Anheuser-Busch, the parent company of Bud Light, is believed to have experienced a significant decrease in sales revenue, with estimates projecting over a billion dollar loss. This steep descent is reportedly linked to the company’s collaboration with Dylan Mulvaney, a trans person who quickly became a divisive figure. Analysis of company data unveiled a plunge in the organic revenue of Anheuser-Busch by $1.4 billion in North America in the past year, as reported by reliable sources.
The drop in sales revenue has been primarily attributed to the controversial marketing alliance with Mulvaney. Although perceived as strong in other global markets, Anheuser-Busch’s US business performance appears to have taken a hit. In a recent company report, the narrative touched on a constrained growth situation largely due to the underperformance of its American sector.
The report dedicated significant focus to Bud Light, revealing a 17.3% decline in the beer’s revenue with sales to retailers (STRs) taking a 12.1% hit on account of volume decrease. The report also indicated a drop in sales to wholesalers (STWs) by 16.1%. Interestingly, stagnation in deliveries was found to be more notable compared to stock depletion towards the year-end.
The beverage conglomerate recognized a lukewarm resurgence in its American beer sales. Notably, this recovery has been slow-paced. The FY23 beer sector reportedly holds its own, with an upward trend in its volumes, and beer actually gaining a greater share in the total alcohol value across off-premise outlets, as per Circana, a leading industry data analysis tool.
The report conceded to a gradual improvement in Anheuser-Busch’s beer market share from May last year until December. Unfortunately, while their flagship brands performed below expectations, ‘above core beer megabrands’ logged growth throughout the year. This indicates that not all aspects of Anheuser-Busch’s operations were hampered by the decision to collaborate with Mulvaney.
The sales downturn of Bud Light significantly coincided with the company’s decision to partner with Mulvaney. After the partnership, there was a noteworthy right-leaning call for the company to tender an apology. The fallout spread throughout Anheuser-Busch, leading to a restructuring exercise that reportedly saw hundreds of staffers being laid off and a dismantling of their top marketing team.
Embedded in this backlash against the partnership with Mulvaney was Bud Light’s involvement in a very public legal challenge. The dispute centered on whether the promotion of alcohol, including beer, by Mulvaney met the standards set by the alcohol industry, given his popularity amongst younger audiences on social media.
Questions began to arise, particularly around whether these promotional efforts were inadvertently targeting underage consumers. Not only are such marketing strategies generally frowned upon, but they are in direct violation of the guidelines and ethical norms of the beverage industry, creating potential legal and reputational issues for the company.
Intriguingly, two prominent members of the Senate Commerce Committee, U.S. Senators Ted Cruz, from Texas, and Marsha Blackburn, from Tennessee submitted a formal request on May 17, 2023. This letter solicited a thorough examination by the self-regulating entity within the beer industry, the Beer Institute, investigating whether Bud Light was indeed indirectly marketing to minors through its association with Mulvaney.
Following this, there were comprehensive revisions of the beer industry’s Advertising and Marketing Code. Updated policies for social media influencers were also put in place. These changes reflected a larger concern in the beer industry about the responsible use of social media influencers for marketing purposes.
Of the new norms outlined, the guidelines now prescribe that social media advertisements can only be placed where a minimum of 73.8% of the audience is of drinking age – a regulation that echoes the standards required for conventional adverts. Additionally, the guidelines now mandated the leveraging of ‘age-gating measures’ if such features are available.
All these updates point to an increasing realization within the industry about the need for responsible advertising, and the enforcement of stricter measures to ensure that content is accessed only by the appropriate age demographic. This drives the industry towards a more ethical and responsible marketing approach which, in turn, protects the image of the industry and its constituents.
The experience of Anheuser-Busch in its partnership with Dylan Mulvaney demonstrates how critical it is for businesses to take into account the perceptions and expectations of their key target demographic. This is especially the case when making decisions about marketing and partnerships, as these have a direct bearing on the brand image and financial health.
While the company hoped to tap into new demographics and customer bases with the partnership, the backlash demonstrates that a strategic misstep in understanding the existing customer base can have a sizable impact on a brand’s image and its financial bottom line.
Moving forward, the lessons from Anheuser-Busch’s experience serve as a wake-up call for the alcoholic beverage industry. The situation highlights the need for continued vigilance and adaptability in marketing efforts. It reminds us that attentive consumer and market analysis are crucial for aligning marketing strategies with consumer expectations and industry standards.