association of hundreds of CEOs of major companies, issued a document redefining the nature of a corporation in the modern world. In the summer of 2019, BRT received an avalanche of earned media exposure when it released its new manifesto dethroning shareholders from primacy and instead enumerating a list of stakeholders whose interests it claimed to prioritize instead.
But, as Frericks notes when he talks about the shallowness of much of this supposedly enlightened corporate rhetoric, this major new pronouncement wasn’t as revolutionary as it seemed. The CEO co-signatories of the BRT statement committed to things like “dealing fairly and ethically with our suppliers” and “compensating [employees] fairly.” That’s great, but one might well ask those CEOs, “Weren’t you being fair before?” Presumably the PR managers and corporate counsels of the companies involved would have assured you at the time that they had, in fact, been fair and equitable all along. Also great, but if that was the case — what was the point of the statement?
Over the past several years, corporate America — Anheuser-Busch included — has attempted to massage its public reputation by making claims of virtue without either admitting to any particular past sins or making any changes in its operations that weren’t profitable for other reasons. Ask the hotel chains that will now only wash our towels or clean our room every other day. It sure saves them a lot of money on housekeeping, but the laminated card on the bathroom counter informs us that it’s being done for environmental reasons. How convenient.
This type of “greenwashing” of self-interested actions has gotten its deserved share of criticism in recent years. But the irony is that the earnest efforts to change corporate America are worse and more dangerous. We can simply roll our eyes when a CEO claims virtuous credit for implementing garden-variety cost cutting. But when a company abandons merit in hiring and promotion in favor of statistical equality between racial and ethnic groups, that creates a far more insidious effect. Frericks pithily describes how under AB InBev CEO Michel Doukeris, “Meritocracy was minimized. ‘Diversity’ was maximized.” He also suggests, as have many similar critics, that such virtue-signaling ESG initiatives were a strategy to cover stagnating (or declining) profits. A CEO who doesn’t want to talk about his company’s unflattering financials has unlimited opportunities to talk about its green operations, diversity goals, and community empowerment initiatives instead. Meanwhile, shareholders see the value of their nest eggs declining quarter after quarter.
Last Call comes at a pivotal moment in the debate over ESG and corporate America. Measured by almost any standard, the tide is turning – and Frericks’ side is winning. Major financial institutions are abandoning industry climate alliances, brand-name U.S. companies are dropping DEI programs, and even the Securities and Exchange Commission, under new leadership in the Trump administration, is rolling back its ESG-related rules and enforcement. While some supporters claim that reports of the death of ESG are exaggerated, the movement has clearly suffered massive reversals and lost the considerable momentum it enjoyed until very recently.
Frericks’ book will thus likely mark the end of an era in the world of ESG skepticism, albeit a triumphal one. Earlier titles like The Dictatorship of Woke Capital by Stephen Soukup and Woke, Inc.: Inside Corporate America’s Social Justice Scam by Frericks’ friend and later business partner Vivek Ramaswamy (both from 2021), created the conversation that has now turned decisively against stakeholder-ism and back toward traditional corporate purpose. Books complaining about DEI and ESG may very well look quaint and old-fashioned in another five years.
