New York CNN –
Nearly nine months after Bud Light was at the center of one of the biggest mishaps in advertising history, beer sales are still down 30% weekly compared to the same period last year.
That's not how it should work. The year began with an expensive Super Bowl ad featuring actor Miles Teller and a new slogan – “Easy to Drink.” Easy to Enjoy” – which was supposed to herald a “new era” for the 40-year-old brand.
But a one-off sponsored Instagram post featuring transgender influencer Dylan Mulvaney last April drew attention from the right, drew ire from the left, derailed the brand's year and potentially cost it permanent damage.
Core customers abandoned the brand, and some customers on the left were also upset by parent company Anheuser-Busch's weak response to the transphobic backlash and its failure to support Mulvaney or the trans community.
Anheuser-Busch executives were undecided. “We never intended to be part of a discussion that divides people. Our business is bringing people together over a beer,” AB US CEO Brendan Whitworth said in a statement in April, in which he never mentioned details of the issue with Mulvany.
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Bud Light has had a year to forget.
This led to the Human Rights Campaign saying it was “troubled” by the company’s response, with AB subsequently having its top LGBTQ+ rating revoked. “When we saw that the company was working with Dylan, it was a good sign. It was a sign of inclusion,” Jay Brown, SVP of programs, research and education at HRC, told CNN. “What really concerned us was the company’s response when there was backlash.”
Shortly after Whitworth's statement was released, the company said two marketing vice presidents had been placed on leave. In June, she announced that she was ready to put the whole affair behind her. But it turned out that this was just the beginning of a broader restructuring of its US operations. Since then, AB announced about 400 layoffs of its corporate employees in July and announced in November that its U.S. marketing chief would also be leaving the company.
Perhaps the biggest blow to Bud Light came in August, when Mexican lager Modelo Especial dethroned Bud Light for the first time as America's best-selling beer in grocery and beer stores – a title the brand largely held for more than two decades.
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 best quarter of revenue since its merger in 2005.
All of this happened while AB's earnings painted a bleak picture for the struggling brand.
In its most recent earnings report, the company reported a 13.5% decline in U.S. sales per 100 liters – a key measure of beer sales – for Bud Light in the third quarter. And sales to retailers fell nearly 17%, “primarily due to volume declines at Bud Light.”
In response to the controversy, AB canceled contracts with wholesalers, including issuing checks to distributors and increasing marketing spending for the brand through television advertising focused on the NFL and music.
In November, Bud Light announced it would become the UFC's “official beer partner” as part of a record-breaking deal for the mixed martial arts league. Kid Rock, whose initial resistance was seen as a precursor to the boycott, said he was over it and was drinking the beer again.
Still, even some industry observers are surprised that Bud Light is still in this position, with weekly sales declining and no signs of recovery.
“We're all susceptible to attention spans that can quickly switch from one thing to the next, which is why I didn't think Bud Light's losses would be as severe or sustained as they have been,” said Bryan Roth, an analyst for Feel Goods Company and publisher of alcohol beverage newsletter Sightlines+ told CNN.
He added that the brand's losses “have remained about the same since mid-May, so it's clear that consumers have simply moved away from Bud Light as it has become more of a hot topic in pop culture and politics.”
For Bump Williams, president and CEO of Bump Williams Consulting, the continued losses are no surprise. He told CNN that Bud Light distributors “continue to feel insulted, insulted and belittled by the company's unapologetic and insensitive comments about how little it is.” Bud Light volume impacted global business and volume trends.”
Williams does not believe Bud Light will “fully recoup its losses in 2024 and likely would have suffered larger declines” had it not been for the financial program implemented with distributors that includes writing checks and even purchasing beer to drinkers in some bars included.
Impact on other brands
Bud Light's loss is a gain for other brands, including some in the AB family like the fast-growing Michelob Ultra. Williams said “thank God” that the low-carb beer was previously in a strong position, because his company's analysis shows Michelob Ultra “taking over the No. 1 brand positions in markets where Bud Light has fallen out of favor.”
Other beers also show benefits. Modelo Especial, Miller Lite, Coors Light, Yuengling Lager and Flight and Pabst Blue Ribbon have all gained dollars and volume in recent weeks at the expense of Bud Light, Williams said.
He added that he “sees no reason” why Modelo Especial will lose its title as the top-selling beer brand in the U.S. next year.
2024 will continue to be a struggle for Bud Light and its identity. Roth said customers will notice the shift from inclusivity and celebrating the LGBTQ+ community to an “incredibly generic” identity, with some ads encouraging simply drinking Bud Light.
“Today's consumers connect with brands because they represent ideas and values, not because a beer company is generally hand-waving that drinking its product will be 'easy to enjoy,'” Roth said.