AB InBev, the global leader in the beer market, has reported a significant decline in its US sales, with a staggering 13.5% drop in the latest quarter. This decline can be attributed to an ongoing boycott of Bud Light, the company's flagship brand, which has continued to create turbulence for the company. The United States serves as AB InBev's largest market, and the company appears to be grappling with the fallout from a controversial marketing campaign in April that featured transgender influencer Dylan Mulvaney (inside.beer, 14.4.2023).
This challenging period has seen Bud Light lose its long-held position as the top-selling beer in the US to the Mexican import, Modelo, in the summer (inside.beer, 9.6.2023).
Circana's data shows that the Bud Light brand has consistently lost nearly 3 percentage points of total beer dollar share over the last four, 13, and 26 weeks. Notably, there was a substantial 2.95-point decline in the last four weeks, marking the most significant decrease in any four-week period throughout the year.
In an attempt to reassure investors and stakeholders, AB InBev's CEO, Michel Doukeris, expressed confidence in Bud Light's ability to recover its brand image during an earnings call in August. However, many experts in the beer industry believe that a core group of Bud Light's loyal customers may have permanently abandoned the brand, raising doubts about its future prospects.
The downturn in sales is not limited to Bud Light alone. AB InBev's entire U.S. portfolio has been consistently losing nearly 5 percentage points of total beer dollar share over the past 26 weeks. This widespread decline indicates that the company is facing broader challenges in the American market.
While the US experienced a sharp drop in sales, other global regions, including the Middle East, Africa, and the Asia-Pacific, witnessed growth. Europe, however, presented a different picture, with AB InBev reporting "soft" sales in the region.
Despite the challenges in the US market, AB InBev's overall revenues increased by 4% to reach $15.6 billion. However, the company also reported a substantial 29.3% decrease in EBITDA. Notably, this marks the second consecutive quarter in which the company has seen a decline in sales in the United States, raising concerns about its ability to regain its footing in this crucial market.