Since the launch of an ad campaign featuring transgender activist and TikTok celebrity Dylan Mulvaney in April, Bud Light has been experiencing a sharp decline in sales. The controversial campaign received substantial backlash, impacting the beer company’s reputation and resulting in a continued downward trajectory for their sales figures.
As a matter of fact, Bud Light is not even among the top 10 most popular beers in the US, marking a sharp decline given that the brand was once the country’s beloved beermaker.
To be more specific, the company is currently the 14th most popular beer brand in the US, down from 9th in 2022, according to Fox News on July 10.
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Modelo dethrones Bud Light as US top-selling beer
Namely, Modelo Especial, a brewing firm owned by Constellation Brands, was the top-selling beer brand in the US for the second straight month in June after putting an end to Bud Light’s dominance in May.
According to consulting firm Bump Williams, Modelo accounted for 8.7% of overall retail beer sales during the four weeks ended July 1, compared to Bud Light’s 7%.
Bud Light, owned by the world’s largest brewing company Anheuser-Busch (NYSE: BUD), was the top-selling beer brand in 2022 and in the first four months of this year.
However, the company started facing intense backlash over its social media ads involving activist Dylan Mulvaney, leading to strong pressure on its sales. Notably, sales of Bud Light and Budweiser plunged 28% and 11.7% year-over-year, respectively, while Modelo’s sales climbed 8.5%.
BUD stock price analysis
The backlash against Bud Light substantially weighed on Anheuser’s stock price as investors jumped ship to avoid potential losses. During the month of May, BUD’s price plummeted from $65.90 to $53.40, representing a decline of almost 20%.
However, since then, the company’s share price has avoided further dips and has remained relatively flat in recent weeks.
At the time of writing on July 11, Bud Light’s shares were standing at $55.58, up around 0.1% on the day.
Over the past 5 days, the stock lost roughly 2.4% of its value, while slightly advancing on a monthly chart by 0.8%.
Year-to-date, BUD is down more than 7.8%.
The price action has returned to test the broken resistance line, which now acts as support at around $55. A bounce here would likely see bulls push the price action to 2023 highs below the $70 mark.
On the downside, a break of this important trend line facilitates the accelerated dip toward the supporting trend line at around $48.
The future trajectory of BUD Light’s stock price hinges on several factors, including the company’s ability to improve its sales performance and the extent to which the backlash against the company subsides. The coming months will likely serve as a critical period to determine the impact of these variables on the stock’s movement.
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