Anheuser-Busch late Thursday revealed a plan to prop up its floundering Bud Light brand. The brand's sales tanked over the past two months, as conservative boycotts erupted following Bud Light's ad featuring transgender influencer Dylan Mulvaney on April 1.
"We recognize that over the last two months, the discussion surrounding our company and Bud Light has moved away from beer and this has impacted our consumers, our business partners, and our employees, " Anheuser-Busch CEO Brendan Whitworth wrote in a note Thursday. "To all our valued customers, we hear you. Our summer advertising launches next week and you can look forward to Bud Light reinforcing what you've always loved about our brand — that it's easy to drink and easy to enjoy."
Whitworth announced that Anheuser-Busch would invest in protecting front line workers' jobs, as well as providing financial support to its wholesale and distribution partners. Anheuser-Busch will assess the impact on individual wholesalers and provide sales incentive payments for beer sold through the end of the year. The company will also extend additional credit to wholesalers through the end of 2023 and reimburse them for freight and fuel surcharges. Anheuser-Busch also plans to increase brand investments in local markets.
"As we move forward, we will focus on what we do best — brewing great beer and earning our place in moments that matter to you," Whitworth wrote.
Whitworth also plans to listen to customers' feedback during a trip around the U.S. this summer, in connection with Budweiser's MLB Sponsorship, Axios reported.
Bud Light Loses Top Beer Title
Lager Modelo Especial overtook Bud Light in U.S. retail dollar sales for the month ending June 3, according to data from Nielsen and Bump Williams Consulting. Anheuser-Busch's market cap dived in May as Bud Light sales tumbled and the boycott persisted.
Modelo made up 8.4% of U.S. grocery, convenience and liquor store sales during the month. Bud Light sales fell to 7.3%, the Wall Street Journal reported Wednesday. Meanwhile, Bud Light U.S. retail sales fell 24% the week ending June 3 compared to the same week last year, while Modelo Especial sales jumped 12%, according to the WSJ.
Bud Light claimed the crown as the top-selling beer in the U.S. in 2001, but sales fell in recent years as Mexican import beers, seltzers, wines and spirits became more popular. Modelo is sold by Constellation Brands in the U.S. But Anheuser-Busch's subsidiary Grupo Modelo owns the international brand license.
Anheuser-Busch sold the brand to Constellation Brands in 2013 to gain regulatory approval for its Grupo Modelo acquisition.
Mark Cuban Weighs In On Bud Light Controversy
Billionaire entrepreneur Mark Cuban weighed in on the Bud Light controversy during an interview with the Post Gazette published June 11.
"There is a reason almost all the top 10 market cap companies in the U.S. can be considered 'woke.' It's good business," Cuban said. According to Cuban, people want to do business with companies that care about their customers, which is an American trait that reflects who we are as a country, the Post Gazette reported. "Most CEOs have enough experience to know to just wait out the news cycle until they go to the next one," Cuban said.
He also brushed off stock price losses as an indicator of boycott impacts. "First a dip in market cap is meaningless," Cuban said. "You have to realize that there aren't many individual owners of stocks — almost all ownership is via funds, and most trading is quantitative. So, it's not like the drop is because tens of thousands of individual holders sold their stocks."
BUD Stock
BUD stock dipped slightly Friday and shares jumped 5.5% over the week. Anheuser-Busch shares tumbled 13.2% following the Bud Light advertisement with Dylan Mulvaney, down from a March 31 high of 67.09.
STZ stock climbed 1.8% during the week and shares declined 1.3% Friday. STZ shares are trading right below the buy zone for a saucer-with-handle base after briefly topping the 248.43 buy point on Thursday.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
