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The Transformation of Cracker Barrel

The Transformation of Cracker Barrel

From the inside out, the Lebanon-based chain has quietly shifted its priorities away from its core customers

In 1991, in response to customer complaints, Lebanon-based Cracker Barrel distributed a memo ordering restaurant managers to fire anyone whose “sexual preferences [failed] to demonstrate normal heterosexual values.” Primarily targeted at effeminate men and masculine women who worked as servers, the order resulted in nine employees being fired. Caught in the crossfire was Cheryl Summerville, a 32-year-old lesbian cook from Douglasville, Georgia. There was no internet then, but news of the firings didn’t take long to spread.

As word of the memo circulated, Summerville reluctantly became the face of the controversy, appearing on 20/20, Larry King Live, and even Oprah. Meanwhile, a number of activist organizations, such as the National Gay and Lesbian Task Force and Queer Nation, organized protests at Cracker Barrels throughout the Southeast. In Nashville, the NGLTF conducted a sit-in during the normally bustling Sunday brunch, ordering the minimum cup of coffee or soda and occupying 97 percent of the tables as they ground business to a halt.

“Cracker Barrel presumed they could get away with this policy because they thought we were just a bunch of ‘fags’ and ‘dykes’ and nobody would care,” said the NGLTF’s Ivy Young at the Nashville rally. “They got a huge shock when they discovered that lesbians, gays and people of good conscience around the country are speaking out and protesting their bigotry.”

At the time, there was nothing illegal about the policy. Nonetheless, the protests and negative media attention had their desired effect: Cracker Barrel rescinded the policy just a month after firing Summerville. Protests continued even after the company's official announcement, but beyond the activist community and the media who willingly amplified their message, the incident barely registered.

Customers did not seem bothered, revenues did not slump, and the stock price on the NYSE didn’t show any signs of disruption. In fact, over the next year, the stock price more than doubled. “Let’s face it,” said Summerville, reflecting on the incident in 2014. “We didn’t have a great deal of support from the customer base. It really took their shareholders to make a difference to bring them into the 20th century.”

Fast forward to 2024. Cracker Barrel has purportedly put its bigoted past behind it, signing on as one of the sponsors to Nashville Pride and engaging with several other LGBTQ organizations such as Out & Equal. Save last year’s rainbow-rocking chair gaffe (which has notably not been repeated this year), most of the chains' support for such organizations happens out of view of customers. You will not see Pride-themed merchandise or even rainbow flags flying at Cracker Barrel. Instead, the traditional American flag bunting continues to adorn the iconic front porches of locations across the country.

So, how did Cracker Barrel, a company that built its entire reputation on serving traditional Southern fare in a family-friendly, down-home setting, end up sponsoring Nashville Pride in 2024? That story begins in 2002 with the world’s largest LGBTQ advocacy group: the Human Rights Campaign.

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At a fundamental level, the story of how Pride Month has exploded into the event it is today can be explained quite simply: twenty-two years ago, The Human Rights Campaign created an ESG-like national benchmarking tool called the Corporate Equality Index (CEI), which scores companies based on the “gender identity protections” they adopt.

In August 2002, the HRC launched its inaugural CEI, which rated 319 companies on seven different criteria, including whether they had a “written non-discrimination policy covering sexual orientation” or offered health insurance to cover employees’ same-sex partners. That first year, only 89 of the companies were willing participants, and a paltry 13 companies received a perfect score. Of the 319 companies included, nearly two-thirds were Fortune 500 companies. The rest were large private companies, companies that actively sought to participate, or companies about which WorkNet—an internal database maintained by the HRC that served as a sort of LGBT Green Book—had sufficient information.

Cracker Barrel was of the latter variety: a publicly traded company that wasn’t in the Fortune 500, but whose policies had made headlines enough times for the HRC to have sufficient scoring data. Cracker Barrel wasn't a willing participant, but a subject picked out of a line of suspects, low-hanging fruit that would make a perfect example. In that inaugural survey, the HRC singled out the chain in the opening pages of the report, awarding it a score of zero.

The score and the protracted, decades-long media assault on the organization for its chilly LGBT protocols likely resulted in the successful addition of sexual orientation to the company's non-discrimination policy. In November 2002, just three months after the CEI was released, 58 percent of shareholders voted in favor of adding the clause. In 1993, even after the negative press that followed from Summerville’s firing, 77 percent of shareholders had voted against an identical proposal.

As CEI gained cultural clout, Cracker Barrel slowly began to play ball, achieving a score of 15 in 2006 and a 55 in 2010, resulting in praise from local outlets on their progress. However, the transition from traditional to modern was not without hesitation, as the company uneasily tried to tread the line between appeasing the corporate media mob and remaining loyal to its customers. In 2014, Duck Dynasty’s Phil Robertson told GQ in an interview that sin starts with “homosexual behavior and just morphs out from there.” At the time, Cracker Barrel carried Duck Dynasty-branded items in their gift shop. As the criticism rolled in and the HRC issued a condemnation of the remarks, Cracker Barrel took the items off the shelves before changing its mind just 24 hours later after a barrage of backlash from customers.

In 2019, the company was earning praise from LGBTQ advocates for declining to let Grayson Fritts, pastor of Knoxville’s All Scripture Baptist Church, hold an event at a Cleveland, Tennessee restaurant in the wake of comments made against the LGBT community. Mary Mancini, then chair of the Tennessee Democratic Party, contacted corporate headquarters about the event, resulting in the cancellation. And of course, to cap it all off, there was the aforementioned rainbow rocking chair.

By 2021, the company's support for LGBT causes became indisputable. As it states on its Diversity and Inclusion page, “Cracker Barrel scored 80 on the Human Rights Campaign Foundation's Corporate Equality Index. This national benchmarking tool measures policies, practices, and benefits pertinent to lesbian, gay, bisexual, transgender, and queer (LGBTQ+) employees and is a primary driving force for LGBTQ+ workplace inclusion.”

In 2023, twenty-one years after the inaugural CEI survey, 1,386 companies willingly participated, with 545 of those earning perfect scores. Since its inception, the criteria have changed a total of five times. Recent additions award companies for public support, such as sponsoring a Pride parade (hence Cracker Barrel’s sponsoring Nashville Pride) and penalize them for kowtowing to public pressure (like when Bud Light distanced itself from Dylan Mulvaney).

In the most recent version of the survey, the HRC added additional criteria for the first time since 2016, including inconceivable policies such as “integration of intersectionality in professional development” and health coverage for trans-identifying employees “without exclusion for medically necessary care.” There is always more work to be done, after all. In 2023, Cracker Barrel scored a 30 for refusing to comply with the two items mentioned above, in addition to other criteria, such as providing Gender Transition Guidelines to employees.

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As new CEO Julie Felss Masino settles in, it remains to be seen how Cracker Barrel will adapt to the CEI’s new criteria. In March, Masino announced that the iconic family chain would undergo a series of changes to make it “more relevant.” Masino has focused her efforts on changes like new menu items, adjusted pricing and interior remodels. "The goal, simply put, was to freshen things in such a way as to be noticeable and attractive but still feel like Cracker Barrel," she told investors. Shortly after her announcement, the stock price plummeted.

As an explicitly traditional and Southern casual chain, Cracker Barrel has struggled to balance the demands of a publicly traded company with its steadfast commitment to family-forward, traditional mores. So, whenever a change is announced, it fills the faithful with anxiety. We reached out to Cracker Barrel regarding some of these concerns and did not receive a response.

Since its founding in 1969 and entrance to the New York Stock Exchange in 1981, the company has found itself at the nexus of a number of culture wars. Like many other brands before it, Cracker Barrel is undergoing a transformation. In the process, it is forsaking the old priorities that made it great in favor of higher margins and a younger, hipper, more pusillanimous, and interchangeable crowd that will give them less trouble.

Following the rainbow rocking chair fiasco last year, an admittedly comical “Cracker Barrel has fallen” meme spread across social media, with gobs of patrons proclaiming that the organization had gone woke. For the most part, these efforts to internalize the dogmatic demands of the LGBT caucus have happened behind closed doors. The company knows that its faithful patrons oppose such initiatives. Before stepping down, previous CEO Sandra Cochran indicated as much, vaguely attributing the stock’s dismal performance in the summer of 2023 to marketing misfires as sales missed expectations due to a decline in casual dining traffic. Masino seems to have interpreted that to mean the company needs a modern transformation. She claims it’s confronted by the fact that its most loyal demographic, diners over the age of 65, have not dined there as frequently since COVID-19, and that it must seek out a newer, younger customer base.

The question it now faces is whether the way forward is to accept the dictates of organizations like the HRC, which seek to sublimate it into just another undifferentiated restaurant, or to double down on what made it great in the beginning: the traditional dishes; the friendly service; the warm, inviting atmosphere; and the clientele that was typified by families settling in for brunch after church.

One restaurant to receive Masino’s remodel is a location in Mt. Juliet. Diners seemed resigned to the inevitability of change in interviews with WKRN at the remodeled location, lamenting the loss of the signature Cracker Barrel look, but sheepishly shrugged their shoulders in response. It’s self-evident the company has chosen to abandon the customers that made it into the cultural touchstone it is today, and instead, to run off chasing the rabbit of relevance.