Once a dominant force in the US beer market, Bud Light suffered a sharp decline in sales after it launched a controversial marketing campaign featuring Dylan Mulvaney earlier this year, which triggered widespread backlash and boycotts.
But that may not be the end of troubles for Bud Light and the share price of its parent company, Anheuser-Busch InBev (NYSE: BUD).
Notably, Bud Light distributors no longer expect sales to recover because they have given up on reclaiming the dissatisfied customers, the New York Post reported on July 31.
Bud Light’s decline ‘could last for a while’
Namely, wholesalers have made peace with the fact that some of the customers are lost for good and that they should focus on attracting fresh consumers.
“Consumers have made a choice. They have left [Bud Light] and that’s how it’s going to be. I don’t envision a big percentage of them coming back.”– said an executive at a Texas-based beer distributor.
David Steinmann, the executive editor of Beer Marketer’s Insights said that there are growing risks that the ongoing Bud Light rate decline “could last for a while and the distributors are worried about losing those drinkers to other similar brands.”
The sales decline
Since launching its ad campaign with activist influencer Dylan Mulvaney, Bud Light has been embroiled in controversy as more conservative consumers started boycotting the once top-selling US brewer, forcing it to initiate hiring freezes and layoffs.
However, the worst consequence of the Mulvaney fiasco is that it triggered a steep plunge in Bud Light sales, which have dropped by over 25% since then.
In the month that ended on July 15, the company’s US sales fell 26.5%, while Modelo Especial’s climbed 13.5%. The significant sales impact pushed Bud Light’s market share to 6.8% in that period, while Modelo held an 8.7% share, according to the reports.
What does this mean for Bud Light stock?
At the time of publication, US-listed shares of Anheuser-Busch InBev were down 2.65% at $57.30.
Over the past week, the stock lost 1.44% of its value, while gaining 1.5% on a monthly basis.
Year-to-date, BUD is down 5%, with the bulk of its declines coming in May, right after the Mulvaney fiasco.
Despite recent attempts to mitigate risks, Bud Light’s stock remains vulnerable due to ongoing sales decline and lingering customer apprehension.
While the company strives to rebuild trust, potential uncertainties continue to pose challenges to its future stock market performance. Having said that, investors should exercise caution as Bud Light navigates through this critical period.
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