In a disappointing third-quarter earnings report, Anheuser-Busch InBev, the world’s largest brewing company, reported a significant drop in U.S. revenue and sales volume, mainly due to a decline in the sales of its flagship brand Bud Light.
The company’s U.S. revenue saw a staggering 13.5% decline, while sales volume in North America fell by 17.1%. The decline in sales can be attributed to a controversial move made by the Bud Light brand in the spring, where they partnered with transgender activist Dylan Mulvaney. The partnership, which involved creating custom beer cans to mark Mulvaney’s “365 days of girlhood,” sparked a backlash and calls for a boycott of the brand.
As a result of the boycott, Bud Light’s sales began to plummet in April and continued to decline throughout the quarter. The brand also lost its title as the best-selling beer in the U.S. to Modelo Especial, which is owned by Constellation Brands.
However, AB InBev did experience growth in 80% of its markets outside North America, with strong performance in the Middle Americas and Africa. Despite this, overall sales volume saw a 3.4% decline, mostly due to the significant drop in sales in the U.S.
In an effort to revive the Bud Light brand’s image in the U.S., AB InBev recently struck a six-year deal with UFC, replacing Modelo as the official beer partner of the mixed martial arts organization. UFC CEO Dana White confirmed that the partnership with Bud Light is the largest sponsorship agreement in the organization’s history.
While the move has sparked some controversy, with many questioning the decision to partner with a brand that has faced such backlash, White explained his reasoning for the deal. He stated that for him, it was important to be aligned with a sponsor like Bud Light, which employs thousands of Americans, supports veterans, and contributes to the U.S. agriculture industry.
The UFC CEO also emphasized that the decision was not solely based on financial reasons, but rather on the company’s values and alignment with their partnership. He hopes that this deal will help revive the image of Bud Light and bring success to both the brand and the UFC.
Despite the decline in U.S. sales, AB InBev remains optimistic about the future, with plans to invest in marketing and innovation to drive growth in the market. The company also plans to expand its presence in emerging markets, where it has seen strong performance.