AB InBev earnings beat expectations, ignore Bud Light debacle

The world’s biggest brewer finally has another reason to make headlines besides its Bud Light marketing blunder: stellar profits.

Belgium-based Anheuser-Busch InBev reported base profit of $4.76 billion, up 13.6% from the first quarter of 2022, in its first quarter results today (May 4). The company assigned the massive outbreak – Wall Street was expecting a jump of about 5.6%— “pricing actions” and “product premiumisations”. In other words, the price increases were absorbed by customers, and many of them switched to higher-tier products this quarter.

In announcing better-than-expected results, AB InBev did not mention the Bud Light controversy or its fallout, probably because everything arrived after the quarter ended March 31 and its effect would not be visible in these results. Aanalysts, however, read between the lines to say the company is cautious. For example, it could have raised its guidance following a strong first quarter, but the backlash from US conservatives against social media promotion may have prevented the company from doing so.

Later, when the results were called, CEO Michel Doukeris told investors it’s too early to get an overview” of the impact of the situation on sales. “Bud Light’s declining volume in the United StatesS in the first three weeks of April, as publicly announced, would represent approximately 1% of our overall worldwide volumes for that period,” he said.

Bud Light’s Inclusiveness Campaign Gone Wrong

A backlash against trans rights has engulfed various issues in the United States, from kids and drag shows to the supply of gender affirming healthcare For participation of trans athletes in sporting events. And then it came for the beer. Bud Light’s campaign with transgender influencer Dylan Mulvaney – the brewer sent him a personalized can to mark 365 days since his transition – has become a lightning rod in the political storm.

At Mulvaney’s April 2 Instagram post was not well received by the company’s more traditional and conservative beer drinkers. Supporters of Kari Lake, the failed 2022 GOP candidate backed by Donald Trump for governor of Arizona, refused to drink free Bud Light at an open bar at a rally in Iowa. A Kentucky restaurant owner says the divisive ad was the reason behind a bar fight to burst. A Florida restaurant chain has removed beer from its menu for acting against “biblical faith.” Florida Governor Ron DeSantis took a break his Disney feud say Bud Light lost him as a customer. Musician Kid Rock even filmed a video of himself shoot a bunch of Bud Light cans.

Beer sales would have since droppedand wholesalers have even received personal threats following the promotion’s backlash.

To make matters worse, the Bud Light maker failed to support his campaign and Mulvaney. On April 14, CEO Brendan Whitworth, without directly addressing the controversy, said in a press release that the beer brand “never intended to be part of a divisive discussion. Our business is to bring people together over a beer. The statement failed to quell the controversy , but managed to draw criticism from the LGBTQ community the ad was trying to reach.Whitworth’s response was weak, and too little too late, according to LGBTQ activists.

Big numbers: Bud Light sales plummet

26.1%: How much Bud Light sales fell in the week ending April 22, compared to the same period a year ago, according to Business Newsletter figures Beer Daily Business, cited by Barron’s. Meanwhile, rival beer brands Miller Lite and Coors Light are see an increase in sales.

Person of Interest: Alissa Heinerscheid

Alissa Heinerscheid, vice president of marketing for Anheuser-Busch who oversaw promotion of the partnership with Mulvaney, took leave, with his boss Daniel Blake. Todd Allen, global vice president of Budweiser, is to intervene.

In a podcast interview Released before the controversy, Heinerscheid explained that his mandate was to bring Bud Light to a new clientele: “I had a very clear job to do when I took over Bud Light. It was, this brand is in decline, it’s been in decline for a very long time, and if we don’t attract young drinkers to come and drink this brand, there will be no future for Bud Light.

Quote: Which side of the story will Bud Light be on?

“In terms of marketing, I hope and think they’ve realized that as a brand they’ll be gone in a few years if they’re not fully on the side of equality, because that’s what that the Gen Z consumer expects and demands”, —Stacy Lentz, co-owner of the Stonewall Inn, who organized a boycott of Bud Light during New York Pride to protest Anheuser-Busch donations to republican politicians who had supported anti-LGBTQ+ legislation.

AB InBev’s beer sales, in numbers

25%: Share of all beer consumed globally produced by AB InBev, which makes Budweiser, Stella Artois and Corona, among other brands

0.4%: The rise in the company’s beer sales took place in the first quarter of 2023, compared to a year ago. China’s eventual exit from Covid-19 lockdowns played a significant role given lower volumes in all other regions.

19.4%: The amount of U.S. beer shipped to wholesalers fell between December 2020 and December 2022, according to Wells Fargo. Light beer is particularly lose to craft beers, and other alcohols such as wine and spirits. Bud Light May Recover From Social Media Marketing Controversy, But Reverse years of erosion will be more difficult.

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This post has been updated with comments from Michel Doukeris.

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