SUMMARY
- Despite the Bud Light boycott, Anheuser-Busch InBev, the world's largest brewer, shattered profit expectations with a 7.2% rise in global revenue.
- The controversy was sparked by a short-term sponsorship deal with transgender influencer Dylan Mulvaney, leading to a 25% sales decline for Bud Light in the US.
- An independent survey revealed that 80% of consumers remained "favorable or neutral" towards Bud Light.
When it comes to Anheuser-Busch InBev, the planet's brewing titan, they defied all odds this Thursday by shattering profit predictions during a season marked by a social media instigated Bud Light boycott on American soil.
Based in Belgium and boasting Budweiser as one of its banner brands, AB InBev reported an increase in revenue by 7.2% on the global scale. This leap was propelled by price escalations which successfully counterbalanced a 1.4% slide in sales volumes. Strikingly, the organization recorded an organic growth in its EBITDA at 5%, well surpassing the 0.4% consensus projection.
In addition to these promising figures, AB InBev remained unwavering in its full-year and mid-term profit forecasts. Only a month earlier, the company made headlines when it disclosed plans of a significant staff downsizing across various sectors.
AB InBev's stock reflected this positive trend, surging up by 3.3% at 9:07 a.m. BST. However, this success story wasn't devoid of some controversy. The Bud Light boycott was triggered by the brand's fleeting sponsorship of transgender influencer Dylan Mulvaney, who was given a bottle of Bud Light to promote in a video in early April.
This marketing tactic ignited a furor unlike any seen in recent times, leading Bud Light to lose its crown as the best-selling beer in the US to Constellation Brands' Modelo, after witnessing a slump in sales by 25%. Consequently, AB InBev's revenues in the US dipped by 10.5% in the second quarter. Adding to this, the core profit saw a 28.2% decrease. The corporation was caught in a whirlwind of criticism for its perceived lack of support for Mulvaney amid the controversy, culminating in the suspension of the marketing executive who spearheaded the partnership.
Despite these setbacks, AB InBev reported that an independent survey of 170,000 consumers showed that 80% held a "favorable or neutral" perspective towards Bud Light. Highlighted in their earnings statement, it revealed that despite Bud Light's tumble, the company still lagged in sales to retailers. This dip, however, was cushioned by double-digit growth of its mainstream portfolio in South Africa and Colombia. Meanwhile, China emerged as a promising market, recording a regional volume hike of 11% in the second quarter.
WOM Money Picks
Be a part of the winning team | 81% Success Rate.