At the Sawyer Ice House bar on the outskirts of downtown Houston on Thursday evening, the after-work crowd spilled in to watch the local Astros baseball team take on the New York Yankees. As the home team fought to an ultimate 3-4 defeat, pints of Miller Lite and Shiner Bock flowed freely; the Bud Light tap was left untouched.
“We don’t really sell it anymore,” said Will, the bartender. “People just aren’t buying it.”
Across the US, Bud Light sales have plummeted since April after a furious conservative backlash to the brand’s collaboration with transgender TikTok personality Dylan Mulvaney. Kid Rock, the rap-rock star, filmed himself shooting cases of the beer. Ron DeSantis, the Republican presidential contender, told customers at the bar of a Veterans of Foreign Wars post in Nevada he would “serve them anything — except Bud Light. I can’t do that.”
On Thursday, parent company Anheuser-Busch InBev revealed the financial toll: the Belgium-based group said its US revenues had fallen by 10.5 per cent in the second quarter.
But the culture war attacks have not just shaken AB InBev, they have also changed the fortunes of rivals and accelerated trends that are reshaping the $115bn US beer industry. The popularity of craft beers, imported beers and other drinks was already eroding Bud’s dominance at a time of sluggish beer sales by volume overall.
Chicago-headquartered Molson Coors said this week that its US volumes rose 8.7 per cent in the second quarter as combined sales of its Coors Light and Miller Lite brands topped those of Bud Light by 50 per cent. Modelo Especial, the Mexican beer distributed in the US by Constellation Brands, knocked Bud Light off its perch as the country’s best-selling beer in May.
“We believed in the next two or three years, we would have overtaken Bud Light,” said Jim Sabia, Constellation’s executive vice-president who oversees beer. “It happened quicker than we thought.”
Modelo Especial had not eclipsed Bud Light because its drinkers were switching to Modelo, he added, instead the company benefited from the retail and promotional space Bud Light left empty.
Bud Light’s “marketing issue” had accelerated an existing decline in mass-market domestic beers, analysts heard this week from Dan Fisher, chief executive of Ball Corporation, which makes cans for AB InBev and other brewers.
The 8.5 per cent hit it experienced to US can volumes in the past quarter was part of a broader story of decline as craft beers, imported beers and other drinks encroached on the supremacy of big brands.
As total US beer volumes shrank 3 per cent last year, craft beers held steady and imports grew 2.8 per cent, according to the Brewers Association, which represents independent and craft brewers.
At Ball’s last quarter, volumes were up 11 per cent for imported beer and 41 per cent for ready-to-drink cocktails. Spirits have been gaining market share for 13 years and overtook beer in 2022, according to the Distilled Spirits Council of the United States.
“The US [beer] industry in 2023 has been softer than expected,” Gavin Hattersley, Molson Coors chief executive, told analysts. While other factors including unfavourable weather had played a part, “we do think that some of the bigger drivers of these trends are lifestyle choices and some buyers shifting to other categories.”
Reporting interim results this week, the world’s second-largest brewer Heineken said the volume of beer it sold in the Americas declined 1.5 per cent compared to last year due to the “soft” market in the US and Mexico, while in Europe volumes fell 4.7 per cent, which the brewer said was a result of price rises.
Bud Light has been battling another challenge: it lags both Corona and Modelo among beers favoured by Gen Z consumers, a Cowen survey found last year. The Mulvaney promotion followed a decision by marketers that, having spent decades advertising it to attract young men, its appeal needed to be broadened.
Bud Light’s vice-president of marketing, Alissa Heinerscheid, who has gone on leave since the controversy broke, explained the case for more “truly inclusive” marketing on a podcast in March. She said the brand had been in decline “for a really long time,” its campaigns had been known for “fratty, kind of out-of-touch humour”, and if it could not attract young drinkers, “there will be no future for Bud Light”.
Bud Light has since introduced a new ad campaign for summer, pitching the beer as “easy to enjoy”.
“They’ve been spending a lot of money behind Bud Light, but the tone of the advertising is still very middle America; they’re not trying to radically reposition the brand,” said Bernstein analyst Trevor Stirling.
Analysts doubt that the drinkers AB InBev alienated with the Mulvaney tie-in will return. Bernstein research estimated that approximately 50 per cent of Bud Light’s share loss, and 50 per cent of Coors Light and Miller Lite’s share gain will be permanent.
“ABI is truly stuck between a rock and a hard place,” they wrote. While right-leaning consumers are frustrated by the lack of apology from the brewer, left-leaning consumers are calling it out for not supporting Mulvaney in the face of abusive public comments.
This week, AB InBev chief executive Michel Doukeris assured analysts and investors that support for the company’s key brand was still solid. It had surveyed 170,000 US consumers and found that 80 per cent had a “favourable or neutral” view towards Bud Light, he said.
“They simply point [out] that they want to enjoy their beer without a debate,” Doukeris told the FT. “They want our brands to focus on what we do best — which is beer — and they want Bud Light to engage with topics relevant to all consumers, like music and sport.”
As part of AB InBev’s efforts to put that debate behind it, a Bud Light promotional crew recently visited Houston’s Sawyer Ice House to hand out free beers, its bartender recalls. Patrons rushed to grab the freebies — but none of them wanted their picture taken.