Anheuser-Busch earnings to slide 26% amid boycott over Dylan Mulvaney tie-up, JPMorgan warns
Anheuser-Busch earnings will decline 26 percent in the US this year after Bud Light alienated swathes of its customers through a tie-up with trans influencer Dylan Mulvaney, JPMorgan analysts have predicted.
‘We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future,’ the analysts said on Tuesday.
JPMorgan’s note said the expected decline in earnings, before interest and taxes, would follow a 12 percent drop in volume and a 10 percent decline in sales.
The warning from experts at the world’s largest bank highlights the magnitude of the backlash over Bud Light’s decision to give Mulvaney, 26, a can with a picture of her face on it.
Mulvaney also made several Instagram and TikTok posts promoting the beer to her millions of online followers as part of Bud Light’s March Madness campaign.
Bud Light sales have fallen significantly since the beer’s partnership with Dyland Mulvaney and analysts at JPMorgan expect it will cause Anheuser-Busch earnings to slide 26% this year.
Analysts at JPMorgan said Bud Light’s partnership with Dylan Mulvaney will cause sales for this year to decline by 26 percent
‘We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future,’ analysts at the world’s largest bank said on Tuesday
JPMorgan’s assessment cited some of the latest sales figures for the beer, which in the week to May 6 were down 23.6% on a 27.7% drop in volume.
Furthermore, the bank’s analysts don’t expect sales to return to normal in 2024.
Shares in Anheuser-Busch had fallen around 10 percent on the New York Stock Exchange since April 1, when Mulvaney posted about the Bud Light partnership.
In the company’s latest attempts to deal with the backlash, Anheuser Busch has told wholesalers it will buy back unsold cases of Bud Light that are past their expiration date.
Bud Light sales have plunged 26 percent compared to this time last year amid backlash from its customers over the campaign.
Marketing experts say the boycott of Bud Light is particularly extreme because not only has it alienated its customer base, but also LGBT groups who feel it have since tried to distance themselves from the Mulvaney partnership.
Two marketing executives have been removed from their posts over the internal scandal.
The brand is also losing sales because it’s so easy for customers to find alternatives.
‘In the beer world, there are thousands of other options readily available at similar price points,’ Anson Frericks, a former Anheuser-Busch executive, told ABC News. ‘Every grocery store and bar usually has the other options’.
Bud Light now plans a branding revamp and will also overhaul its advertising to focus on the all-American themes of football and country music.
Anheuser Busch continues it’s desperate attempt to recover from their controversial promotion with influencer Dylan Mulvaney that caused a drop in sales
One reported move is Bud Light buying back cases of unsold and expired beer.
The Mulvaney deal came after the brand’s ousted marketing chief Alissa Heinerscheid said she planned to update the ‘fratty’ and ‘out of touch’ branding.
Industry analysts have warned that unless something drastic changes, the negative volume trends will continue into the summer.
For the week ending May 6, in-store sales of Bud Light across the US were down 23.6 percent compared to the year before. And the week before that, ending April 29, sales dropped by 23.3 percent.
This follows declines in sales for the week ending April 22, which were at 21.4 percent. And seven days earlier, the dip was 17 percent, according to NielsenIQ data provided to Dailymail by Bump Williams Consultancy.
The data – showing that US sales are dropping by as much as 20 percent each week – has since been described by industry experts as ‘bad.’
Bump Williams from Bump Williams Consultancy told DailyMail.com: ‘I don’t think the declines in sales/volume will get any worse, but I do think their negative volume trends will continue.’
He said sales dipping by 20 percent seems to be the new ‘norm’ for Bud Light.
But he added that experts are waiting to see what will happen to sales over Memorial Day and the summer selling season to assess if the damage will continue.
A new profile of the company’s handling of the PR, social media and sales backlash admits the company and CEO Michel Doukeris (pictured) are trying to remedy their failures
Mulvany posted the content to coincide with the NCAA March Madness tournament and sparked the backlash against Bud Light.
Williams, who specializes in the alcohol industry, said: ‘This seems to be where the brand’s weekly declines have started to settle, falling in that -20 percent range over the past few weeks.
‘I wonder if this is going to be the ‘floor’ for expected Bud Light declines moving forward unless something drastic changes.’
Meanwhile, at a CVS in West Palm Beach, Florida, attempting to shift some of its Bud Light stock shelves were fully stocked with multipacks of the beers.
Onlookers joked that no one wanted to buy the alcohol following the scandal.
Another person said that after driving around different stores and gas stations in Mississippi, they saw an overflow of Bud products because ‘no one is buying it.’
Williams previously said that Bud Light must apologize and added: “Right now their compass is completely broken.” There’s no game plan.
Williams said that without a clear plan to navigate the backlash and turn around the decline in sales, ‘Bud Light is in serious trouble this year’. He said the brand is still the biggest-selling in America, but risks being overtaken by Modelo Especial by the end of the year if the backlash continues.