While its overall business has remained strong, Anheuser-Busch InBev continues to take big hits in the US.
The company has not recovered from the boycotts called after its decision to partner with transgender social media influencer Dylan Mulvaney. The boycotts, started when Kid Rock posted a video on social media in which he shot cases of beer, cost Bud Light about 25% of its sales.
The company has shown no signs that it can return that brand to its former prominence.
Related: After a surprise closure, a popular retailer sees a big return
Anheuser-Busch InBev (OUTBREAK) saw a 9.5% revenue decline in the fourth quarter, while sales volume to wholesalers fell 12.7%. During the company's fourth-quarter earnings call, CEO Michel Doukeris called those declines “primarily due to the decline in Bud Light volume.”
Last year “was a challenging year for our business in the United States,” he said.
It may be a bit of a soft sell, but Doukeris knows that talking about Bud Light during an earnings call (or any other time) revives the news, essentially reminding aggrieved customers to boycott. He said any space Bud Light has lost on shelves has generally been taken up by Anheuser-Busch InBev brands.
“What we lost is in Bud Light, and we have recovered across the portfolio with Michelob Ultra, Busch Light, Cutwater, Nutrl, Corona, Stella all gaining shelf share,” he said. aggregate.
Image source: Shutterstock
Anheuser-Busch InBev loses court case
Anheuser-Busch InBev owns Grupo Modelo, but Constellation Brands (STZ) has rights to its popular Corona brand for beer in the US.
Constellation has also been selling hard-seltzer drinks under the Modelo and Corona brands, which were the subject of a lawsuit by Anheuser-Busch InBev. In that lawsuit, BUD alleged that Constellation had no rights to do that.
A 2023 court decision ruled in favor of Constellation Brands and that decision has been upheld by the U.S. Court of Appeals for the Second Circuit.
“AB InBev's Mexican arm, Grupo Modelo, filed the lawsuit against Constellation accusing the company of violating a trademark licensing agreement when it launched Corona Hard Seltzer.” fooddiving reported.
“The lawsuit said the agreement only allowed Constellation to use Corona in the U.S. for beer. (AB InBev owns the rights to Corona in Mexico and the rest of the world.) Constellation responded that the licensing agreement allowed it to sell other alcoholic beverages. “
Essentially, the court ruled that the agreement between the two companies allowed Constellation to sell products like Modelo Ranch Water and Corona Hard Seltzer in the US.
At the heart of the matter was what actually constitutes beer. The appeals court said both companies had plausible definitions and that Constellation's definition allowed the company to produce Corona Hard Seltzer and Modelo Ranch Water.
Anheuser-Busch InBev continues to disagree with that definition.
“When Grupo Modelo granted Constellation a license to sell those beer brands in the US, Grupo Modelo never accepted that Constellation had the right to use our iconic Corona and Modelo brands for sugar-based carbonated beverages that are clearly not beers. Mexican,” said one company. the spokesperson said BrewBound.
Anheuser-Busch InBev sees growth for beer
While it faces some headwinds in the United States, Anheuser-Busch InBev remains confident its beer brands will drive growth.
“And going forward, beer is expected to continue this strength,” Doukeris said. “Led by the strong performance of our global megabrands, our revenue continues to grow this year, reaching a new all-time high for a $59.4 billion company.
“We continue to invest in our category expansion levers and mega brands, building meaningful connections with our consumers.”
For Bud Light, that has meant avoiding doing anything even vaguely controversial and relying on its traditional marketing and advertising strategies.
“We are expanding our long-standing partnership with Folds of Honor, including joining the NFL and Bud Light to also support first responders,” the executive said.
“We continue to invest in our mega brands and mega platforms, such as sports and music that all consumers love, including the NFL, NBA, Lollapalooza, as well as new investments with the VMA, UFC, Copa América and Team USA for the Games Olympic and Paralympic. “.
