Robert Ottenstein, an analyst for investment banking advisory firm Evercore, predicted that the backlash against Bud Light and other brands owned by Anheuser-Busch may have peaked.
Bud Light garnered widespread controversy among conservatives after the brand nodded toward Dylan Mulvaney, a self-described transgender social media influencer, by sending him a beer can bearing his likeness. Market data obtained by the New York Post indicate that sales for Bud Light declined 23.6% in the week ended May 6 in comparison to the same period last year, a slightly more severe outcome than the 23.3% decline witnessed for the week ended April 29.
Other brands controlled by Anheuser-Busch have also taken blows: Budweiser sales have declined 11.4% and 9.7% for the weeks ended April 29 and May 6, Michelob Ultra sales have declined 4.3% and 2.9%, and Natural Light sales have declined 5.2% and 2.5%.
Ottenstein said in a research note shared with Yahoo Finance that a “second week of flattish trends strengthens the possibility that tracked channels have reached a point of stabilization” at significantly lower sales levels. Headwinds for Anheuser-Busch could alternatively be on the mend since some brands “improved sequentially, which is a positive sign that trends impacting the rest of the portfolio may be starting to reverse,” or could indicate that “overall industry strength positively impacted the data” since Molson Coors brands also saw improvements.
The research note from Evercore comes after investment bank HSBC downgraded Anheuser-Busch stock due to the controversy.
“The way this Bud Light crisis came about a month ago, management’s response to it and the loss of unprecedented volume and brand relevance raises many questions,” said Carlos Laboy, HSBC’s managing director for the global beverage sector. “If Budweiser and Bud Light are iconic American ideas that have long brought consumers together, why did these marketers fail to invite new consumers without alienating the core base of the firm’s largest brand?”
Alissa Heinerscheid, the vice president of marketing at Bud Light who oversaw the Mulvaney partnership, took a leave of absence after footage of her criticizing the “fratty” image of the brand circulated online. Daniel Blake, who leads marketing for Anheuser-Busch’s mainstream brands, was also placed on leave over the incident.
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Executives for Anheuser-Busch have downplayed the extent of the partnership and hired veteran Republican lobbyists in efforts to win back conservatives who once consumed the brew. One unnamed executive informed the New York Post that the company will produce a camouflage Bud Light can as part of an initiative that offers educational scholarships to family members of fallen American military service members and first responders, while Budweiser shared images of a limited edition beer can featuring patterns inspired by Harley-Davidson.
Anheuser-Busch nevertheless appears to have offended those on both ends of the political spectrum: beyond the conservative backlash, leftists and owners of gay bars across the country threatened to launch additional boycotts after the firm backed away from Mulvaney.
