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Falling sales volumes for Bud Light after a controversial advertising campaign could reverberate throughout its supply chain, according to Truist.
According to a report “unpacking the Bud Light backlash” in Beer Business Daily, AB InBev’s (BUD) Bud Light brand saw notable drops in volume in some markets for the Easter weekend. The drop in demand could be related to a new marketing campaign starring transgender activist and social media influencer Dylan Mulvaney, according to the report.
“We dispense with any discussion of politics or social issues, but note that the post indicated that some ABI dealers in Heartland and South were increasingly cautious given backlash from consumers,” Truist analyst Michael Roxland wrote in reaction to the report. “This is important to Ball Corp. (NYSE: BALL) as ABI accounted for ~13% of BALL’s sales in 2022 and mass beer/soft drinks accounted for ~70% of BALL’s business in North America.”
Since Bud Light is Anheuser Busche’s (BUD) best-selling brand, the impact could be particularly large. Roxland maintained a Hold rating on Ball Corporation (BALL), but noted that North American volumes “could come under pressure if this issue persists” and advised caution as the true impact of the campaign becomes clearer.
AB InBev (BUD) shares rose 0.8% on Tuesday, while shares of Ball Corporation (BALL) rose 1.84%.
Read more about the FTC’s alcohol price investigation.