In the wake of a controversial advertising campaign featuring transgender influencer Dylan Mulvaney, Anheuser-Busch InBev (BUD) continues to grapple with a series of challenges that have reverberated through the beer industry. The Bud Light brand, a flagship product for the brewing giant, has experienced a sharp decline in sales for the 17th consecutive week, plummeting 29% year-over-year as of the week ending July 29. This decline comes months after the company decided to partner with Mulvaney, which triggered a public backlash and led to calls for a boycott of Bud Light.
The financial implications of the controversy have not spared Anheuser-Busch InBev, as the company recorded a 13.5% drop in its U.S. revenue per 100 liters during the third quarter of 2023. This downturn prompted the company to make difficult decisions on the employment front, resulting in job cuts affecting approximately 2% of its workforce, or 350 positions. These job cuts, predominantly impacting corporate roles, were described by the company as a “very difficult but necessary decision” in the face of economic challenges.
To navigate these turbulent waters, Anheuser-Busch InBev has undergone changes in its leadership, with the resignation of Chief Marketing Officer Benoit Garbe. Garbe, who joined the company in 2021, will depart at the end of the year, citing a desire to embark on a new chapter in his career. Following his departure, the company’s U.S. Chief Commercial Officer, Kyle Norrington, will assume responsibility for overseeing marketing initiatives.
Anheuser-Busch CEO Michel Doukeris acknowledged the need for a strategic shift during the company’s Q2 earnings call, stating, “Regardless of favorability, our consumers across all the sentiment groups have three points of feedback in common. One, they want to enjoy their beer without a debate. Two, they want Bud Light to focus on beer. Third, they want Bud Light to concentrate on the platforms that all consumers love.” This move away from cultural debates signifies a recognition of the challenges posed by the controversial marketing campaign.
The fallout from the Bud Light controversy extends beyond the company’s internal dynamics. Bud Light has lost its position as the most popular beer in America, with Modelo claiming the top spot. Additionally, the parent company, Anheuser-Busch, is divesting several of its brands to Tilray, a Canadian consumer goods company. Brands including Shock Top, Breckenridge Brewery, Blue Point Brewing Company, and others are part of the sale, positioning Tilray to become the fifth-largest craft brewer in the U.S.
As Anheuser-Busch InBev navigates these challenges, the broader beer industry is witnessing a shift in consumer preferences, with niche and craft beers gaining popularity. This transition is driven, in part, by a desire for novel flavors and labels, as well as a response to larger brands engaging in political discourse. The YouGov survey as of Q2 2023 reveals shifting preferences, with Bud Light ranking 15th in popularity, while craft beers like Allagash White, Sierra Nevada Pale Ale, and Goose Island Bourbon County Brand Stout gain recognition.
The path forward for Anheuser-Busch InBev remains uncertain, but the company’s strategic moves, leadership adjustments, and brand divestitures underscore its commitment to addressing the challenges arising from the Bud Light controversy and adapting to evolving consumer preferences in the competitive beer market.
