Anheuser-Busch InBev, the parent company of Budweiser and Bud Light, among numerous other brands, has seen a major stock market decline in the past two months as consumers remain outraged over Bud Light’s Dylan Mulvaney partnership and sales fall dramatically as a result.
In fact, the stock is down nearly 20%, which would put it in bear market territory, since the April 1st Mulvaney post about Bud Light, which was meant to increase interest in the brand as the March Madness playoffs began.
Instead, it infuriated Bud Light drinkers and they boycotted it, easily finding similarly priced substitutes, as the light beer market is well past saturated at this point. And so Bud Light’s sales have tanks, putting it in range of losing its status as the most-sold beer in America.
And it’s not just Bud Light that’s feeling the pain. Other products owned by AB InBev have suffered painful sales drops as well. For example, Budweiser sales have dropped by 11.2 percent, Michelob Ultra declined by 6.5 percent, and Busch Light dropped 5.2 percent.
So, the stock for AB InBev has sold off and now the company has lost a massive $27 billion in market value since the Mulvaney ad went out, with its market capitalization falling to $107.44 billion from the $134.55 billion value it had on March 31, the day before the Mulvaney ad was released and the consumer outrage began. Here’s that ad:
And while April was painful for the brand, the boycott sticking around through May, with no end in sight, made things even worse. In fact, the month of May was the third-worst month ever for AB InBev’s shares.
Shares of AB InBev closed Friday at $54.85, which was up slightly for the day but down 4% from the close last Friday and down 18% from March 31, at which point the share price was $66.73.
Yet worse for Bud Light and its parent company, there’s not an end in sight for the boycott pain it’s feeling. Jared Dinges, a JP Morgan Chase beverage analyst, said on May 23 that, “We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future.” He then added that a near-permanent double-digit drop in sales is expected, saying, “We believe a 12% to 13% volume decline on an annualized basis would be a reasonable assumption.”
Dinges, continuing, said that sales weren’t even expected to recover in the fiscal year 2024, saying, at the time, “Shares [of Anheuser-Busch] have underperformed EU Beer peers by 15% since the start of April. We believe this is due to U.S. uncertainty, as investor focus has shifted squarely to the potential impact from the Bud Light controversy. … We do not expect the lost sales to be recovered in fiscal year 2024.”
The way out would be for Bud Light and AB InBev to apologize for the Mulvaney ad and say it won’t happen again, as that and only that would likely bring back those customers currently boycotting the brand. However, given the pressures to move to the left that most large brands face, that seems unlikely.
Featured image credit: screengrab from the embedded video
"*" indicates required fields