Bud Light continues to drag Anheuser-Busch InBevโs bottom line in the United States, but the worldโs biggest brewerโs sales rose because of higher prices.
The company reported a 13.5% decline in third-quarter US revenue per 100 liters, a key measure of beer sales, as an ongoing backlash to Bud Light continues. The brandโs customers turned their backs on Bud Light after the company partnered with a transgender influencer โ and then muddled its response.
AB InBev said that sales to US retailers declined nearly 17% โprimarily due to the volume decline of Bud Light.โ In response, the company cut deals with wholesalers, including writing checks to distributors, and increasing marketing spend on the brand. But that took a toll on the companyโs bottom line, and contributed to a 29% decline in adjusted US earnings.
Tuesdayโs report painted a bleak picture for Bud Light, sales and shipments of which have weakened dramatically since its brief and limited partnership with trans influencer Dylan Mulvaney in the spring.
In the summer, Bud Light lost its long-held top-selling American beer title to rival Modelo. The Constellation-owned brand has been making inroads in the US market for several years as customers switch their tastes to Mexican lagers.
Sales of Bud Light are still sinking, with volumes down 30% year-over-year for the four weeks ending on October 7, according to NIQ data given to Beer Business Daily newsletter.
But AB InBev is hopeful it can turn things around.
According to the companyโs research, over 40% of lapsed Bud Light customers said theyโre willing to give the brand another chance, said AB InBev CEO Michel Doukeris during a Tuesday analyst call discussing the companyโs third-quarter results. โThis gives us some certainty that we are moving in the right direction,โ he said, noting that the brandโs performance has been improving. โWe have a good grip on what we need to do and how we are proceeding from here.โ
AB InBev has found that its Bud Light consumers want โbeer without a debate,โ and that they want the brand to โfocus on beer,โ Doukeris said. โWe are taking the feedback.โ
In an effort to jumpstart sales, Bud Light has been rolling out marketing campaigns and partnerships it thinks will placate fans. The company has, for example, run ads featuring NFL players which include taglines like โeasy to drinkโ and โeasy to enjoy.โ
And last week, the UFC switched their beer sponsorship from Modelo to Bud Light in a reportedly record-breaking deal as part of ABโs revitalization efforts of the brand.
Still, the news for the beer giant was frothier globally. Overall revenue rose 5% to about $15.6 billion and adjusted earnings increased 4.1%, because of price increases. Volumes dipped 3.4%, despite growth in the Middle East, Africa and Asia-Pacific, while it warned of โsoftโ performance in Europe.
AB-InBev (BUD) shares rose 4% in premarket trading, with the company also announcing a $1 billion stock buyback.
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