- Bud Light, under its parent company Anheuser-Busch InBev, recently suffered a steep sales slump, following a promotional partnership with transgender activist Dylan Mulvaney.
- This campaign, which marked “365 days of girlhood” for Mulvaney, initiated a backlash from various sections, causing a decline in sales and stock value.
- The controversy culminated with Bud Light losing its 22-year title as the best-selling beer in the U.S. to Modelo Especial.
Financial Setbacks and Market Reaction
- U.S. revenue for Anheuser-Busch InBev dropped 10.5% in the second quarter.
- Earnings before taxes, interest, and depreciation fell by 28.2%.
- The company responded by laying off hundreds, representing “less than 2%” of its U.S. workforce.
Bill Gates Foundation Trust Sees Potential
Despite the bleak outlook, The Bill and Melinda Gates Foundation Trust purchased a substantial 1.7 million shares of Anheuser-Busch, translating to a $95 million investment. This move might suggest confidence in the brand’s potential for recovery, even as A-B’s stock decreased by nearly 2% since the purchase and about 7% for the year. Bill Gates, known for not being a big beer aficionado, has diversified his trust’s beer-related investments. Earlier, the trust acquired shares of Heineken Holding worth nearly $1 billion.
CNN Notes on Anheuser-Busch InBev’s Performance
Even as Bud Light struggles in the U.S., other A-B InBev brands such as Corona and Stella Artois continue to perform well. Outside the U.S., A-B InBev boasts of many successful brands across various countries, as noted by CNN.
Key Numbers Beyond Bud Light
- An InBev’s adjusted earnings rose by 5% in the quarter ended June 30, contrasting the U.S. slump. This growth surpassed the expected 0.4% forecast.
- A company-conducted survey suggested that 80% of Americans still have a “favorable or neutral” view of Bud Light.
- Last year, AB InBev reported a staggering revenue of $57.8 billion. To compare, Heineken generated approximately $37.972 million in 2022.
- A-B InBev holds ownership of over 630 brands and operates in about 150 countries, including popular local brands like Aguila in Colombia and Harbin in China.
CEO Insights: The Road to Recovery
Michel Doukeris, AB InBev’s CEO, pointed out in his recent earnings call:
“Our consumers across all sentiment groups have common feedback. One, they want to enjoy their beer without debate. Two, they desire Bud Light to center on beer. Three, they wish for Bud Light to emphasize universally loved platforms such as the NFL, Folds of Honor, and Music.”
Bill Gates and His Brewed Ventures
Although Gates professed not to be a significant beer enthusiast in 2018, his recent investments paint a different picture. In addition to his Anheuser-Busch InBev investment, Gates procured 10.8 million shares in Heineken earlier this year. This $900 million purchase gave him a 3.76% stake in the Amsterdam-based brewery. The shares were bought from Mexico’s Femsa, a significant Coca-Cola bottler, which had earlier sold its brewery to Heineken in 2010. Interestingly, Gates had invested in Femsa back in 2007 with a $392 million stake.
Future Implications and Market Speculations
With significant stakeholders like The Bill and Melinda Gates Foundation Trust showing confidence in Anheuser-Busch InBev, market analysts are closely watching the company’s next steps.
Rebranding and Market Strategy
Anheuser-Busch InBev seems poised for a rebranding exercise, particularly for Bud Light. The company’s collaboration with quintessential American favorites like football and country music in its new campaigns signals an effort to reclaim its lost market share and appeal to a broader audience.
Stakeholders’ Expectations
The foundation’s investment is not merely a monetary one. With its vast reach and influence, the Bill and Melinda Gates Foundation Trust’s involvement also brings a level of public interest and scrutiny. Stakeholders will be expecting a robust and proactive strategy from Anheuser-Busch InBev to address both the recent controversy and its broader market challenges.
Conclusion
Anheuser-Busch InBev may be facing a storm of disputes and hurdles, yet intriguingly, hefty financial support from big players such as The Bill and Melinda Gates Foundation Trust suggests a glimmer of opportunity amid the chaos. In this ever-unpredictable business realm, adversity often paves the way for potential boons. The final impact of these shrewd maneuvers in the beer marketplace? Well, that story is still unfolding with time.
