Bud Light risks losing retail shelf space to competitors, warns former Anheuser-Busch exec
If Bud Light sales continue to lag, the brand risks losing shelf space at major retailers to competitors and 'locking in' lower market share, a former Anheuser-Busch executive has claimed.
In recent weeks, Bud Light sales have been down roughly a quarter from a year ago, as the brand faces conservative backlash over an April marketing deal with transgender influencer Dylan Mulvaney.
Anson Frericks, the former US president of sales and distribution for St. Louis-based Anheuser-Busch, said that retailers such as Walmart and Kroger typically 'reset' their shelf space allocations in the spring and fall, based on sales data.
For the fall reset in September, 'they generally take sales data from April, May, June, July, and then based off of that data in that time period, they will reallocate shelf space,' he told DailyMail.com in a phone interview on Saturday.
If Bud Light sales continue to slump, 'that shelf space will be allocated to Miller Lite, Coors Light, Yuengling, and some of the other brands that have that have taken share from them,' he said.
Anson Frericks, a former Anheuser-Bush executive, argued that if Bud Light sales continue to lag, the brand risks losing shelf space at major retailers to competitors
For the week ended May 20, Bud Light sales were down 25.7% from the same week a year ago
'Those brands will have a better likelihood to succeed longer term, because they have more shelf space, they have more inventory, they have more back-stock, and they have more availability for consumers,' he argued.
'That almost permanently then locks in this as the new norm of where their sales will be, and what their share of the beer category will be,' Frericks predicted of the impact on Bud Light.
Frericks said that the 'vast majority' of beer sales, some 80 to 90 percent, occur at traditional retail outlets, as opposed to sales at bars and restaurants.
Frericks, who co-founded Strive Asset Management with longshot Republican presidential candidate Vivek Ramaswamy after leaving A-B last year, has been harshly critical of his former employer's handling of the Mulvaney backlash.
'Anheuser-Bush needs to figure out a strategy, it needs to make a statement about who their customers are and who they're going to serve now, and try and regain those customers now in June and July, because by time it's August, September, it's too late,' he said.
But Bump Williams, whose consultancy of the same name analyzes the alcohol industry, expressed skepticism that Bud Light faced an imminent reduction in shelf space at major retailers.
He noted that, in 2023 year-to-date sales, Bud Light is still the top selling beer in the nation, though in recent individual weeks it has dipped below Modelo Especial.
'Bud Light COULD lose shelf space based upon lost sales, but I’d be hard pressed to believe that retailers would reduce shelf space on the #1 selling brand in the country today on a YTD basis,' Williams said in an email to DailyMail.com on Saturday.
'If at the end of 2023 we find that Bud Light dropped to the #2 selling brand, they’ll more than likely maintain their fair share of space,' he added.
AB InBev stock has lost more than 17% since the controversy began on April 1
The latest data indicates a hardening of recent sales trends, after Bud Light's April 1 promotion with Mulvaney (above) sparked anti-LGBTQ backlash and boycott threats
Anheuser-Bush did not immediately respond to a request for comment outside of normal business hours.
For the week ended May 20, Bud Light sales were down 25.7 percent from the same week a year ago, while nearest rival Model Especial saw sales jump 9.2 percent, according to data compiled by Williams's firm.
'While Bud Light loses week after week, Modelo Especial gains week after week and now Modelo outsells Bud Light on a national basis across all trade channels combined,' Bump Williams, who runs the consulting firm, told the New York Post.
'If this continues Modelo will surpass Bud Light for the year,' he added.
Modelo was the number two beer in the US last year, posting $3.8 billion in off-premises sales, compared to $4.8 billion for Bud Light, according to Bump Williams data.
Both Bud Light and Modelo are owned by Anheuser-Busch parent company AB InBev.
But as part of an anti-trust settlement, US sales of Modelo are controlled by rival Constellation Group and do not count as part of AB InBev's global volumes.
The latest data indicates a hardening of recent sales trends, after Bud Light's April 1 promotion with Mulvaney sparked anti-LGBTQ backlash and boycott threats.
For the four weeks through May 20, Bud Light sales dropped 24.3 percent from last year, while Modelo sales grew 8 percent.
'That's a monumental decline,' Williams told the Post. 'Modelo has surpassed Bud Light for the first time since it was launched in 1982.'
Boxes of Bud Light beer are seen at a liquors store in Buffalo Grove, Illinois in late April. In recent weeks, Bud Light sales have been down roughly a quarter from a year ago
After Bud Light, Modelo Especial was the number two beer in the US last year
In a recent note, JPMorgan analysts said they expect AB InBev's earnings before interest and tax in the US to drop 26 percent this year, on a 12 percent drop in volume and a 10 percent decline in sales.
'We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future,' the note said.
Bud Light's parent company said earlier this month it will triple its marketing spending in the US this summer as it tries to boost ailing sales.
The controversy emerged on April 1, when Mulvaney posted a video of herself cracking open a Bud Light on her Instagram page.
She showed off a customized can with her face on it that Bud Light sent her - one of many corporate freebies she gets and promotes to her millions of followers.
Three days after Mulvaney's post, Kid Rock posted a video of himself shooting cases of Bud Light, and country music stars John Rich and Travis Tritt publicly denounced the brand.
Within weeks, two marketing executives at Anheuser-Busch took a leave of absence. It's unclear whether they have returned to work yet.
After Anheuser-Busch tried to distance itself from the Mulvaney promotion, Bud Light also faced backlash from the opposite direction, with pro-LGBTQ groups accusing the company of abandoning the transgender influencer.
Still, Anheuser-Busch InBev CEO Michel Doukeris has downplayed the impact of the backlash, saying Bud Light's US sales declines in the first three weeks of April represented only 1 percent of InBev's global volumes.
'We believe we have the experience, the resources and the partners to manage this,' Doukeris said during a conference call with investors earlier this month.
Source: Daily Mail
