Anheuser-Busch InBev, the global beer-making giant, has experienced a significant decline in sales and profit in the United States due to a conservative-led boycott of Bud Light. This comes after the company collaborated with a transgender influencer, Dylan Mulvaney, which sparked backlash from conservative commentators and celebrities.
Last quarter, Anheuser-Busch reported that its revenue in the United States fell more than 10 percent compared to the same period last year, primarily due to the volume decline of Bud Light. The operating profit of its U.S. unit also dropped by nearly 30 percent.
The backlash against Bud Light’s collaboration with Mulvaney has led to a loss in market share. Bud Light was overtaken by Modelo Especial as the nation’s top-selling beer in retail sales in June. Constellation Brands, the seller of Modelo in the United States, reported a 7.5 percent growth in beer volumes in its most recent quarter. In contrast, overall volume at Anheuser-Busch fell by more than 1 percent in the three months through June.
In response to the boycott and declining sales, Anheuser-Busch has taken action. The company put some marketing executives on leave and announced layoffs in its corporate offices. Michel Doukeris, the chief executive of Anheuser-Busch, stated that the company would focus on promoting its beers through partnerships with sports leagues and nonprofits that support military families and farmers.
Despite the challenges faced in the United States, Anheuser-Busch’s sales of other beers in different countries have helped bolster its overall results. Last quarter, the company reported a total revenue increase of just over 7 percent and a 5 percent gain in profit, surpassing analysts’ expectations. As a result, the company’s share price jumped more than 4 percent in early European trading.
Anheuser-Busch reiterated its forecast for profit growth of up to 8 percent this year. This prediction, along with the better-than-expected results, brought relief to investors. However, analysts at Morgan Stanley cautioned that the full impact of Bud Light’s troubles would likely be seen in the company’s next quarterly report.
The negative impact of the boycott is evident in Bud Light’s sales performance. According to Nielsen IQ data analyzed by Bump Williams, retail sales of Bud Light dropped by as much as 42 percent in some U.S. metro areas during the four-week period ending on July 22. Additionally, data from Union, an ordering system used in over 1,000 bars and restaurants in 34 states, revealed that sales of Bud Light in these establishments decreased by 34 percent last quarter. Bud Light has now fallen to fourth place at these establishments, trailing behind Miller Lite, Michelob Ultra, and Coors Light.
In contrast to Anheuser-Busch’s struggles, Molson Coors, the company that owns Coors Light and Miller Lite, reported record quarterly sales and a significant jump in profit. In the second quarter of this year, Coors and Miller sold 50 percent more beer than Bud Light, overtaking its sales for the first time.
As Anheuser-Busch continues to navigate the consequences of the Bud Light backlash, the company remains focused on meeting its profit forecast. Investors are hopeful that the company can withstand the challenges and maintain its growth trajectory. However, the true extent of the impact on Bud Light’s performance will become clearer in the coming months.