Bud Light’s Struggles Persist Despite Global Revenue Surge for AB InBev

Anheuser-Busch InBev, the world’s largest brewer, saw a spike in overall sales owing to higher prices but continued to face challenges in the United States due to declining Bud Light revenues.

During the third quarter, the company reported a significant 13.5% decline in third-quarter US revenue per 100 litres, a crucial metric in beer sales, primarily attributed to the ongoing resistance to Bud Light. The brand experienced a loss in customer loyalty after a controversial partnership with a transgender influencer, followed by a perceived inadequate response from the company.

AB InBev revealed a nearly 17% decline in sales to US retailers, primarily due to Bud Light’s volume decline. To counter this setback, the company engaged in agreements with wholesalers, increasing marketing investments, and financial aid to distributors. However, these strategies negatively impacted the company’s US earnings, causing a 29% decline.

The impact on Bud Light’s sales and shipments has been notable since its limited association with a transgender influencer earlier in the year. Consequently, the brand lost its long-held status as the top-selling American beer to Modelo, owned by Constellation Brands, which has been gaining traction with its Mexican lagers.

Bud Light’s sales have continued to dwindle, with recent data revealing a 30% year-over-year decline ending on October 7. Despite this, AB InBev remains optimistic about regaining lost ground.

AB InBev’s research suggests that over 40% of former Bud Light customers are open to giving the brand another chance. CEO Michel Doukeris expressed confidence during the third-quarter results call, indicating that the brand’s performance has shown improvement. The company intends to focus on addressing consumer demands, emphasizing a need for beer-focused marketing devoid of controversy.

In response, Bud Light has initiated various marketing campaigns and partnerships to reassure its consumer base. Efforts include advertising with NFL players, emphasizing an “easy to drink” and “easy to enjoy” theme. Additionally, the UFC recently switched its beer sponsorship from Modelo to Bud Light as part of AB InBev’s revival strategies for the brand.

While the global market saw a 5% revenue increase to approximately $15.6 billion and a 4.1% rise in adjusted earnings attributed to price hikes, a 3.4% dip in volumes was noted, especially in Europe. Despite the challenges, AB-InBev shares surged by 4% in premarket trading, alongside the announcement of a $1 billion stock buyback.