If Bud Light sales continue to lag, the brand risks losing shelf space at major retailers to rivals and ‘locking in’ a lower market share, a former executive claims. from Anheuser-Busch.
In recent weeks, sales of Bud Light have fallen by around a quarter from a year ago, as the brand faces a conservative backlash following a marketing deal in April with the transgender influencer Dylan Mulvaney.
Anson Frericks, the former U.S. president of sales and distribution for St. Louis-based Anheuser-Busch, said retailers such as Walmart and Kroger typically “reset” their storage space allocations in the spring and in the fall, based on sales data.
For the fall reset in September, “they usually take the sales data from April, May, June, July, and then based on that data during that period, they will reallocate the space on the shelves” , he told DailyMail.com in a phone interview. SATURDAY.
If Bud Light sales continue to slump, “that storage space will go to Miller Lite, Coors Light, Yuengling and some of the other brands that have taken a stake in it,” he said.
Anson Frericks, a former Anheuser-Bush executive, argued that if Bud Light sales continued to lag, the brand risked losing shelf space at major retailers to rivals.
For the week ended May 20, Bud Light sales were down 25.7% from the same week a year ago
“These brands will have a better chance of succeeding in the longer term because they have more storage space, they have more inventory, they have more inventory in stock, and they have more availability for consumers,” a- he explained.
“It then locks in almost permanently as the new normal of where their sales will be and their share in the beer category,” Frericks predicted of the impact on Bud Light.
Frericks said the “vast majority” of beer sales, around 80-90%, take place at brick-and-mortar outlets, as opposed to sales in bars and restaurants.
Frericks, who co-founded Strive Asset Management with Republican presidential candidate Vivek Ramaswamy after leaving AB last year, was harshly critical of his former employer’s handling of Mulvaney’s backlash.
“Anheuser-Bush needs to come up with a strategy, it needs to make a statement about who its customers are and who they’re going to serve now, and try to win back those customers now in June and July, because by then it’s August, September is too late,” he said.
But Bump Williams, whose namesake consultancy analyzes the alcohol industry, expressed skepticism that Bud Light was facing an impending reduction in storage space at major retailers.
He noted that in sales since the start of 2023, Bud Light is still the top-selling beer in the country, although in recent weeks it has fallen below Modelo Especial.
“Bud Light COULD lose shelf space due to lost sales, but I would find it hard to believe that retailers would reduce the shelf space of the number one selling brand in the country today on a YTD basis,” Williams said in an email to DailyMail. .com on Saturday.
“If at the end of 2023 we see Bud Light falling to the #2 selling brand, they will more than likely retain their fair share of space,” he added.
AB InBev shares have lost more than 17% since the start of the controversy on April 1
The latest data points to a hardening of recent sales trends, after Bud Light’s April Fool’s Day promotion with Mulvaney (above) sparked anti-LGBTQ backlash and boycott threats.
Anheuser-Bush did not immediately respond to a request for comment outside of normal business hours.
For the week ended May 20, Bud Light sales were down 25.7% from the same week a year ago, while closest competitor Model Especial saw sales jump 9 .2%, according to data compiled by Williams’ firm.
“While Bud Light loses week after week, Modelo Especial wins week after week and now Modelo is outpacing Bud Light nationally on all business channels combined,” said Bump Williams, who runs the consultancy, in New York. Post.
“If this continues, Modelo will overtake Bud Light for the year,” he added.
Modelo was the second-largest beer in the United States last year, posting $3.8 billion in off-premises sales, compared to $4.8 billion for Bud Light, according to data from Bump Williams.
Bud Light and Modelo are owned by Anheuser-Busch’s parent company, AB InBev.
But under an anti-trust settlement, Modelo’s US sales are controlled by rival Constellation Group and do not count against AB InBev’s global volumes.
The latest data points to a hardening of recent sales trends, after Bud Light’s April Fool’s Day promotion with Mulvaney sparked anti-LGBTQ backlash and boycott threats.
In the four weeks to May 20, Bud Light sales fell 24.3% from a year ago, while Modelo sales increased 8%.
“It’s a monumental decline,” Williams told the Post. “Modelo has passed Bud Light for the first time since its launch in 1982.”
Cans of Bud Light beer are seen at a liquor store in Buffalo Grove, Illinois in late April. In recent weeks, sales of Bud Light are down about a quarter from a year ago
After Bud Light, Modelo Especial was the second beer in the United States last year
In a recent note, JPMorgan analysts said they expected AB InBev’s U.S. earnings before interest and tax to fall 26% this year, on a 12% decline in volume and 10% in sales.
“We believe there is a subset of American consumers who will not be drinking Bud Light for the foreseeable future,” the memo reads.
Bud Light’s parent company said earlier this month it would triple its US marketing spending this summer as it tries to boost struggling sales.
Controversy erupted on April 1, when Mulvaney posted a video of herself opening a Bud Light to her Instagram page.
She showed off a can personalized with her face that Bud Light sent her – one of the many corporate gifts she receives and promotes to her millions of followers.
Three days after Mulvaney’s post, Kid Rock posted a video of himself spinning cases of Bud Light, and country music stars John Rich and Travis Tritt publicly denounced the brand.
Within weeks, two Anheuser-Busch marketing executives went on leave. It is not known if they have yet returned to work.
After Anheuser-Busch tried to distance itself from the Mulvaney promotion, Bud Light also faced backlash, with pro-LGBTQ groups accusing the company of ditching the transgender influencer.
Still, Anheuser-Busch InBev CEO Michel Doukeris played down the impact of the backlash, saying Bud Light’s drop in U.S. sales in the first three weeks of April was just 1% of InBev’s global volumes.
“We believe we have the experience, the resources and the partners to handle this,” Doukeris said on a conference call with investors earlier this month.