Maggie Gooding didn’t start her pet foods company to be a conservative counterweight in the industry, she said. She just has a passion for dogs.
(Bloomberg Law) — Maggie Gooding didn’t start her pet foods company to be a conservative counterweight in the industry, she said. She just has a passion for dogs.
After a decade working for pet food company Iams, Gooding grew disenchanted with what she saw as the industry’s pull to the left, including decisions that prioritized vegan and environmentally friendly products—or choosing “social wellness” over dog wellness.
So in April she launched Old Guard Pet Company, promising nutritious products created with “traditional” American values. “Don’t support companies that make you feel like an outsider,” a promotional video for the Tennessee company implores, touting its Big Guns dog food while celebrating soldiers and hunters—and their loyal canine friends.
Listen to reporters David Hood and Clara Hudson read this story.
Old Guard found customers after joining Public Square, a platform that acts like an online shopping mall for the right-leaning consumer. Founded two years ago, it caters to a growing wave of US businesses and merchants openly touting their conservative values and lashing back against what they see as overtly progressive messages and influences in the consumer marketplace.
From coffee to clothing lines, banking services to skin care, its members promote themselves as alternatives to so-called woke household corporations like Target, which came under fire for its Pride Month displays, and Anheuser-Busch, assailed for hiring a transgender influencer to sell Bud Light. The online marketplace has emerged as arguably the most coordinated attempt yet to use the anti-ESG sentiment as a building block for developing a parallel business ecosystem.
Public Square CEO Michael Seifert and his investors, who include Donald Trump Jr., plan to take the venture public next quarter.
Seifert says the potential market for values-conscious shoppers is 100 million. More than 1 million consumers have signed onto the platform since July 2022, the company said. As of Wednesday, the company’s app ranked No. 70 on the Apple App Store’s free shopping apps chart, topping brand names like Etsy at No. 74 and Nordstrom at No. 78.
“There’s this massive, unaddressed market of Americans that are saying: ‘We don’t want any part of that, we actually want the economy to go back to the way it was,” Seifert said.
The vilification of companies who adopt environmental, social and governance criteria as “going woke”—and not the risk-based framework as most of the financial community views it—stems in part from confusion about what ESG means. Barely one third of the respondents in a Gallup poll in May reported they were somewhat or very familiar with the term ESG; even more said they didn’t recognize it at all.
At the same time, “belief-driven buying” is on the rise. The number of Democratic belief-driven buyers increased 12 percentage points to 74% from 2020 to 2022, according to a survey by the Edelman Institute, a branch of public relations and research giant Edelman. The number increased 3 percentage points among Republicans in the same period.
“For a whole bunch of reasons, people are looking to businesses and brands to share their values, to share their identity, to speak for them and address societal issues, especially if they feel that government is not up to the job,” said Tonia Ries, an executive director at the institute.
A spike in customers who pick their bank, beer or barbecue based on ideologies could inflame the already divisive American culture wars, academics and researchers say. Business owners and others say the free-market economy should be left to chart its own course.
The debate over how corporations should reflect or respond to social issues has waxed and waned for decades but hit a peak now, said Lawrence Cunningham, a corporate governance professor at George Washington University.
Those who support ESG say it’s about protecting shareholder value from risks like the impact of climate change or allegations of discrimination. But mainstream companies could pause if they see an anti-woke business eating into their market share.
“I don’t think they can dismiss that,” Cunningham said.
Allegiance, not Advocacy
While Gooding’s business plan was intentional, others have drifted more slowly into the conservative-consumer lane.
Mission BBQ pays homage to soldiers, police and first-responders, and intentionally opened its first location on September 11, 2011, a decade after the terror attacks. The Maryland-based barbecue chain now boasts 134 locations in 19 states, and has become known for playing the National Anthem for lunchtime patrons.
Through May, at least some of the Mission locations were listed on PublicSq. where registered companies are asked to endorse values such as relying on US-sourced goods, defending Constitutional rights and celebrating “the sanctity of every life.”
Mission BBQ is no longer listed on the platform. Its leaders did not return numerous requests for comment.
Many other merchants on PublicSq. are smaller upstarts, the kind that before the internet might have been relegated to flea markets or traveling craft shows. The platform positions some as David-like alternatives to the Goliaths.
For instance, PublicSq. urges users to “ditch” GenZ-favorite skincare and makeup brand Glossier—promoted by mega influencer Sofia Richie—and “buy” Nimi Skincare as an alternative.
Nimi’s products are for the “woman who loves a good skincare routine, but who also loves her country, faith and family values,” according to its website. The South Carolina company, which sells 100% natural, cruelty-free and vegan products, is on track to make $1 million in revenue this year, founder and CEO Peter Stern said.
“The very quick growth of Nimi is a testament to, ‘Hey, there’s finally an option in the market.’ And that’s the beauty of capitalism: To support that alternative belief system,” he said.
PublicSq’s “ditch/buy” feature also asks its users to drop Starbucks in favor of Seven Weeks Coffee, named after the time it takes to detect a fetal heartbeat and when it’s grown to the size of a coffee bean.
The business, which sports a single electrocardiogram blip as its logo, says it donates at least 10% of its revenue to crisis pregnancy centers in a nod toward the Judeo-Christian tradition of tithing. Since November 2021, the company says it’s donated $118,000 to the pro-life organizations.
Founder Anton Krecic did not respond to requests for comment.
RedBalloon is an 18-month old startup that bills itself as an alternative to job search platforms Indeed, Careerbuilder and Ziprecruiter. CEO Andrew Crapuchettes started his jobs board amid the pandemic, targeting businesses that didn’t require employees to be vaccinated against Covid-19.
Today, RedBalloon lists for more than 3,000 employers, and averages between 15,000 and 20,000 job seekers per week, Crapuchettes said in an interview. (Indeed.com, by comparison, says on its website that it receives more than 300 million visitors every month and more than 245 million resumes.)
RedBalloon job-hunters sign a pledge acknowledging employers on the platform are seeking “freedom-oriented candidates.” Job-posters must commit to not discriminate against their employees’ personal beliefs, which Crapuchettes says too many companies do.
“There’s an aggressive push to adopt a worldview,” he said. “And if [workers] say ‘no,’ they have to find alternative economies so they can live, work and thrive.”
Financial advisor Jackson Paulishak used PublicSq. to solicit clients for Anti-Woke Investing, a one-man Maryland wealth advisory firm he started last year. He was also on the hunt online to find a marketing firm that would align with his conservative values and help him build his business.
Paulishak ended up partnering with Red Brand Media, a small Texas firm that promotes itself as “committed to preserving and upholding American values.”
VIDEO: ESG Explained: Socially Conscious Capitalism and Its Backlash
He and Julia McDonald, his partner at Red Brand Media, said it’s been tricky to succinctly describe ESG to potential customers that don’t know the concept. But they got an unexpected assist from Anheuser-Busch: A Facebook post on Anti-Woke Investing’s page critical of the beer maker’s decision this spring to spotlight transgender influencer Dylan Mulvaney drew thousands of reactions and comments.
Paulishak said customers that are drawn to businesses like his “feel their values are being completely ignored—and they’re tired of it.”
“Tired of it” could describe shoppers like Monica Stanley. That’s what the 50-year-old Arizona mother of twins said she felt after going into her local Target this spring and later seeing a frenzy online about alleged Satanist connections to its Pride-month merchandise. She said she won’t go back.
“It just made me realize I really need to be more aware of where I’m spending my money because I work really hard,” said Stanley. “Where I spend my money shows what I care about.”
Money Moves
Beyond the shoppers and merchants is a financial network of banks, insurers, asset managers, payment processors and investors looking to capitalize on the booming market.
Seifert calls it “an awakening” for consumers and investors. He and his partners raised $20 million to operate Public Square. This fall, Omeed Malik, the head of blank-check company Colombier Acquisition Corp., plans to take it public in an estimated $200 million deal. Malik, a former managing director at Bank of America and investor in The Daily Caller website, declined to comment.
In Oklahoma, investors led by former Greenberg Traurig lawyer Mike Ring spearheaded the purchase last year of a century-old community bank, First State, in Elmore City, 55 miles south of Oklahoma City. They rebranded it Old Glory Bank with a specifically targeted clientele: those who “do not want to be force-fed ESG.”
Old Glory Bank promises not to cancel its customers the way they say other financial institutions have done by cutting off their services. Its website says it will soon offer a PayPal-like money app, and aims to recruit customers “who hold tight to their beliefs of liberty, faith, family, security, privacy, and love of country.”
On May 31, a Twitter user identifying as a January 6 defendant asked the bank if it would service others who were prosecuted in connection with the riot, “many of whom have been de-banked.” Old Glory Bank, from its official account, said it would. “In fact, we already are for some,” the bank said in a June post.
Other Old Glory backers include Bill Shine, a former Fox Business Network president who later worked in the Trump White House; Ben Carson, former Housing and Urban Development Secretary; Mary Fallin, former Governor of Oklahoma; and John Rich, a country music singer.
By April, Old Glory Bank amassed nearly $260 million in assets, according to a regulatory filing. “Our marketing strategy is to de-commoditize banking by creating a bank for which customers will emotionally connect,” Ring said in an email.
Political Undercurrents
Many Democratic lawmakers, US agencies, asset managers and others in the financial industry say ESG isn’t the threatening specter that Republicans and other critics make it out to be, but simply a way to calculate corporate risk—and a necessary one at that.
State pension funds and others can’t operate without ESG, said Marieke Spence, executive director of Impact Capital Managers, a network of private capital funds investing in ESG funds.
“You can call it ESG, you can call it something else, but we’re not going to be able to operate—we have to consider these risks,” she told attendees at a Boston conference on sustainability last week. “We will be violating our fiduciary duty if we didn’t consider them.”
The emerging marketplace pushing back on some of those concepts is undeniably intertwined with politics—it’s unclear which is the chicken and which is the egg—and those ties are likely to grow as another presidential election looms.
Former President Donald Trump overshadows the ecosystem, and continues to promote his brand of staunch populism as he seeks reelection in 2024. His GOP rival, Florida Gov. Ron DeSantis has made attacks on ESG and “woke capitalism,” as well as his clash over Disney’s public support of LGBTQ rights, a focal point of his presidential campaign.
Another Republican hopeful, Vivek Ramaswamy, is one of the founders of an asset management firm determined to help “depoliticize” corporate America. Ramaswamy said he believes the new market rose amid concerns that big businesses were supporting one side of hot culture-war issues like abortion access and transgender rights.
Although he’s now pivoting away from talking as much about the acronym as he did in his 2021 book, “Woke, Inc.,” Ramaswamy said he’ll sometimes ask on the campaign trail if anyone has heard of ESG.
“A surprisingly high number of hands will go up,” he said in an interview.
Matt Cole, a veteran of the California Public Employees’ Retirement System (CalPERS) who is now running Strive Asset Management, the investment firm founded by Ramaswamy, said the movement is hurtling toward one of two outcomes.
“One, you create a completely parallel economy of basically knocking off corporations that have gone political one by one,” Cole said in an interview. Or, he said, operate in the best interest of shareholders by “de-politicizing Corporate America and making these corporations serve all their customers again.”
Ries, from the Edelman Institute, credits the blooming bifurcated market on a larger “infodemic” contagion, in which the loss of trust in reliable information sources fuels outrage. People’s ideologies are reinforced and perceived to be under threat, influencing behavior change, right down to where they shop.
“This is just another example of people who have figured out how to exploit those differences by turning them into a branding mechanism,” Ries said.
Cunningham, the George Washington professor, sees the turmoil easing. He predicts companies will bend to the push-and-pull from conservatives and liberals, but ultimately adjust their public messaging in an effort to stay out of inflammatory online discourse.
“Compromises are set, and then we can all drink the same coffee and the same beer and push along—the optimist in me predicts that’s where we’ll end up,” he said.
To contact the reporters on this story: Clara Hudson in Washington at chudson@bloombergindustry.com; David Hood in Washington at dhood@bloombergindustry.com
To contact the editors responsible for this story: John P. Martin at jmartin@bloombergindustry.com; Jeff Harrington at jharrington@bloombergindustry.com
(Updates 7th paragraph to show the number of PublicSq. users. A previous update corrected a misspelled name.)
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