The dust settles and the results from the beer giants arrive.
Bud Light’s parent company, Anheuser-Busch InBev (BUD), reported better-than-expected first-quarter results on Thursday, a year after an advertising campaign launched a boycott starting in April 2023.
Still, Constellation Brands (STZ) and Molson Coors (TAP) are fighting to hold on to gains from Bud’s losses while seeking more room to expand.
Anheuser-Busch’s revenue jumped 2.6% to $14.55 billion due to higher prices, but the volume sold fell 0.6%, although that was less than what Wall Street had predicted. The biggest decline came in North America, where volume fell 9.9%, largely due to sales of Bud Light.
Sales to retailers and wholesalers declined 13.7% and 10.7%, respectively, in the United States.
“We lost an entire generation of die-hard Bud Light buyers,” Bump Williams of Bump Williams Consulting told Yahoo Finance. “It’s going to take us at least 10 years to try to recover what we lost in one year.”
Williams said AB InBev will have to “buy” buyers. As Gen Z grows up and turns 21, they are turning to the brands that influenced them in their youth.
“They won’t remember any of this (about the boycott). When they go into the market, they’ll say, ‘Oh, boy… I know I liked their ad… I’ll go take one,” Williams added.
Since Bud Light’s sales first fell in the second quarter of 2023, its upcoming quarterly results will be the company’s true test.
“We think a lot of consumers will never come back… but some do come back,” CFRA analyst Garrett Nelson told Yahoo Finance.
“The long-term impact, I think (we won’t know) until we see their second-quarter results,” Nelson said.
Over the past four weeks, Bud Light sales are still down 27.1% from last year, while Miller Lite is up 7.8% and Coors Light is up 15.3%. according to data from Bump Williams Consulting.
Nelson called Molson Coors “the main beneficiary of the fallout.”
In Molson Coors’ first-quarter results, CEO Gavin Hattersley said grocery shelf space is expected to increase 13% for Miller Lite and Coors Light, and about 20% for Coors Banquet.
Hattersley believes this will lead to increased sales, particularly ahead of the critical summer season. “I don’t think any of us have ever seen such a dramatic change in shelf space… more space equals more volume,” he said.
Williams isn’t convinced that Molson Coors benefited as much as it could have from the fallout.
“Miller Coors just blew the biggest opportunity they’ve ever had in their lives. They didn’t win anything. They just salvaged the leftovers from the Bud Light debacle,” Williams said. “They didn’t do anything to win this; they just carried out orders.”
Still, Constellation Brands is the “big winner,” according to Williams. “Everything they have in the market is growing, everything,” he commented.
Last June, Modelo overtook Bud Light as the No. 1 beer in the United States. It gained market share thanks to the Bud Light boycott but also benefited from the growing popularity of imported beers.
“Constellation Brands plays a major role in imports, with Modelo, Corona, Pacifico. Imports have taken market share from domestic brands for a long time…the Bud Light boycott helped accelerate that,” said Nelson.
Its CEO, Bill Newlands, seemed confident in the company’s ability to continue its momentum, even if Bud Light sales were to increase in volume.
“Fortunately, we have a lot of things working in our favor…we have a lot of opportunities to continue to grow our business, and now we’re introducing a number of things from our innovation,” he told Yahoo Finance.
Constellation’s beer volumes jumped 8.9% year over year in the most recent quarter, while sales jumped 11%, beating Wall Street estimates.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email him at bdipalma@yahoofinance.com.
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