A major bank recently downgraded the status of Anheuser-Busch Stock amid the continual controversy from Bud Light’s marketing promotion with transgender activist Dylan Mulvaney.
HSBC demoted Anheuser-Busch stock to a hold. Banks’ equity analysts will analyze companies’ financial performance and rate their publicly traded stock with a recommendation to buy, hold, or sell. The significant sales decline from the Dylan Mulvaney controversy has Wall Street worried about Anheuser-Busch’s financial prospects moving forward.
Carlos Laboy, managing director for the global beverage sector at HSBC, gave his thoughts on Anheuser-Busch’s management of its brand culture, claiming there are “deeper problems” in the company. Laboy said, “Is ABI’s leadership getting the brand culture transformation right? It’s mixed.”
He continued, “At Ambev, we think the answer is ‘yes;’ in the US, we think it’s ‘no’. 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.” Laboy added, “Why did its US leadership underestimate the risk of pushback given the recent experience of other firms? Is A-B hiring the best people to grow the brands and gauge risk?”
“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?” Laboy questioned. HSBC’s downgrade of Anheuser-Busch shares follows the newest sales data showing a continual acceleration of the Bud Light sales decline. The American Tribune reported on the latest sales figures from Bud Light and other brands under Anheuser-Busch:
According to the New York Post, nationwide sales of Bud Light declined 23.4 percent year-over-year during the week of April 29. The week prior, sales dropped 21.4 percent versus the prior year. Additionally, those boycotting Bud Light have also quit drinking the various other brands owned by Anheuser-Busch, such as Budweiser and Michelob-Ultra. During the week of April 29, Budweiser sales dropped 11.4 percent, and Michelob-Ultra fell 4.4 percent.
Other Anheuser-Busch brands, Natural Light and Busch Light saw a 5.2 percent and 1.8 percent decline, respectively.
Bump Williams, CEO of Bump Williams Consulting, has a dire prediction for Bud Light if the beer cannot recover from its sales decline soon. Williams said, “Bud Light is in serious trouble this year. I think it runs the risk of losing that No. 1 position at the end of calendar year 2023 to Modelo Especial.” Williams also touched on the controversy’s impact on other Anheuser-Busch brands. He said, “It’s not just a Bud Light issue. It’s an Anheuser-Busch portfolio problem now.”
“If Bud Light doesn’t fix its trend by the end of this month, it will continue to lose market share because it will lose Memorial Day. That kicks off the summer season,” Williams claimed. “There has to be a sense of urgency for InBev to correct these trends.”
Anheuser-Busch is taking drastic measures to recover from the ensuing crisis. The company fired the advertising agency responsible for the Mulvaney campaign, indicated it will ramp up ad spend in the coming months and is trying to repair strained relationships with its distributors.
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