Michel Dimitrios Doukeris, Anheuser-Busch InBev’s (BUD) CEO, took a few minutes on Thursday’s earnings call with investors to address the backlash Bud Light, and its U.S. business, is facing over an Instagram post that it sponsored with transgender influencer and TikTok personality Dylan Mulvaney that sparked a boycott among anti-trans consumers.
While the post by Mulvaney was during March Madness four weeks ago, the company saw sales lower throughout April following an April 3 video from country singer Kid Rock, prompting a wider-spread boycott among U.S. consumers.
During the company’s earnings call today, Doukeris said, “With respect to the current situation and the impact of Bud Light sales, it is too early to have a full view. The Bud Light volume decline in the U.S. over the first 3 weeks of April, as publicly reported, would represent around 1% of our overall global volumes for that period.”
Doukeris went on to say that it was “one post, not a formal campaign or advertisement” with Mulvaney, who has 1.8 million followers on Instagram.
During the week of April 15, 2023, case sales of Bud Light to retailers dropped 21.1% and impacted other portions of its U.S portfolio as well, according to Bump Williams Consulting which used Nielsen data. Sales of Budweiser cases dropped 10.7%. Meanwhile, Coors Light saw a 10.6% increase in sales and Miller Lite saw an even higher pickup in sales, up 11.5%.
Despite the controversy, AB InBev’s full year EBITDA growth outlook remains “unchanged” leaning on its global presence. “Our global footprint has enabled us to successfully navigate different types of challenges, such as temporary ban on beer sales in certain countries and the most long shutdown of bars and restaurants across the globes,” Doukeris said.
Doukeris noted that the controversy has taken a toll on its “people,” including delivery drivers, sales representatives, wholesalers, and servers. Doukeris said said the company is providing “direct financial support to the frontline teams that work for us and our wholesalers.”
As for a turnaround, Doukeris said the company has “significantly increased” investments in its U.S. brands this summer, “including tripling our medium spend over the summer” as it aims to focus on sports, music and connecting with consumers “what beer needs to do,” Doukeris said.
Despite all this, shares of Anheuser-Busch InBev are seeing a pop Thursday, up 4% boosting shares year-to-date, now up 10%.
Earlier this week Molson Coors (TAP) CEO Gavin Hattersley addressed the impact when Goldman Sachs analyst Bonnie Herzog asked how the company plans to maintain “these short-term gains” and if it is “planning on stepping up reinvestments” following “the last few weeks from Bud Light pressures.”
Hattersley said, “We haven’t factored any of the trends that we’ve seen in April into our guidance. We really, and I’m sure nobody has any idea how long these are going to continue, so they’re not factored into our guidance at this point…We didn’t raise our guidance at this time for those reasons.”
Molson Coors beat estimates in its latest quarterly results but reiterated its 2023 guidance of low single-digit sales growth compared to 2022. Both Coors Light and Miller Lite in the U.S. saw double-digit revenue growth. Year-to-date shares of Molson Coors are up 26.7%.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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Source: finance.yahoo.com