Bud Light, produced by Anheuser-Busch, is showcased on a store shelf in Miami, Florida, on July 27, 2023.
Photo by Joe Raedle from Getty Images
Anheuser-Busch InBev, the largest brewer in the world, greatly exceeded profit expectations in the second quarter despite a boycott of its popular Bud Light beer in the U.S., fueled by social media.
The Belgium-based owner of Budweiser reported a 7.2% increase in global revenue for the second quarter, as higher prices compensated for a 1.4% decline in volumes. The company also achieved 5% organic growth in EBITDA, surpassing the consensus forecast of 0.4%.
AB InBev reaffirmed its profit outlook for the full year and the medium-term, while also announcing recent job cuts across various departments.
At 2:08 p.m. CEST (8:08 a.m. ET), the share price of AB InBev rose by 3.6%.
The Bud Light boycott emerged in response to the brand’s association with transgender influencer Dylan Mulvaney in April. Despite the controversy, AB InBev’s earnings statement revealed that 80% of 170,000 surveyed consumers had a positive or neutral perception of the Bud Light brand.
In the wake of the partnership, Bud Light lost its position as the top-selling beer in the United States to Constellation Brands’ Modelo, resulting in a 25% decline in sales. AB InBev’s U.S. revenues fell by 10.5% in the second quarter, with core profit dropping by 28.2%.
The company faced criticism for its lack of support for Mulvaney, which garnered political attention and reportedly led to the marketing executive responsible for the partnership taking a leave of absence.
Zak Stambor, senior analyst at Insider Intelligence, remarked that AB InBev “simultaneously alienated both conservatives and progressives” and emphasized the significance of marketing for a brand that is “not fundamentally different from other light lagers produced on a large scale.”
AB InBev did not explicitly mention the Bud Light boycott in its earnings statement.
The earnings report released on Thursday highlighted a decline in Bud Light sales, indicating that AB InBev underperformed in terms of sales to retailers. However, this drop was partially offset by double-digit growth in the “mainstream portfolio” of the company in South Africa and Colombia.
China also proved to be a strong market for AB InBev, with regional volumes increasing by 11% in the second quarter.
Analysts at the Royal Bank of Canada expressed pleasant surprise at the earnings results, but predicted a 1.1% organic volume decline for the year, assuming no recovery in Bud Light sales.
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Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
