AB InBev blames social media ‘misinformation’ for boycott against Bud Light, reports 13.2% Q1 revenue growth

BELGIUM – Belgian multinational drink and brewing company, AB InBev, has attributed the decline in the sales of beer in the US to the Bud Light controversy resulting in an ongoing boycott of its Bud Light brand in the US by far-right activists.

The beer brand became the subject of ire from some socially conservative Americans in April, after influencer Dylan Mulvaney, a trans woman, posted a video of a can of Bud Light with her likeness on it, sent to her by the company as part of its ‘March Madness’ campaign.

The video went viral and prompted outrage from some US consumers of the beer, which has often marketed itself around sports occasions.

According to AB InBev’s CEO, Michel Doukeris, the company is now restructuring, so its senior marketers across the business are “more closely connected to every aspect of [its] brands.” It is also tripling its media investment behind Bud Light this summer versus last to reignite support for the brand, which has lost sales because of the backlash.

While it is still too early to tell the full impact of the boycott, he said in the first three weeks of April, the decline in sales of the brand in the US represented around 1% of the business’s overall global volumes for that period.

Besides the boycott, the company has reported a 12.4% profit rise to US$7.25bn in its first quarter, a jump of 13.6% from the same quarter of 2022 since it all happened after the quarter ended on Mar. 31.

The growth was owed to “pricing actions” and “product premiumization,” proof that price hikes were absorbed by customers, and many of them opted for higher-tier products this quarter.

AB InBev sold 140,548 hectolitres, representing a 0.9% volume growth in the quarter from the same period last year. Own-beer volumes were 0.4% higher, and non-beer volumes were up 3.6%. AB InBev also owns brands including Beck’s, Corona, and Stella Artois.

Revenue also grew by 13.2% year-over-year, reaching US$13.24bn (£10.53bn). Revenues from non-alcoholic beers were up by 30% in the quarter.

The firm also said sales growth in its core beer portfolio was strong outside of the U.S., its biggest market, boosted by the return of consumer demand in China and continued growth in India.

For Full Year 2023, the company expects EBITDA to grow in line with our medium-term outlook of between 4-8%.

Garrett Nelson, a senior equity analyst at CFRA Research, said AB InBev’s reiteration of its full-year earnings growth forecast on Thursday should “reassure investors that financial concerns over the recent consumer backlash over the Bud Light brand are overblown, considering the company’s global portfolio of over 500 beer brands.”

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