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Bud Light’s Triumph: Brewing Success Amidst US Culture Clash Over Transgender Ad


Anheuser-Busch, the world’s largest brewer, has exceeded analysts’ expectations with its profit growth despite facing challenges in the US market. While the company experienced a significant decline in the US due to a Bud Light marketing controversy, it saw strong performance in key markets such as Brazil, China, and Colombia. Earnings in these markets increased by over 20% in the second quarter, offsetting the 28% drop in the US. Global sales growth also surpassed estimates, and the company has maintained its profit guidance for 2023. As a result, Anheuser-Busch’s shares rose by up to 5% during Thursday’s trading session.

Investec analyst Alicia Forry described the company’s performance as better than expected and highlighted the positive aspect of the unchanged full-year outlook. Despite the challenges faced, Anheuser-Busch has managed to navigate through the controversy and maintain stability in its financial projections.

The controversy began when transgender social media personality Dylan Mulvaney appeared in a Bud Light promotional video, sparking a culture-wars controversy. Following calls for a boycott from right-wing conservatives in the US, the company decided to sever ties with Mulvaney. Unfortunately, this decision led to a consumer backlash from Mulvaney’s supporters, resulting in a decline in Bud Light’s sales volumes in the US. Some analysts speculate that this decline may have a lasting impact on the brand’s performance.

Despite these challenges, Anheuser-Busch’s earnings still rose by 5% in the second quarter on an adjusted basis, which is double the rate expected by analysts. The company also witnessed an 18% increase in sales of its global brands, including Budweiser, Stella Artois, and Corona, outside of their home markets.

AB InBev, the parent company of Anheuser-Busch, experienced a significant drop in market share in the US in April. However, the company reported that its market share remained stable from the last week of April through the end of June. The decline in market share accounted for two-thirds of the profit decline in the US, while the remaining portion was attributed to a loss in productivity, increased marketing spending, and support for wholesalers during the crisis.

Rival companies have benefited from Anheuser-Busch’s misfortune. Constellation Brands, for example, reported revenue that exceeded analysts’ estimates after its Modelo brand surpassed Bud Light as the top-selling beer in the US. Similarly, Molson Coors Beverage reported record sales of its Miller Lite brand.

Last year, North America accounted for approximately one-third of AB InBev’s profit, according to Bloomberg Intelligence analyst Duncan Fox. In response to the challenges faced in the US market, the company has placed marketing executives involved in the Bud Light matter on leave and is cutting several hundred jobs. Additionally, Anheuser-Busch has tripled its media spending on the brand this summer and is sponsoring a series of country music concerts.

Despite the difficulties, AB InBev has reiterated its forecast that earnings will likely increase by 4% to 8%. Analysts are expecting a gain of 5.2%. Bloomberg Intelligence has noted that while Anheuser-Busch’s strategy of trading up consumers to premium offerings emphasizes price mix, volume remains crucial for brewery efficiency. The lack of growth in all regions, except for Asia, which has recovered from lockdowns, could become a concern for the company.

In conclusion, Anheuser-Busch has managed to overcome the challenges posed by the Bud Light marketing controversy in the US by performing strongly in other key markets. The company’s profit growth has exceeded expectations, and it has maintained its profit guidance for 2023. However, the decline in Bud Light’s sales volumes in the US and the lack of growth in certain regions raise concerns about future performance. Anheuser-Busch continues to take steps to address these challenges and remains optimistic about its earnings prospects, although analysts are slightly more conservative in their projections.

Thomas Lyons
Thomas Lyons
Thomas, the founder and chief editor at Top Rated, harbours a deep-seated passion for business, news, and product reviews. His thirst for knowledge and experience has led him on a journey across the length and breadth of the country, enabling him to garner a wealth of insight. At TopRated.ie, his sole aim is to deliver meticulously researched news and provide impartial reviews of fact checked Irish companies, thus helping readers make well-informed decisions.


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