Bud Light Brand Check-up: How the Top Beer Lost Its Crown
For more than two decades, Bud Light was the top-selling beer in U.S. stores. In April 2023, one sponsored Instagram post set off a boycott, and within weeks the brand had lost that spot to Modelo Especial. Almost a year on, we look at the sales data, AB InBev’s 2023 results and the company’s response, and at what the episode shows about mass-market brands.
Key takeaways
- Bud Light lost its place as the top-selling beer in U.S. stores to Modelo Especial in May 2023, weeks after the Dylan Mulvaney promotion set off a boycott.
- AB InBev’s U.S. sales to retailers fell 11.9% in 2023 and North America normalized EBITDA fell 21.1%, while the group’s total revenue still grew.
- Bud Light’s sales were still 29.9% below the prior year in the week ending January 20, 2024.
- After a first statement that did not explicitly address the partnership, the company changed the brand’s marketing leadership, cut about 350 jobs and went back to sports and humour in its advertising.
Download the full Bud Light Brand Check-up (PDF): vital signs, timeline, diagnosis, treatment and sources.
What happened in April 2023
On April 1, 2023, transgender influencer Dylan Mulvaney posted an Instagram video for a Bud Light March Madness promotion. The company had sent her a custom can, with her face printed on it, to mark the anniversary of her transition. Conservatives on social media called for a boycott, and three days after her post, Kid Rock posted a video of himself firing a rifle at cases of Bud Light, NPR reported.
On April 14, Anheuser-Busch CEO Brendan Whitworth said, “We never intended to be part of a discussion that divides people.” The statement did not explicitly address the partnership, NBC News reported. Transgender rights supporters also turned away from the brand, saying the company did not do enough to support Mulvaney, the Associated Press reported.
How far sales fell
In the week ending April 15, Bud Light’s sales were 17% lower than in the same week of 2022, according to Nielsen data analyzed by Bump Williams Consulting. In the four weeks ending June 3, Bud Light’s dollar sales were down 24.4%, and Modelo Especial held 8.4% of U.S. retail beer sales to Bud Light’s 7.3%. Modelo had also outsold Bud Light in May, ending a run at the top that had lasted more than two decades.
The gap held for the year. Circana data reported by Beer Insights put Modelo Especial’s 2023 dollar sales at $4.025 billion, up 16.5% and $240 million ahead of Bud Light. In the week ending January 20, 2024, Bud Light’s sales were still down 29.9% from a year earlier, according to Bump Williams Consulting’s analysis of NielsenIQ data.
What the 2023 results show
AB InBev reported its 2023 results on February 29, 2024. Group revenue grew 7.8% organically to US$59.38 billion. North America went the other way: revenue fell 8.3% organically to US$15.07 billion, volume fell 12.1% and normalized EBITDA fell 21.1%. In the United States, revenue fell 9.5% and sales to retailers fell 11.9%. The company said fourth-quarter U.S. sales to retailers fell 12.1%, “primarily due to the volume decline of Bud Light,” and that its U.S. beer market share had seen “continued gradual improvement since May through the end of December.”
AB InBev’s U.S.-listed shares closed at US$60.35 on March 26, 2024, about 9.6% below the US$66.73 close on March 31, 2023, the last trading day before the post. The share price reflects the whole group, not one brand.
How the company responded
- Bud Light’s vice president of marketing, Alissa Heinerscheid, was placed on leave, and Todd Allen took over from her, CNN reported.
- In July 2023, Anheuser-Busch announced about 350 layoffs, which it said affected less than 2% of its U.S. employees and did not include brewery staff, drivers or field salespeople.
- It invested in measures to support its wholesalers.
- In October 2023, Bud Light signed a multiyear deal to become the official beer partner of UFC in the U.S. from January 1, 2024.
- For the 2024 Super Bowl, it went back to comedy with a 60-second spot, “Easy Night Out,” featuring Post Malone, Peyton Manning and UFC CEO Dana White.
“We wanted to get back to the humor the brand has been known for,” Allen told CNN.
Our diagnosis
Light lager is a habit purchase with close substitutes on the same shelf, so switching cost buyers almost nothing. A sponsored post on one influencer’s account reached the whole market, and the CEO’s statement came about two weeks later and did not explicitly address the partnership. A brand that has been the default for decades can mistake habit for loyalty, the same error teams make when they credit paid ads for branded searches that would have happened anyway.
What growing companies can learn
Any brand that sells to a broad public will meet a moment when part of its audience objects. Plan for it before launch: decide who speaks, how fast and what the company will say. In a crisis, read sales weekly, not quarterly. And test whether customers choose you or simply default to you. A yearly marketing audit is a good place to ask that question.
This check-up uses public information available on March 26, 2024. It is brand and marketing analysis, not investment advice.
Find out where your marketing is bleeding.
Brand Doctor is based in Vancouver and offers a free marketing diagnosis to businesses across Canada, in person or remotely. You leave knowing what’s holding growth back and what to fix first.
