Bud Light's plummeting sales show no signs of recovery
Bud Light's declining sales persist, weighing on Anheuser-Busch InBev's US profits However, the global revenue of the world's largest brewer surpassed expectations, showcasing strong growth
An ongoing backlash against Bud Light continues to negatively impact Anheuser-Busch InBev's bottom line in the United States, resulting in a 13.5% decline in third-quarter US revenue per 100 liters. Despite this, the world's largest brewer experienced an increase in sales due to higher prices. The decline in sales can be attributed to the brand's customers turning away after Bud Light's controversial partnership with a transgender influencer, coupled with a poorly executed response from the company.
AB InBev reported a nearly 17% decline in sales to US retailers, mainly attributed to the decrease in sales volume of Bud Light. To counteract this, the company took measures such as making agreements with wholesalers and increasing marketing investment in the brand. However, these actions had a negative impact on the company's financial performance, resulting in a 29% decrease in adjusted US earnings.
The latest report on Tuesday revealed a grim outlook for Bud Light, as its sales and shipments have significantly weakened since its brief and limited collaboration with trans influencer Dylan Mulvaney earlier this year.
Bud Light, once the best-selling American beer, lost its title to rival Modelo during the summer. Modelo, a brand owned by Constellation, has been gaining popularity in the US market as consumers increasingly prefer Mexican lagers.
Recent data from NIQ provided to the Beer Business Daily newsletter shows that Bud Light continues to struggle, with sales volumes down 30% year-over-year for the four weeks ending on October 7.
AB InBev is optimistic about its ability to reverse the situation. The company's research indicates that more than 40% of former Bud Light customers are open to reconsidering the brand, stated AB InBev CEO Michel Doukeris during an analyst call on Tuesday to discuss the company's third-quarter results. Doukeris expressed confidence that this indicates progress in the right direction and highlighted the brand's improving performance. He further emphasized that the company is well-aware of the necessary actions and has a clear plan moving forward.
AB InBev has discovered that its Bud Light consumers desire a beer experience devoid of any controversies, with a primary emphasis on the beer itself, according to Doukeris. "We acknowledge and are acting upon the feedback received."
To boost sales, Bud Light has increasingly introduced marketing campaigns and collaborations aimed at appeasing its fanbase. For instance, the company has released advertisements showcasing NFL players, accompanied by taglines such as "effortless to consume" and "effortless to savor."
Last week, the UFC made a significant change in their beer sponsorship by switching from Modelo to Bud Light. This move was reported to be a record-breaking deal and is part of AB's efforts to revitalize the brand.
However, on a global scale, the news was more positive for the beer giant. The overall revenue saw a 5% rise, totaling approximately $15.6 billion, and the adjusted earnings increased by 4.1% due to price increases. Despite growth in the Middle East, Africa, and Asia-Pacific, the volumes experienced a 3.4% decline, with a warning of "soft" performance in Europe.
AB-InBev (BUD) shares rose 4% in premarket trading, with the company also announcing a $1 billion stock buyback.
CNNs Danielle Wiener-Bronner contributed to this report.
