Almost 11 months ago we wrote in this newsletter that AB InBev executives needn’t worry too much about the backlash against Bud Light because brand boycotts ‘usually bark worse than they bite’.
As it turned out, AB InBev’s executives were right to be worried. In fact, they probably were not nearly worried enough.
Last week, the company presented its full-year financial results to investors, giving a clearer picture of what the fallout from Bud Light’s marketing partnership with transgender influencer Dylan Mulvaney cost.
Overall, 2023 was by no means a bad year for the Belgian brewing conglomerate, which posted record revenue of $59.38bn. But it was made clear that it would have been a far better one without its accidental foray into the culture wars, with CEO Michel Doukeris noting at the outset of the earnings call that, ‘our full growth potential was constrained by the performance of our US business.’
AB InBev did not state the exact financial toll that the Bud Light brouhaha extracted from the company, but organic revenue in North America declined $1.38bn year-on-year (or -8.3%), and CNN has reported that this is probably the best indicator.
AB InBev is now busy clawing back share of the beer market in the US, according to Doukeris, although ‘not at the fast pace that we were expecting.’
Last year, Doukeris said in an earnings call that AB InBev’s share of the beer market in the US declined by 5.2 percentage points in the second quarter (to 36.9%) in the wake of the Bud Light backlash.
On Thursday, he revealed that February’s market share figures showed the company had managed to close the deficit from its May peak by 1.2 percentage points, and that it continues to make up ground at a rate of 0.1 or 0.2 percentage points every three or four weeks.
‘This whole event from April to the end of the year caused trouble not only for Bud Light but for [AB InBev] as a whole,’ concluded Doukeris.
That might be underselling it. The effect that right-wing outrage had on AB InBev’s bottom line had repercussions throughout the marketing industry.
When we polled over 100 industry executives for our 2024 Radar report, we asked them whether the fallout from Bud Light had made them think differently about purposeful marketing, and 25.2% said it was ‘a real wake-up call to dial it down.’
This is by no means a consensus — although it does also depend on how the 74.8% who said it hadn’t changed their attitudes felt about purposeful marketing to begin with — but it is significant.
And while you could not with any degree of certainty pin the industry’s recent retreat from purpose as an unassailable orthodoxy on Bud Light, you have to admit that the timings look a bit suspicious.
But more to the point, it makes our conclusion from last year’s newsletter that ‘there's a decent chance the only thing most people will remember from this episode is the name 'Bud Light’ feel like a bit of a clanger (even if precedent was on our side).
Now we know how former Time Warner CEO Jeffrey Bewkes feels when he remembers his quip that worrying about Netflix was like worrying the Albanian army would take over the world.
