Anheuser Busch Inbev (NYSE: BUD) (EBR: ABI) continues its slow motion collapse as the stock is down another 4.7%. The problem, of course, is that entire idea of corporate wokeness - the go woke go broke idea becoming fulfilled. That Dylan Mulvaney issue with the Bud Light can should - could perhaps - have been nothing but a small piece of marketing. It's rebounded into being something much larger than that. For sales are down - really, well, well, down. This is the volume beer business where gaining or losing a percentage point of sales versus the competition is considered a major market move. It's even possible that this will become a long term damage to the brand and sales volumes. There's a technical point here about how the market works that might/might not lead to that.
As we say, percentage points up or down of sales are a big issue in this market. But what's happening to Bud Light sales isn't percentage points, it's tens of percentage points: “ According to Nielsen data, Bud Light sales edged down 24.6% in the week ended May 13 as compared to the same period in 2022, accelerating from a 23.6% decline in the first comparable week of the month. The backlash also spread out to other brands, including Michelob Ultra which trended down 6.8%, Budweiser which dropped 14.9%, and an 8.5% drop in Natural Light sales.” Worse, much worse, is that it's spreading to other brands within the group. And yes, it gets even worse again: “Coors Light volumes jumped 16.9% as compared to 15.7% year over year growth in the week prior.”
Anheuser-Busch Inbev share price from NASDAQ
That the Bud Light falls aren't being entirely offset by the Coors Light rises shows that some of the market is moving away from beer entirely. Which brings us to the technical market matter. The grand fight in FMCG goods like beer (or sodas etc) in the US is in gaining cooler and shelf space in the supermarkets, 7/11s and convenience stores. If Bud, whether light or not, loses that space, or even some of it, then that will permanently lower the sales of the brand. Each week that sales are down increases the chances that it will lose that space. What retailer wants valuable space taken up with goods not moving?
That is what the real danger is - not some short lived boycott leading to lower sales for a bit. But something that lasts long enough to ruin the hard fought wars for that retail shelfspace. It perhaps depends on how this all develops. Mulvaney is now, really, a side issue. Is the boycott tapping into the Trump/MAGA/dispossessed of flyover country resentment and thereby becoming entrenched? If so then BUD has a serious and long term problem on its hands. That is, we're unlikely to see a swift bounce back here.
