Bud Light controversy cost AB InBev about $395 million in lost US sales
Hong Kong CNN —
The world’s largest brewer is counting the costs of being swept into a controversy over Bud Light in the United States.
AB InBev said Thursday that US revenue fell 10% in the second quarter as sales of its top brand slumped. Sales to US retailers declined by 14%, under-performing the wider beer industry, primarily due to the decline in the volume of Bud Light it sold, the company said in a statement.
Revenue fell $395 million in North America during the period, compared to the same time a year ago.
That figure included sales in Canada, where revenue rose, suggesting the slump was isolated to the United States and that the losses on Bud Light may have been even greater.
America’s former longtime No.1 beer has been hit by a backlash from right-wing media and anti-trans commentators since April, after sponsoring transgender influencer Dylan Mulvaney.
Mulvaney’s post that month of an image of a custom can of Bud Light on Instagram quickly spiraled into a public relations crisis — and sales fiasco — for the brand.
After her post, some anti-trans critics threw away their cans of beer and called for a boycott. Country singer Kid Rock filmed himself shooting cases of Bud Light, ending his video with expletives about the brand and its owner.
Florida Governor Ron DeSantis also weighed in, urging the state’s pension fund manager last month to consider legal action against AB InBev for what he called associating with “radical social ideologies.”
The governor suggested the group had breached its duties to shareholders over the matter. AB InBev responded by saying it took its responsibilities to investors seriously.
Meanwhile, the beverage giant was criticized by LGBTQ+ advocates, who said it had failed to support Mulvaney and the broader trans community. Mulvaney herself expressed disappointment with the company over its reaction.
At AB InBev’s previous earnings release in May, CEO Michel Doukeris acknowledged the firestorm but said it was too early to weigh the impact to its business.
The company has sought to limit the damage to its brand. On Thursday, it said its share of the US beer market fell during the second quarter, though its position had stabilized between late April and June.
It said it had worked with a third-party researcher since April to engage with more than 170,000 customers across the US.
“Most consumers surveyed are favorable towards the Bud Light brand and approximately 80% are favorable or neutral,” the drinks maker added.
Strong performance elsewhere
The latest results suggest the firestorm has been largely contained stateside. The company maintained its earnings outlook for the year, thanks to a stronger than expected performance elsewhere in the group.
Overall revenue for the Belgian group, which owns other marquee brands such as Stella Artois and Corona, rose 7.2% in the second quarter compared to a year ago, with a particularly strong performance in China.
Revenue there grew 7.6%, with growth “across all segments” and a higher-than-average sales volume for the industry, the company said.
AB InBev shares rose nearly 4% in Brussels on Thursday.
The brewer also enjoyed double-digit growth in South Africa and Colombia.
Like many other businesses, AB InBev has rolled out cost-cutting measures this year, as it seeks to defend its global lead.
Last week, the group said it would lay off some of its US corporate staff, after Bud Light lost its ranking as America’s best-selling beer to Mexican brewer Modelo in May.
— Juliana Liu contributed to this report.
Source: CNN
