Bud Light had a year it wants to forget. What happens next?

By CNN Newsource

Published December 29, 2023 4:00 AM

By Jordan Valinsky, CNN

New York (CNN) — Nearly nine months after Bud Light was front and center in one of the biggest misfires in advertising history, sales of the beer are still down 30% weekly compared to the same time a year ago.

It wasn’t supposed to go like that. The year kicked off with an expensive Super Bowl ad with actor Miles Teller and a new slogan — “Easy to Drink. Easy to Enjoy” — which was supposed to mark a “new era” for the 40-year-old brand.

But a one-off sponsored Instagram post with transgender influencer Dylan Mulvaney last April garnered attention from the right, caught anger from the left, derailed the brand’s year and cost it possibly permanent damage.

Core customers abandoned the brand, with some customers on the left also angered by parent company Anheuser-Busch’s wimpy response to the transphobic backlash and its failure to support Mulvaney or the trans community.

Anheuser-Busch execs were left scrambling. “We never intended to be part of a discussion that divides people. We are in the business of bringing people together over a beer,” A-B US CEO Brendan Whitworth said in an April statement, which never actually mentioned specifics of the issue with Mulvany.

That led the Human Rights Campaign to say it was “disturbed” by the company’s response, and A-B subsequently had its top LGBTQ+ rating revoked. “When we saw the company working with Dylan, that was a good sign. It was a sign of inclusion,” Jay Brown, SVP of programs, research and training at HRC, told CNN. “What we were really disturbed by was the company’s reaction once the backlash started happening.”

Soon after Whitworth’s statement was released, the company said that two marketing vice presidents had taken leaves of absence. In June, it announced it was ready to put the whole matter behind it. But that turned out to be just the beginning of a broader shake-up in its US operations. Since then, A-B announced about 400 layoffs in July in its corporate staff and in November said its US chief marketing officer was also leaving the company.

Sales sink

Perhaps the biggest blow for Bud Light came in August when Mexican lager Modelo Especial dethroned Bud Light as America’s top-selling beer at grocery and beer stores — a title the brand largely held for more than two decades — for the first time ever.

Bud Light’s slump also gave its rivals a boost in sales, including Molson Coors, with the brewer of Miller Lite and Coors Light beers reporting its single best quarter of revenue since its 2005 merger.

All of this was happening while A-B’s earnings were painting a dismal picture for the beleaguered brand.

In its most recent earnings report, the company reported a 13.5% decline in third-quarter US revenue per 100 liters, a key measure of beer sales, for Bud Light. And sales to retailers declined nearly 17% “primarily due to the volume decline of Bud Light.”

In response to the controversy, A-B cut deals with wholesalers, including writing checks to distributors and increasing marketing spend on the brand with TV ads focusing on the NFL and music.

What’s next?

In November, Bud Light announced it was becoming the “official beer partner” of the UFC in a record-breaking deal for the mixed martial arts league. Kid Rock, whose initial opposition was seen as a harbinger of the boycott, said he was over it and was drinking the beer again.

Still, with weekly sales down and showing no signs of a recovery, even some industry observers are surprised that Bud Light is still in this position.

“We’re all susceptible to attention spans that can quickly shift from one thing to the next, which is why I didn’t think Bud Light’s losses would be as severe or as sustained as they’ve been,” Bryan Roth, an analyst for Feel Goods Company and editor of the alcohol beverage newsletter Sightlines+ told CNN.

He added that the brand’s losses have stayed “roughly the same since mid-May, so it’s clear that consumers simply moved away from Bud Light as it became more of a hot button issue in pop culture and politics.”

The sustained losses aren’t a surprise to Bump Williams, president and CEO of Bump Williams Consulting, who told CNN that Bud Light distributors “still feel insulted, slighted and minimized by corporate’s lack of apology and insensitive comments about how little Bud Light’s volume has had on their global business and volume trends.”

Williams doesn’t think that Bud Light will “fully recover its losses in 2024 and probably would have suffered greater declines” if it wasn’t for the financial program it implemented with distributors that included writing checks and even buying beer for drinkers at some bars.

Impact on other brands

Bud Light’s loss is a win for other brands, including some in the A-B family like fast-growing Michelob Ultra. Williams said “thank goodness” the low-carb beer was in a strong position before this, because his firm’s analysis shows that Michelob Ultra is “taking over the #1 brand positions in markets where Bud Light fell from grace.”

Other beers are also seeing a benefit. Modelo Especial, Miller Lite, Coors Light, Yuengling Lager and Flight, plus Pabst Blue Ribbon, are all gaining in dollars and volume at the expense of Bud Light in recent weeks, Williams said.

He added that he “sees no reason” why Modelo Especial will lose its title as the number-one beer brand in US in terms of sales next year.

Moving forward, 2024 will still be a struggle for Bud Light and its identity. Roth said that customers will notice the shift from being inclusive and celebrating the LGBTQ+ community to an “incredibly generic” identity with some ads that encourage simply drinking Bud Light.

“Today’s consumers feel connected to brands because they represent ideas and values, not because a beer company makes a general hand wave that drinking its product will be ‘easy to enjoy,’” Roth said.