‘You must stand up for your values’

Heineken’s chief executive says the company has learned from the social media controversy surrounding a campaign for rival beer Bud Light – but still believes companies should stand up for their “values.”

“Especially in the Western world, we see a lot of polarization in society. And it affects all players, all actors in society, also companies and also brands,” Dolf van den Brink told CNBC’s “Squawk Box Europe.”

“You have to be thoughtful, you have to be balanced. And at the same time, you must stand up for your values ​​and your principles. And we try to do that to the best of our ability,” he continued. “So far, I’m proud of how our brand teams across our operating companies are navigating this new world.”

Bud Light lost its spot as the top-selling beer in the US in May after conservatives boycotted the brand following a brief product placement deal with transgender social media influencer Dylan Mulvaney. Bud Light sales fell 24.6% in the year-over-year period, according to NielsenIQ data from consulting firm Bump Williams.

Bud Light is owned by Belgium’s Anheuser-Busch InBev, the world’s largest brewer, which will report its second quarter results on Thursday. The scandal has drawn political attention, with Florida Governor Ron DeSantis calling for an investigation into whether the company breached its duties to shareholders.

AB InBev has also been criticized for not standing behind Mulvaney, center wider debate on whether companies will continue to support social or political causes. Industry groups including Outvertising has urged brands not to pull back from campaigns and partnerships that support the LGBTQ+ community for fear of a similar backlash.

Heineken’s Dolf van den Brink said advertising remained crucial in a challenging market environment and that it had increased marketing spend by 200 million euros ($221 million) in the first half.

Heineken on Monday cut its 2023 profit growth forecastas it reported a 5.6% drop in beer sales and a similar 8.8% drop in operating profit, which came in below a company-compiled consensus forecast.

“We always knew that the first half of the year would be all about the inflationary pressure on our input costs, especially in Europe, which is an important region for us,” van den Brink told CNBC.

“We advanced the year with prices as we expected some softness in volume at the beginning of the year. Overall, we are quite pleased with our strong revenue growth, we grew revenue between nine and 10% in three out of four regions.”

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