Bud Light anti-trans backlash has some weighing potential 'chilling effect' on corporate LGBTQ+ support

By Bill Peters

'There is a subset of American consumers who will not drink a Bud Light for the foreseeable future,' analyst says

Sales of Bud Light fell for a sixth straight week following the uproar over the brand's partnership with trans influencer Dylan Mulvaney, new industry data shows, leaving more analysts weighing the short-term and long-term fallout for the 40-year-old light beer.

Some analysts said that Bud Light was running out of time to turn sales trends around ahead of the Memorial Day weekend, and predicted a discount wave the likes of which has not been seen since 2005. Other researchers wondered about the possible chilling effect on corporate America's support -- actual or lip-service -- to LGBTQ+ people, as anti-trans sentiment becomes law in many states.

Bud Light volumes -- a measure of liquid sold -- for the week ending May 13 fell 28.4%, following a 27.7% drop the week before, according to the trade publication Beer Business Daily, which analyzed Nielsen IQ data.

In at least one store, the publication said, a Bud Light 24-pack was priced as low as $3.49.

"This could be a promotional summer the likes [of which] we haven't seen since after Hurricane Katrina in 2005, where there was so much beer inventory backed up in the trade that it initiated the price war of all price wars, which ended with InBev being about to initiate a hostile takeover of [Anheuser-Busch] two years later after its market cap cratered," Beer Business Daily said.

The publication said steep price-cutting battles are often spurred by outside events, like a hurricane or, in this case, anger over the partnership with Mulvaney. The difference this time, it said, was that "the external event is only negatively affecting one brewer."

The publication said that volumes were down for Budweiser, Busch Light and Michelob Ultra -- beer brands owned by Bud Light's parent, Anheuser-Busch InBev. However, volumes rose for rivals like Coors Light (TAP), Miller Lite and Pabst.

Bump Williams, president and chief executive of Bump Williams Consulting, said over email that if Bud Light couldn't turn sales around by the Memorial Day weekend -- generally a holiday featuring a heavy amount of grilling and beer drinking -- "then this brand and the entire [AB InBev] portfolio is in serious jeopardy of losing their consumer base forever."

Demand for light beer has been falling for years as craft beer, hard seltzer and other alternatives draw younger drinkers. And Coors Light -- among the brands that has seen a bump in demand from the Bud Light backlash -- has, like other brands, run campaigns supporting LGBTQ+ people in the past. Sarah Kate Ellis, chief executive of the LGBTQ+ advocacy group GLAAD, said last month that companies understood that inclusion was good for business.

Experts have also said that politically led social-media boycotts typically evaporate quickly, and that marketers are usually willing to suffer resistance from one demographic in order to win over a another in the longer term. But they also say that growing anti-trans sentiment threatens to stretch the Bud Light boycott out for longer than normal.

A number of states have banned gender-affirming care for minors. Meanwhile, Florida Gov. Ron DeSantis went after Walt Disney Co.'s (DIS) self-governing status after the company criticized a state law that bans discussion of sexual orientation or gender identity in public-school classrooms through third grade.

That measure -- known as the "Don't Say Gay" bill -- was expanded this month through eighth grade. Josh D'Amaro, the chair of Disney's parks division, said this week that the fight with DeSantis hasn't hurt business.

But other experts said right-wing groups, after lobbying in large corporations' interest for years, were caught off-guard after some of those businesses pushed back on laws that targeted the LGBTQ+ population -- most notably, the repeal of North Carolina's transgender "bathroom law" in 2017. That pushback forced those groups to recalibrate.

Imara Jones, a journalist, expert on anti-trans extremism and chief executive of the nonprofit media group TransLash Media, said that as those groups figure out how to better coordinate efforts to stir outrage, bigger companies chasing relevance might be more reluctant to make appeals to an LGBTQ+ audience.

Also see: Target removes some LGBTQ merchandise from stores ahead of Pride month after threats to workers

"The one thing that I think we have to understand is that the campaign against Dylan Mulvaney worked," she said. "And the fact that it worked is going to have a chilling effect."

The anger against Bud Light began last month over a handful of social-media posts by Mulvaney in which she was shown promoting the beer. But it was enough for musician Kid Rock to post a video of himself shooting up several cases of the beer, and for others to call for a boycott. Anheuser-Busch's CEO later weighed in and largely equivocated, saying: "We never intended to be part of a discussion that divides people."

Shares of AB InBev (ABI.BT) inched 0.2% lower on Tuesday. The stock has largely fallen since April, when the backlash began, but it is still up 5.7% over the past 12 months.

JPMorgan analyst Jared Dinges, in a note on Tuesday, said that the focus for AB InBev investors "has shifted squarely to the potential impact from the Bud Light controversy, and away from prior debates such as Latin America earnings trajectory."

But he said that any impact on U.S. demand trends was already priced into the stock, that the company's earnings-per-share growth potential was still solid and that shares could get a bigger lift if the company's second-quarter results came in better than expected. But he was downbeat on the months ahead.

"We do not expect the lost sales to be recovered in [fiscal year 2024] and a full U.S. recovery would provide 10% EPS upside to our current estimates," he said.

He said that AB InBev already planned to make a bigger push in summer promotional campaigns after a shift away from doing so in the fall and winter. But he was skeptical on the ability to revive U.S. sales.

"We believe the declines will prove to be mostly sticky despite increased marketing spend from [AB InBev] over the summer, and we anticipate only a slight improvement in trends over the next 12 months," he said. "We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future."

The ongoing backlash comes ahead of Pride Month in June. Jones said that LGBTQ+-focused support from corporations needed to be about more than the financial benefits.

"As we know, a lot of times, that marketing is performative," she said. "For the community, as it comes under more pressure, it's demanding that these brands not only have a float parade, or not only slap a rainbow on their products during this time of year, but that you actually are showing up for us, you're actually speaking up for us, you're actually hiring us, you're actually sending part of your charitable contributions to our organizations."

"That's been a larger and larger sort of call that has been emerging for years," she said. "And it's reaching a crescendo now, because the community is coming under extreme attack."

-Bill Peters

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05-24-23 0816ET

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