Bud Light boycott weighing on AB InBev but beer giant sees signs of optimism

Dive Brief:

• The Bud Light controversy continues to weigh on parent AB InBev, but the alcohol giant told analysts that its market share of the total beer in the U.S. has been stable since the end of April. 
• Michel Doukeris, AB InBev’s CEO, noted a recent survey that found more than 40% of lapsed Bud Light drinkers said they are now more open to coming back to drinking the brand. “They want that beer without a debate,” he said.
• Bud Light sales dropped after it collaborated with transgender influencer Dylan Mulvaney earlier this year. In May, it lost its position as the top-selling U.S. beer to Constellation Brands’ Modelo Especial.

Dive Insight:

During its most recent quarter, revenue in the U.S., the biggest market for AB InBev, declined 13.5% as Bud Light weighted on the beer giant.

At the same time, EBITDA (earnings before interest, taxes, depreciation and amortization) plunged 29.3%. About two thirds of the decrease, AB InBev said, was attributable to market share performance. The remainder was attributed to productivity loss, increased sales and marketing investments and support measures for its wholesalers.

Despite the gloomy data, it appears the fervor that rattled Bud Light recently has eased. 

While Bud Light is no longer the most popular beer, it remains a household name that could regain at least some of the market share it lost over time as the controversy abates and AB InBev spends money to promote it. 

Consumer insights firm HundredX analyzed 25,000 pieces of customer feedback and found that shopper intent, or plan to consume in next 12 months, bottomed out around July for Bud Light and has since grown 5%.

Recently, the brewer has focused on less uncontroversial marketing campaigns in the U.S., such as giving scholarships to military families. And last week, Bud Light signed a multiyear deal with UFC to become the martial arts league’s official beer sponsor — replacing Modelo.

The fact that nearly half of consumers who used to drink Bud Light expressed an openness to coming back to it is promising. Another bright spot for AB InBev also could be a boon for the beer industry as a whole. For several years, beer ceded market share to liquor. But during the quarter, AB InBev’s said it was gaining share in the value of total alcohol in the off-premise channel.

The Wall Street Journal noted that spirits makers by contrast have reported a slowing environment in the U.S. as consumers pull back on buying pricey liquor. As cash-strapped consumers watch their spending amid high inflation and increasing prices, beer could continue to be a big winner, with recognizable mainstream brands like Bud Light rising to the top.