The dust is starting to settle, and we are starting to see some results from the beer giants.
On Thursday, Bud Light's parent company, Anheuser-Busch InBev (BUD), reported better-than-expected first-quarter financial results, one year after its April 2023 ad campaign launched a boycott.
Still, Constellation Brands (STZ) and Molson Coors (TAP) have fought to preserve the profits from Bud's losses while looking for more room for growth.
Anheuser-Busch's sales rose 2.6% to $14.55 billion due to higher prices, but volume fell 0.6%, although it was below Wall Street expectations. The biggest decline was in North America, where volumes fell 9.9%, primarily due to sales of Bud Light.
In the US, sales to retailers and wholesalers decreased by 13.7% and 10.7%, respectively.
“We've lost an entire generation of Bud Light's hardcore shoppers,” Bump Williams of Bump Williams Consulting told Yahoo Finance. “It will take at least 10 years to recover what was lost in one year.”
Williams said AB InBev needs to “buy” shoppers. As Gen Z grows up and turns 21, they begin to look to brands that made an impression on them when they were younger.
“They won't remember anything like that. [regarding the boycott]. When they come to market, they'll say, 'Hey, hey…you know I liked their ads…I'm going to go buy one too,''' Williams added.
Bud Light's next quarterly results will be the company's true test since its sharp decline in sales first occurred in the second quarter of 2023.
“Many consumers think they'll never come back…but some will,” CFRA analyst Garrett Nelson told Yahoo Finance.
“The long-term impact is [we won’t know] Until we know the results for the second quarter,” Nelson said.
Over the past four weeks, Bud Light's sales are still down 27.1% year over year, while Miller Lite's sales are up 7.8% and Coors Light's is up 15.3%, according to data from Bump Williams Consulting. There is.
Nelson called Molson Coors “the main beneficiary of the fallout.”
In Molson Coors' first quarter results, CEO Gavin Hattersley said grocery shelf space was 13% at both Miller Lite and Coors Light and about 20% at Coors Banquet. It is expected to increase by %.
Mr Hattersley believes that will lead to increased sales, especially ahead of the crucial summer season. “I don't think anyone has ever seen shelf space change so dramatically…More space means more quantity,” he said. Told.
Williams isn't convinced Molson Coors took full advantage of this impact.
“Miller-Coors just squandered the biggest opportunity of their lives. They didn't win anything. They just grabbed the leftovers from the Bud Light fiasco,” Williams said. Told. “They didn't do anything to earn it. They just carried out orders.”
Still, Constellation Brands is a “huge winner,” according to Williams. “Everything on the market, everything is growing,” he commented.
Last June, Modelo overtook Bud Light to become America's No. 1 beer. Although it gained market share from the Bud Light boycott, it also benefited from the growing popularity of imported beer.
“Constellation brands like Modelo, Corona, and Pacifico play a big role in imports. Imports have long taken market share from domestic brands…The Bud Light boycott helped accelerate that. ,” Nelson said.
CEO Bill Newlands seemed confident the company could maintain its momentum even as Bud Light sales increased.
“Fortunately, we have a lot going in our favor…We have many avenues to continue to grow our business and we are currently gaining a lot from innovation. We are implementing it,” he told Yahoo Finance.
Constellation's beer sales rose 8.9% and sales rose 11% from a year earlier in the latest quarter, both of which exceeded Wall Street expectations.
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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter @brooke di palma Or email bdipalma@yahoofinance.com.
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