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Bud Light Reveals Aftermath of Controversy
February 29, 2024
In 2023, Anheuser-Busch InBev, the biggest brewer globally, faced a colossal setback, potentially losing $1.4 billion in sales due to a brief collaboration with a transgender influencer to endorse Bud Light beer.
Though reporting record revenues, AB InBev pointed out that its growth in the U.S. was limited due to a backlash triggered by a sponsored Instagram post featuring Dylan Mulvaney. Consequently, organic revenue in North America plummeted by $1.4 billion last year, mainly attributed to a decline in Bud Light sales, which forms a significant chunk of AB InBev’s revenue.
Following the partnership with Mulvaney, Bud Light sales nosedived as anti-trans sentiments stirred a boycott. The company’s lukewarm response further irked LGBTQ+ advocates. Subsequently, Modelo Especial claimed the top-selling beer spot in the U.S., ending Bud Light’s two-decade reign.
CEO Michel Doukeris acknowledged a sluggish recovery on Thursday when speaking to investors, with Bud Light regaining only 1.2 percentage points of lost market share from May 2023 to February 2024. Despite efforts, the pace remains slow, with the recovery of a mere 0.1 to 0.2 percentage points every few weeks.
Analysts criticized the underwhelming recovery, highlighting double-digit revenue declines and market share losses in the U.S.
In a separate development, AB InBev averted a potential strike by reaching a tentative agreement with the Teamsters union on Wednesday, benefiting shareholders. The strike would have seen 5,000 workers walk out at midnight on Thursday. The company remains cautiously optimistic about its U.S. business, noting a gradual improvement in market share since May.
However, AB InBev’s Asia business witnessed a setback, with Budweiser Brewing Company APAC shares dropping by nearly 7% in Hong Kong due to declining profits attributable to a one-off customs charge in South Korea. Sales volumes in China also dipped in the fourth quarter despite double-digit growth in premium brands.
The fallout from the Bud Light controversy serves as a cautionary tale, highlighting the delicate balance companies must strike when engaging with influencers in today’s social media landscape.
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