Anheuser-Busch InBev, the world’s largest brewer, reported a significant drop in its third-quarter sales of Bud Light in the United States. The decline comes amid a controversial partnership with transgender influencer Dylan Mulvaney, which led to significant backlash against the brand.
- Bud Light experienced a 13.5% drop in the U.S. revenue per 100 liters in Q3.
- There was a further 17% decline in sales to U.S. retailers mainly attributable to the Bud Light volume decline.
- The partnership led to a conservative boycott which saw Modelo Especial, a Constellation-owned brand, take the title of the top-selling American beer.
- Bud Light’s sales volume decreased by 30% year-over-year for the four weeks ending on October 7, as per NIQ data.
Efforts to Revive Bud Light
In response to the slump, Anheuser-Busch InBev has initiated several strategic moves:
- The company cut deals with wholesalers and increased marketing expenditure on the Bud Light brand.
- Research suggests that over 40% of former Bud Light consumers are considering returning to the brand.
- CEO Michel Doukeris emphasized that Bud Light consumers desire a beer experience without debate. He added that the brand’s future strategies will center on the beer itself, steering clear of contentious topics.
- Bud Light has also rolled out marketing campaigns with NFL players and taglines emphasizing the ease of enjoying their beer.
- UFC, the mixed martial arts organization, recently switched its beer sponsorship from Modelo to Bud Light, marking a significant win for AB InBev. This six-year deal is reportedly the largest sponsorship in UFC’s history.
Global Performance and Other Key Metrics
Despite the challenges in the U.S., Anheuser-Busch InBev showcased growth on a global scale.
- Worldwide revenue rose by 5% to roughly $15.6 billion, with adjusted earnings seeing a 4.1% hike.
- These positive results are attributed to price increases, even as volumes decreased by 3.4%.
- Growth was especially noted in regions like the Middle East, Africa, and Asia-Pacific. However, the company also highlighted potential soft performance in Europe.
- The company’s stock also saw a surge, with shares rising by 4% in premarket trading. In addition, a $1 billion stock buyback was announced.
Looking Ahead
As part of the brand’s rehabilitation efforts, Anheuser-Busch InBev is focusing on uncontroversial marketing platforms. They plan to heavily promote Bud Light at sporting events and concerts, including associations with the NFL, college football, the country music festival Stagecoach, and Folds of Honor, a non-profit supporting military families. Furthermore, the company aims to distance itself from controversies like the Mulvaney partnership. Doukeris emphasized that the collaboration, which featured Mulvaney’s image on a Bud Light can, was never intended for broad public consumption but was a limited campaign.
The Broader Industry Landscape
The beer market isn’t just about the likes of Bud Light and AB InBev anymore. A slew of changes are underway in the industry. The arrival of craft beer makers heightened attention towards eco-friendliness, plus a rising interest in specialized tastes and authentic experiences have all thrown new hurdles and chances for big-name beer labels.
- Consumers are becoming more experimental, often preferring to explore local brews over global giants.
- There is a growing trend of non-alcoholic beers as a segment, driven by health-conscious choices and the desire to enjoy beer without the effects of alcohol.
- Sustainability initiatives, like eco-friendly packaging and waste reduction, are becoming a significant selling point for the modern consumer.
Conclusion
Although Bud Light is facing challenges in the U.S., Anheuser-Busch InBev remains upbeat about the brand’s prospects. They have a diverse plan to revitalize the brand combined with their global growth scheme, signaling continual triumph for the company. As shifts in customer tastes, politics, and society mold the beer industry, massive entities like Anheuser-Busch InBev must stay versatile and cater promptly to public demands.
