Papa John's, Keurig, Under Armour, and Tiki torch: Brands could not escape politics in 2017

In 2017, Fox News devotees smashed their Keurig coffee machines in protest. Tiki Brand had to tell consumers that its torches are not for use at white nationalist rallies. Bose and Under Armour issued statements to assure football fans that they respect the American flag, while Papa John’s blamed its disappointing pizza sales on NFL players’ political demonstrations.

It was one of the biggest business stories of the year: consumer brands being forced to publicly take a political side. And the trend is unlikely to go away in 2018.

Social media has driven the phenomenon. In the President Trump era, the country is increasingly divided, and the divisiveness plays out on Twitter and Facebook. These platforms are where some people have claimed to be boycotting the NFL over player protests that disrespect the national anthem, where Trump voters added “Deplorable” to their display names as a badge of honor, and where people cry “fake news!” at articles they don’t like. Twitter is where the president himself has lobbed personal attacks at individuals from Mika Brzezinski of “Morning Joe” (“bleeding badly from a face-lift“) to Sen. Elizabeth Warren (“goofy“; “Pocahontas“; “bombed last night“) to Kim-Jong Un (“short and fat“).

But while the Trump presidency has added fuel to the flames, it is not the only cause of increased political rhetoric among Americans or the increased pressure Americans are now putting on big brands to make their political views known.

Under Armour, Kevin Plank, and Trump

In February, Under Armour CEO Kevin Plank made a single comment on CNBC that dogged his company for the rest of the year.

Plank, who was among a group of CEOs that had breakfast with President Trump on Trump’s very first Monday in office, told CNBC: “To have such a pro-business president is something that’s a real asset for this country.”

The sound bite in the media became simply “Kevin Plank says President Trump is an asset,” and key Under Armour athletes spoke out against the CEO.

NBA player Steph Curry was the first: he told the San Jose Mercury News “I agree with the description, if you remove the -et.” (You can see what you get if you remove the final two letters of “asset.”) Ballet dancer Misty Copeland posted a statement on Instagram: “I strongly disagree with Kevin Plank’s recent comments in support of Trump… I have spoken at length with Kevin privately about the matter, but as someone who takes my responsibility as a role model very seriously, it is important to me that he, and UA, take public action to clearly communicate and reflect our common values.” Dwayne “The Rock” Johnson, who has an endorsement deal with Under Armour, also posted a statement on Instagram, making clear that Plank’s words “were divisive and lacking in perspective. Inadvertently creating a situation where the personal political opinions of UA’s partners and its employees were overshadowed by the comments of its CEO.”

Facing this pressure from its own sponsored stars, Under Armour put out a long statement that outlined its corporate culture and concluded: “These are not new or revised values. This is what we believe. Under Armour and Kevin Plank are for job creation and American manufacturing capability. We believe building should be focused on much needed education, transportation, technology and urban infrastructure investment. We are against a travel ban and believe that immigration is a source of strength, diversity and innovation for global companies based in America like Under Armour.”

In August, after Merck CEO Kenneth Frazier dropped out of President Trump’s manufacturing council following Trump’s response to the violent rally in Charlottesville, Plank was the first CEO to follow Frazier’s lead, likely no accident after what the company had gone through six months earlier for its support of Trump.

Under Armour stock is down 47% in 2017. That’s mostly for business reasons: the company is in a miserable slump, characterized by falling sales in its home market of North America. At the end of October it slashed its 2017 outlook and predicted full-year operating income to come in at “0 to $10 million” for the year.

Tiki torches in Charlottesville

At a violent rally in August in Charlottesville, Va., angry white nationalists marched to protest the removal of a statue of General Robert E. Lee, and they toted Tiki torches while they marched. In subsequent photos, Tiki torches figured prominently in their hands, lighting up their faces at night.

Tiki Brand, which makes the bamboo torches, issued a statement: “Tiki Brand is not associated in any way with the events that took place in Charlottesville and are deeply saddened and disappointed. We do not support their message or the use of our products in this way. Our products are designed to enhance backyard gatherings and to help family and friends connect with each other at home in their yard.”

It was a serious statement, but it promptly went viral on social media because there was also something darkly comic, maybe even surreal, about the maker of Tiki torches announcing that its torches aren’t meant for white nationalist rallies.

Then again, both Tic Tac and Skittle had issued similar statements toward the end of 2016, during the presidential campaign. In September 2016, after Donald Trump Jr. tweeted a meme comparing Syrian refugees to a bowl of Skittles candies, Skittles put out a statement: “Skittles are candy. Refugees are people. We don’t feel it’s an appropriate analogy. We will respectfully refrain from further commentary as anything we say could be misinterpreted as marketing.” And in October 2016, after the Access Hollywood tape leaked on which President Trump said he had to “use some Tic Tacs, just in case I start kissing her,” Tic Tac put out a statement: “Tic Tac respects all women. We find the recent statements and behavior completely inappropriate and unacceptable.”

Skittles saying that Skittles are candy, and Tic Tac saying it respects women, are expressions of obvious fact that once would have seemed absurd. But such corporate statements are becoming commonplace now. And in the current political climate, they are taken not just as expressions of fact, but also of expressions of political opposition. (Politico interpreted Tic Tac’s statement as, “Tic Tac denounces Donald Trump.”)

NFL sponsors respond to anthem protests

In September, after President Trump trashed the NFL for allowing players to protest during the national anthem, NFL corporate sponsors were soon pressured to respond. Most remained silent, but some issued public statements—and parsing through those statements revealed truths about the political views of those companies.

Trump, in a three-minute stretch of a longer speech at a rally in Alabama, urged NFL team owners to fire “son of a bitch” players who kneel during the national anthem (“Wouldn’t you love to see one of these NFL owners, when somebody disrespects our flag, to say, ‘Get that son of a bitch off the field right now. Out! He’s fired. He’s fired!’”) and urged fans to walk out of NFL games if players protest during the anthem (“If you see it, even if it’s one player, leave the stadium. I guarantee things will stop”).

The NFL has 35 official league sponsors this year and took in $1.25 billion in sponsorship revenue last year. Consumers on social media swiftly began calling for sponsors to respond to Trump’s comments.

Under Armour, which had already taken an image hit twice before in 2017 for Trump-related reasons, issued a statement attempting to play to both sides of the anthem protest issue: “Under Armour stands for the flag and by our Athletes for free speech, expression and a unified America.”

Nike was more unequivocal: “Nike supports athletes and their right to freedom of expression on issues that are of great importance to our society.”

Amidst such strong views on all sides of the issue (fans offended by the player protests, fans supporting their right to protest, fans against the protests but also against Trump’s rhetoric about them), Nike’s statement was taken as anti-Trump, pro-kneeling.

Bose went the other way, with a statement focused on flying the flag: “Our world headquarters is in Massachusetts, where it’s been for over 50 years. It’s now surrounded by several other Bose facilities – and at all of them, at all times, we proudly fly the American flag. It’s a symbol of our great country which protects the freedom for every person to express their views. We respect that freedom, whether we agree with those views or not.”

Ford, Hyundai, and Anheuser-Busch InBev also issued statements that were hard to parse. Those six companies were the only ones to respond to the situation, out of 35 official sponsors. The fear of a backlash from any large group of consumers is too great. As Michael Jordan is credited with saying, “Republicans buy sneakers too.”

And speaking of consumer brands and politics, the NFL itself became one of the most divisive brands in the country this year, according to Morning Consult polling.

Along with his rhetoric against the NFL, Trump has also criticized ESPN, amplifying an existing narrative that ESPN has a liberal slant. In this regard, even ESPN parent company Disney has been affected by the politicization of brands in 2017.

Papa John’s blames protests

On its third-quarter earnings call in November, Papa John’s reported disappointing same-store results of 1% growth—less than analysts’ expectations.

Papa John himself, CEO John Schnatter, pointed a finger firmly at the NFL.

“The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction… NFL leadership has hurt Papa John’s shareholders,” he said. His argument: fewer people are watching the NFL, so fewer people are ordering Papa John’s pizza during NFL games.

Schnatter also said the player protests “should have been nipped in the bud” by the NFL last season, when Colin Kaepernick first started kneeling.

The comments erupted in the media and led many consumers to say they were done with Papa John’s. The story even garnered a response from rival Pizza Hut: Greg Creed, CEO of Yum Brands, which owns Pizza Hut, Taco Bell, and KFC, was asked to comment on Schnatter’s claim and said, “We’re not seeing any impact from any of that.”

Regardless of whether there was any business merit to Schnatter’s claim, Papa John’s soon apologized and walked it back, tweeting that Schnatter’s comments, “were describing the factors that impact our business and we sincerely apologize to anyone that thought they were divisive. That definitely was not our intention… We believe in the right to protest inequality and support the players’ movement to create a new platform for change. We also believe together, as Americans, we should honor our anthem. There is a way to do both.”

The tweets were an obvious damage control effort, and it was likely too late to win back any consumers Schnatter offended. Just five weeks later, on Dec. 21, Papa John’s announced Schnatter would resign as CEO. It did not specify an inciting reason.

And yet: Sanderson Farms, a producer of chicken wings, reported a large sales slump in December and followed Papa John’s lead, blaming the NFL ratings decline.

Smashing Keurigs

In November, after Fox News host Sean Hannity encouraged his viewers not to believe the headlines about Alabama Senate candidate Roy Moore, the president of Media Matters For America tweeted at Keurig asking if it would continue to advertise on Hannity’s show.

The next day, Keurig responded that it was pulling its ads from Hannity’s show. The swift response went viral, and sparked a swift backlash against Keurig from Hannity fans, who began posting videos to social media in which they destroyed their Keurig machines. Bloomberg View summarized the situation thusly in a headline: How do you take your Keurig? With a shot of crazy.

The situation got so out of hand that Hannity himself called a cease-fire of sorts on his show, and even offered to pay for a new Keurig machine for viewers who had destroyed theirs.

The Keurig destruction videos created a moment that had all the elements: rage, money wasted, homemade viral videos, Fox News, and liberals vs. conservatives. It perfectly capped off a year in which brands got sucked into politics, against their best efforts. No consumer brand wants to say or do anything that might risk alienating a portion of their potential customers. But in 2018, expect more to be unable to avoid it.

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Daniel Roberts is a writer at Yahoo Finance, covering media, sports and tech. Follow him on Twitter at @readDanwrite.

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