Bud Light's Market Downturn: Layoffs and Changing Preferences
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Chapter 1: The Impact of Boycotts
Anheuser-Busch, the parent company of Bud Light, recently revealed plans to reduce its corporate workforce by several hundred positions in the United States. This decision comes as a response to an ongoing boycott initiated by conservative groups over a marketing strategy that featured a transgender influencer.
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Section 1.1: The Layoff Details
The layoffs will involve less than 2% of the workforce, affecting approximately 380 employees, while frontline positions—including warehouse personnel, drivers, and sales representatives—will remain untouched, according to the company's announcement.
Bud Light's sales have experienced a steep decline for seven consecutive weeks after a promotional post in April by Dylan Mulvaney, a transgender influencer who showcased a Bud Light can on Instagram. This endorsement ignited a backlash from conservative consumers, who accused the brand of endorsing values that contradicted theirs. Many customers took to social media to share videos of themselves destroying Bud Light products or switching to competitors.
Section 1.2: Financial Ramifications
The boycott has had a noticeable impact on the company's stock value, which dropped nearly 12% since early April, contrasting with a 12% increase in the S&P 500 during the same timeframe. Last month, Modelo, a Mexican beer, surpassed Bud Light in sales, marking the end of Bud Light's two-decade dominance in the market.
Bud Light's challenges highlight a significant shift in consumer preferences, with many opting for alternatives like craft beers, cocktails, and seltzers rather than traditional light lagers. "We have the most diverse collection of drinkers in the country’s history, who get to choose from the most diverse collection of beverage alcohol brands that have ever existed," stated Bryan Roth, editor of the newsletter Sightlines, in an interview with The Atlantic.
Chapter 2: The Human Element
The backlash has not only affected sales but also led to harassment towards employees and distributors, who have been subjected to insults and threats from disgruntled customers. Independent distributors have seen their commission-based earnings decline significantly due to the drop in Bud Light sales.
"This has really, really killed a lot of the guys who are commission-based. That’s who it’s really hurting,” shared a sales supervisor from a Florida distributor with ABC News. “There’s nothing they could’ve done — this was thrown in their faces.”
In light of the sales downturn, Anheuser-Busch has extended financial assistance to numerous frontline workers at independent distributors, as noted by CEO Michel Doukeris during a May earnings call.
Criticism has also emerged from some LGBTQ advocates, who view the company's response to the boycott as a capitulation. Anheuser-Busch placed two executives involved in the endorsement deal on leave and issued a statement from CEO Brendan Whitworth on their website. "We never intended to be part of a discussion that divides people," Whitworth remarked. "We are in the business of bringing people together over a beer."
In a further blow, the Human Rights Campaign, the largest LGBTQ advocacy organization in the U.S., suspended Anheuser-Busch's Corporate Equality Index score, which evaluates how well companies treat their LGBTQ employees and customers. The company had previously achieved a perfect score of 100.
“Good people are going to start leaving because they aren’t making money,” former Anheuser-Busch InBev executive Anson Frericks told ABC News.
Relevant articles:
- Anheuser-Busch to lay off hundreds of workers after Bud Light boycott hammers sales, ABC News, July 27, 2023
- Bud Light parent company fires hundreds of workers amid months-long boycott, American Military News, July 27, 2023
- Anheuser-Busch is cutting jobs amid Bud Light’s sales slump, MSN, July 27, 2023
- The Rise and Fall of Bud Light, The Atlantic, July 21, 2023
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