According to the Epoch Times, “Anheuser-Busch InBev was downgraded on Wednesday by an HSBC analyst who said the firm is now dealing with a ‘Bud Light crisis’ after the company produced a can with the face of a transgender influencer last month, sparking widespread backlash.”
HSBC analyst Carlos Laboy, downgraded the company’s stock to “hold,” saying there are “deeper problems than ABI admits” after the social media partnership with transgender activist Dylan Mulvaney was announced.
“Is ABI’s leadership getting the brand culture transformation right? It’s mixed,” Laboy wrote Wednesday to analysts, according to reports. “At Ambev, we think the answer is ‘yes’; in the U.S., we think it’s ‘no.’ The way this Bud Light crisis came about a month ago, management’s response to it and the loss of unprecedented volume and brand relevance raises many questions.”
“Why did its U.S. leadership underestimate the risk of pushback given the recent experience of other firms? Is A-B hiring the best people to grow the brands and gauge risk?” Laboy continued. “If Budweiser and Bud Light are iconic American ideas that have long brought consumers together, why did these marketers fail to invite new consumers without alienating the core base of the firm’s largest brand?”
On May 4th Anheuser-Busch CEO Michel Doukeris attempted to distance his company from the Mulvaney controversy during a call with investors last week, saying that it was “just one can” with Mulvaney’s face that was produced. “It was not: it was one post. It was not an advertisement.”
Sales for Bud Light plunged 23.4 percent in the last week of April, according to Nielsen data as the Mulvaney controversy escalated. And the sales declines weren’t just limited to the Bud Light brand. Budweiser took an 11.4 percent hit in sales for the week ended April 29, and other –Busch beer brands also saw declines.
“It’s not just a Bud Light issue,” Bump Williams, chief executive of Bump Williams Consulting, told the NY Post. “It’s an Anheuser-Busch portfolio problem now.”
And the hits just keep coming…
(Michel Doukeris image credit: AB InBev)