Anheuser-Busch sales plummet in US amid Bud Light boycott
Company revealed losses in an earnings release one week after imposing layoffs.
Anheuser-Busch InBev, the world's largest beer maker, suffered a steep decline in revenue and profit in the U.S. over three months ending in June, demonstrating the financial wallop delivered by a consumer boycott of Bud Light in the wake of a product endorsement from a transgender influencer.
The company's U.S. sales fell by more than 10% over the three months compared to the same period last year, according to the company's earnings report released on Thursday. Meanwhile, Anheuser-Busch's core profit in the U.S. fell by more than 28%, the fresh data showed.
The drop-off in U.S. performance arose "primarily due to the volume decline of Bud Light," the earnings report said.
The report arrives one week after Anheuser-Busch announced plans to lay off less than 2% of its employees, which amounts to roughly 380 workers.
A sponsored endorsement from transgender influencer Dylan Mulvaney for Bud Light in April prompted a consumer boycott among some conservatives that hammered sales. The boycott gained momentum after the initial response from the company was perceived as conciliatory by some LGBTQ advocates, prompting frustration from the left.
"Most consumer boycotts have only minimal impact on a company's sales or profits, because boycotts are easy to call and rarely become prominent in people's minds," Gerald Davis, a professor of organizational behavior at the University of Michigan Graduate School of Business, told ABC News. "With this big of an impact on profits, the Bud Light fiasco will count as a milestone."
Sales of Bud Light across the U.S. fell for at least six weeks following the start of the boycott, according to data from Bump Williams Consulting and Nielsen NIQ, reviewed by ABC News. For instance, sales dropped nearly 26% over the week ending on May 20, the data showed.
Then, in July, Modelo overtook Bud Light as the top-selling beer in the U.S.
In response to declining sales, Anheuser-Busch InBev provided financial support for tens of thousands of frontline workers at independent distributors, company CEO Michel Doukeris said on an earnings call in May.
After the initial boycott, Anheuser-Busch InBev posted a statement from CEO Brendan Whitworth on its website in April.
"We never intended to be part of a discussion that divides people," Whitworth said, in part. "We are in the business of bringing people together over a beer."
The company also placed two executives who oversaw the endorsement of Mulvaney's Instagram post on leave, the Wall Street Journal reported in April.
The response drew sharp criticism from some LGBTQ advocates who considered it capitulation to the backlash and boycott. The Human Rights Campaign, the nation's largest LGBTQ advocacy organization, suspended Anheuser-Busch InBev's Corporate Equality Index score, USA Today reported. Previously, the company scored 100, the top rating.
Despite the downturn in U.S. sales revealed on Thursday, Anheuser-Busch achieved worldwide revenue growth of more than 7% over the three months ending in June compared to the same period a year ago. Price increases helped fuel the jump in revenue, since sales volume ticked down 1.4% over the reporting period, the earnings showed.
In morning trading on Thursday, Anheuser-Busch stock rose 1% on the news.