Beer industry expert says Bud Light has become cautionary tale on businesses entering 'culture wars'
Beer Business Daily publisher Harry Schuhmacher discusses the fallout of Anheuser-Busch's headquarters move to New York and how it lost touch with middle America.
Anheuser-Busch could have avoided recent layoffs and the ongoing decay of Bud Light sales that came following its now-infamous promotion with Dylan Mulvaney if New York City-based decision makers were more in touch with Middle America, according to a beer industry expert.
"In my 30 years of doing this, I've never seen anything like it. I've never seen such a shift in market share this quickly, and I've never seen it so prolonged. And I think it's kind of a wake-up call for marketers in all CPG [consumer packaged goods] that wading into the culture wars can have pretty serious consequences," Beer Business Daily publisher Harry Schuhmacher told Fox News Digital.
"It's probably best just to stay clear, unless you're a brand that trades on that kind of controversy," Schuhmacher continued. "Bud Light clearly does not. When you're drinking beer, politics, religion, those sorts of things should be out the door. And they broke the first cardinal rule of beer brand marketing."
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Bud Light parent, Anheuser-Busch, announced last month it would lay off hundreds of employees, with roughly 380 U.S.-based employees being shown the door. (LightRocket via Getty Images)
Last month, Anheuser-Busch announced it would lay off hundreds of employees, with roughly 380 U.S.-based employees being shown the door. An Anheuser-Busch spokesperson revealed the layoffs would "simplify and reduce layers with its organization" and will not affect "brewery and warehouse staff, drivers and field sales, among others."
Schuhmacher said the layoffs were regrettable, but there were a variety of reasons why they had to occur.
"There was clearly a need for a cultural shift within the company, especially in the sales and marketing departments in New York," Schuhmacher said. "We've been led to believe that's where the majority, if not all of the layoffs have occurred, not at the street level, not in their regional offices just in New York."
In 2015, Anheuser-Busch moved its marketing and advertising teams from its native St. Louis to 24th Street in New York City. Along the way, Schuhmacher said it fell into a culture of what he calls "checkbox marketing," where coastal elites in a trendy Chelsea neighborhood make decisions that will look good on LinkedIn, as opposed to what will actually help sell beer.
"A-B made a conscious decision back in 2015 to move their sales and marketing functions to New York from Saint Louis, where they had been headquartered for, you know, 100 years. At the time, distributors warned them that might give them a hole in their thinking. It might give them gaps in connecting with Middle America. And sure enough, that clearly happened," Schuhmacher said.
"I think living in that kind of Chelsea-Manhattan bubble really does remove you from the bars and taverns, restaurants and convenience stores, grocery stores across America. And I think it definitely does have a cultural effect that you can't really measure, but it's definitely there," he continued. "I don't know what they can do now. It's hard to move people back, but I think clearly that might have been a contributing factor, at least to what happened."
The ordeal started when Mulvaney, a transgender influencer, took to social media to show off cans of Bud Light sent by Anheuser-Busch to celebrate the milestone of "365 Days of Girlhood." As conservatives were angered, an interview with then-marketing vice president Alissa Heinerscheid surfaced in which she criticized the brand's consumers as "fratty" with "out of touch humor."
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A picture of the commemorative Bud Light can featuring TikTok influencer Dylan Mulvaney. (Dylan Mulvaney/Instagram)
Bud Light sales have plummeted since the controversy erupted, and the beer has shed roughly 30% of its volume as rivals Molson Coors and Modelo have thrived.
"You just have to, from a practical standpoint, reduce your head count, which is, again, it was avoidable and it's unfortunate, but it kind of had to happen," he said.
Anheuser-Busch did not immediately respond to a request for comment.
In addition to financial woes and losing touch with America’s Heartland, Schuhmacher also feels that Bud Light honchos probably feel consumers needed to feel heard.
Bud Light sales have plummeted since a promotional partnership with transgender activist Dylan Mulvaney caused widespread backlash. (Instagram)
"They are reacting and they are making changes within the company because the consumer is still pissed, you know, months and months in, they're still pissed, and the volumes are not improving," Schuhmacher said.
According to a letter sent to employees, laid-off Anheuser-Busch staff received severance pay, six months of continued company-paid health insurance benefits and resources to help find a new job.
Beer consumers can drink in the privacy of their own home, or out in public. Schuhmacher’s publication, Beer Business Daily, recently put a spotlight on Bud Light falling from No. 1 to No. 4 in on-premise sales at bars and restaurants, according to Union’s new OnPrem Insights report.
"They've been hit harder in the on-premise [sales] because when you're drinking on-premise, you're out in public, and I think nobody wants to be seen or get into a conversation about the culture wars by drinking a Bud Light in public," he said.
As Bud Light suffers, Molson Coors finished the second quarter of 2023 with "its best quarterly brand volume trend since the MillerCoors Joint Venture in 2008, as Coors Light, Miller Lite and Coors Banquet each grew volume double-digits," according to Beer Business Daily.
The Mexican pilsner beer has a few more huddles to clear before being the undisputed champ.
"It's been widely reported that Modelo Especial is the No. 1 beer. And that is true, but it's only true in certain channels. And it's only true when you're counting dollars versus cases, because Modelo Especial is more expensive than Bud Light," Schuhmacher said.
"Any increase is going to accrue more to Modelo Especial. So, yes, in the off-premise channels, many grocery stores and convenience stores, Modelo Especial is now the No. 1 beer both currently and increasingly year-to-date," he continued. "So, I think by the end of the year, Modelo Especial will likely be the No. 1 beer in America by any metric if these current trends continue, which they seem to be pretty locked in."
As for sales at bar and restaurants, Modelo Especial had a slight hiccup producing enough kegs to satisfy demand.
"If they can get their keg situation and figure it out, it likely will overtake Bud Light as well if the current trends continue," Schuhmacher said.
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Fox News’ Nikolas Lanum and Kendall Tietz contributed to this report.
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