Kraft Shareholders Vote to Support Gay Games Sponsorship
By George Anderson
A proposal calling on Kraft Foods to “disassociate itself” from its sponsorship of the upcoming 2006 Gay Games VII in Chicago along with any other activity supporting the homosexual lifestyle has been rejected by 99 percent of the company’s shareholders, according to AdAge.com.
The shareholder who made the proposal, Dr. Marcella Meyer of Chicago, took the position that the company could be legally liable if attendees who went to the Gay Games in July were to “experiment with homosexual encounters and later develops a serious, even fatal, illness.” Dr. Meyer cited studies that showed a link between homosexuality and sexually transmitted diseases such as AIDS to support her position.
Prior to the vote, Kraft Foods’ board urged its rejection saying the company’s support of the event was “well within the scope” of its charitable giving criteria.
Last May, Marc Firestone, executive VP-corporate counsel and corporate secretary for Kraft, sent a memo to employees reiterating the company’s support of the Gay Games. He wrote, “Diversity makes us a stronger company and connects us with the diversity that exists among the consumers who buy our products.”
Moderator’s Comment: Does the vote by Kraft Foods’ shareholders mean more companies will be willing to openly target market to homosexual men and women?
Have most consumer marketers come to the conclusion that the upside to marketing to gay and lesbian consumers outweighs the downside from groups that view homosexuality as abhorrent
behavior? – George Anderson – Moderator
Not much to add here, but I find it interesting that the proposal relied on a strained legal argument instead of a straightforward referendum on the propriety of associating with the Games. That indicates to me that those opposed to the sponsorship expected the majority of shareholders to agree with Kraft’s decision.
I am not too sure how product sales will be effected by this strategy but I hope the impact is positive with minimal backlash. To me, that result would signal that consumers paying attention to this sort of issue are moving towards a position of tolerance and acceptance of people in the world that do not share their same value system; and that this is not only okay but a good thing.
The shareholder vote seems to signal that many people are under the impression that it is better to be inclusive than exclude when you are appealing to a mass market; which Kraft does by nature of being such a large company.
Despite the fact that niches can be very profitable destinations for some business lines, trying to navigate the move from selling food that is potentially contributing to health problems to a healthier offering is tough enough with out alienating potential consumers that share similar concerns in these areas despite differences in social values.
I applaud the board at Kraft and the bold move to be an inclusive influence despite pressure to do otherwise. I further think that the rational given, that Kraft could be liable for sexually transmitted diseases, is a very thinly veiled attempt to use fear to forward personal moral values on the company.
It seems like once a business commits itself to the gay and lesbian market, it’s unlikely to retreat. The gay-hostile groups haven’t had significant success convincing companies to go back into the closet. Gay-hostile groups get media coverage but they don’t seem to prevail. Companies that start gay and lesbian marketing efforts anticipate some negative reaction. They’ve decided in advance to ignore it.
It kind of restores one’s faith in fundamental human decency, when a wrongheaded referendum like Dr. Meyer’s meets near unanimous rejection from a group as diverse as Kraft shareholders. Her stated argument of potential liability seems spurious at best – at worst, calculated to force controversy and generate ill will against the homosexual community.
Should Kraft target gay consumers? Only no more and no less than it targets any other group of consumers whose consumption needs its products can fill. Let’s invert the statement: Kraft should exclude no group of consumers from its broad and balanced marketing efforts. Supporting the Games in Chicago is just one of hundreds of promotional activities for the company and should not be considered particularly remarkable.
I don’t know that it’s as much weighing the upside versus the downside as it is simply revealing the culture of the leadership at companies that support such events. Never offering sponsorship won’t spark any protests or controversy, but to pull sponsorship will certainly call attention to that company. If Kraft had pulled out of the Gay Games, they no doubt would have been the target of protests and boycotts.
What upsets me is that comment she made about homosexuals and STD’s. And straight people don’t get them? That whole statement is a copout. Gays and Lesbians buy and use products like anybody else. They are no different. The company has the right to support whatever or whomever they want.
So what’s new?
Wikipedia: Altria Group retains a majority stake in Kraft Foods.
Quote. WSJ, Thursday, August 13, 1992
“In a move that could prompt renewed fury over tobacco marketing, industry giant, Philip Morris Cos. Next month will unveil Benson & Hedges Special Kings – an 85-millimeter version of its longer, upscale smoke – with ads directed in part at the homosexual market.”
Knowing Kraft and its marketing machine, the research was done to make sure the other market segments would be in line. Good move for Kraft. Others might open their minds to all consumers as well. Hmmmmmmmmmmm
If there was such a thing as the “Straight Games” would Kraft or other large corporations be able to sponsor them without being the target of protests and boycotts?
I think there’s a bit of overly extravagant conclusion drawing and intent of conclusion here that could be wholly misinterpreted.
First, the statement on diversity and acceptance of “gay and lesbian lifestyle” may be somewhat misleading if faced with the question of real support and acceptance of the “homosexual lifestyle.” But, that’s not the question here. There is another opportunity to support it and condemn those who don’t by masking the attacks in words like “inclusive” and ‘accepting.”
The fact of the matter is that this is a $25,000 amount as part of an overall $85 Million in giving budget from Kraft. It amounts to .029% That’s hardly an overwhelming statement. It also really says very little if anything about acceptance of and marketing to a gay and lesbian niche market.
The proposal on its face and at any depth is ludicrous. When such a proposal is made and can be interpreted in no other way but to be absolutely ridiculous. It obviously should be overwhelmingly defeated. I think it’s a huge misjudgement to draw sweeping conclusions about shareholders and public views on the broader issue, though.
From my view, the shareholders overwhelmingly defeated a proposal which used a premise that was totally ridiculous and it was judged on its merits. To interpret otherwise could be as ignorant as the proposal itself.
Kraft should do what they decide to do. They have an agreement and a responsibility to share holders of selling products for profits. If they choose to move marketing funds away from Chicago because it makes the best business sense, then do it.
There is not room for doubt in the decision making process.
Unless this is another area of cultural difference between the UK and the US, I would say that corporate sponsorship of community events is almost always seen as a positive thing. Being selective and excluding specific groups would be seen as negative, however, and withdrawing from previously agreed sponsorship no less than disastrous.
If a company chooses to be inclusive and to directly market to groups of consumers using its products, targeting those groups is essential for success whether the group is a religious conservative group, an environmentalist group, a gay, lesbian, or bi-sexual group, a union group. Targeting one group means other groups may be upset. Developing bland, untargeted promotion to appease everyone means no one identifies with your product or service. Targeting specific consumers means that messages are tailored to specific groups. Because groups are diverse companies are going to be targeting messages to specific groups and that may offend other groups. However, the practice won’t stop. The controversy won’t stop either because not all groups are accepting of all other groups. So the conversation will continue.
Corporate differentiation through target market segmentation is a vital role for any company’s marketing efforts. Kraft is recognizing that discrimination is not only a poor social, political and ethical choice, but is also a bad business decision. Regardless of their marketing efforts to straight or gay audiences, Kraft has to better identify their niche markets, and align themselves with these to ensure that they are successful. This market recognition doesn’t end with eliminating negative bias, but understanding that different segments have different needs, values and identify with different products. This is an astute decision by Kraft’s shareholders, and it should be duplicated in the rest of corporate America’s boardrooms. Discrimination is just plain bad.