Bud Light-brewer rebounds from US culture war over transgender ad

Promotional video by transgender social media personality Dylan Mulvaney sparked calls for boycott by right-wing groups which in turn caused backlash by Mulvaney supporters and a drop in Bud Light sale volumes

Dylan Mulvaney said she felt abandoned by Bud Light after facing 'more bullying and transphobia than I could have ever imagined'. 

Anheuser-Busch's profit growth beat analysts’ expectations as a slump in the US sparked by a Bud Light marketing fiasco was offset by strength in other key markets.

Earnings gained more than 20% in Brazil, China and Colombia in the second quarter, counterbalancing a 28% plunge in the US. Global sales growth was just ahead of estimates, and the company maintained its 2023 profit guidance. The shares rose as much as 5% in Thursday's trading session. 

“We consider this to be a better result than had been feared,” said Investec analyst Alicia Forry in a research note. “The unchanged full-year outlook is also positive,” she said.

The world’s biggest brewer stepped into a culture-wars controversy after transgender social media personality Dylan Mulvaney featured in a Bud Light promotional video. 

Calls for a boycott from US right-wing conservatives led the company to cut ties with the influencer, who was subjected to online threats and hate speech. That in turn led to a consumer backlash from supporters of Mr Mulvaney, causing a drop in Bud Light’s US sales volumes that some analysts said may be permanent. 

Earnings rose 5% in the second quarter on an adjusted basis, double the rate analysts expected. The brewer increased sales of its global brands Budweiser, Stella Artois and Corona by 18% outside of their home markets.

AB InBev’s market share in the US plummeted in April but the brewer said it was stable between the last week of April through to the end of June. Two-thirds of the profit decline in the US was due to the drop in market share, and the rest came from a loss in productivity, increased marketing spending and support for wholesalers amid the crisis, the company said. 

Rivals have been benefiting from AB InBev’s misfortune. In June, Constellation Brands reported revenue that beat analysts’ estimates after its Modelo brand kicked Bud Light off the rank as the bestselling US beer. Miller Lite maker Molson Coors Beverage reported record sales.

North America was the source of about a third of AB InBev’s profit last year, according to Bloomberg Intelligence analyst Duncan Fox.

The brewer put marketing executives involved in the Bud Light matter on leave and is cutting several hundred jobs in the US, the Wall Street Journal has reported. The company has also been tripling its media spending on the brand this summer and is sponsoring a series of country music concerts.

AB InBev reiterated its forecast that earnings will probably rise 4% to 8%. Analysts are expecting a gain of 5.2%. 

Bloomberg Intelligence said AB InBev’s strategy of trading up consumers to premium offerings puts the emphasis on the price mix, but volume is key to brewery efficiency, so the lack of growth in all regions, except Asia, which recovered from lockdowns, could become a concern. 

• Bloomberg