Bud Light Falters as Modelo and Coors Gain Market Share


In the evolving beer industry landscape, the giants are reporting their latest financial performances, and the trends suggest shifting consumer loyalties.

Anheuser-Busch InBev SA/NV (NYSE:BUD), the maker of Bud Light, delivered better-than-expected first-quarter results on Thursday, despite an ongoing boycott stemming from a controversial ad campaign that began in April 2023. The company saw a revenue increase of 2.6% to $14.55 billion, primarily due to higher pricing strategies. However, overall beer volume dipped by 0.6%, with a sharp 9.9% decline in North American sales, largely due to the underperformance of Bud Light.

Meanwhile, competitors Constellation Brands (NYSE:STZ) and Molson Coors Beverage Company (NYSE:TAP) are keen to retain their recent gains from Bud Light’s missteps and are looking for additional growth opportunities. U.S. sales to retailers and wholesalers have significantly decreased for Bud Light, dropping by 13.7% and 10.7% respectively.

Bump Williams of Bump Williams Consulting expressed concerns about Bud Light’s future, noting, “We’ve lost a whole generation of hardcore Bud Light shoppers,” and predicted a lengthy recovery process of at least ten years. He suggested that Anheuser-Busch might need to invest significantly in marketing to regain its lost consumer base, particularly as Gen Z matures into the primary consumer demographic.

Despite the setbacks since the boycott began affecting sales in the second quarter of 2023, industry observers like Garrett Nelson from CFRA Research remain cautiously optimistic. Nelson commented, “We think a lot of consumers are never going back … but some are coming back.” He indicated that the upcoming second-quarter results would be crucial in assessing the long-term impact of the boycott.

In the latest four-week period, Bud Light’s sales plummeted by 27.1% year-over-year, while Molson Coors’s Miller Lite and Coors Light saw increases of 7.8% and 15.3%, respectively. Molson Coors CEO Gavin Hattersley announced expected increases in grocery shelf space, which he believes will boost sales, particularly with the upcoming summer season.

However, Williams criticized Molson Coors for not fully leveraging the opportunity presented by Bud Light’s decline, saying, “They didn’t win anything. They simply got the leftovers from the Bud Light debacle.”

Constellation Brands, on the other hand, has emerged as a significant winner, with brands like Modelo, Corona, and Pacifico driving growth. Last June, Modelo surpassed Bud Light as the number one beer in the U.S. CEO Bill Newlands of Constellation Brands highlighted the strategic advantages they hold, including a strong focus on popular imports and new product innovations, which have led to an 8.9% increase in beer volumes and an 11% jump in sales over the last quarter, outperforming Wall Street expectations.

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