The stock status of beermaker Anheuser-Busch has just been downgraded by a major bank as the company continues to buckle under widespread boycotts of its products.
The backlash against Anheuser-Busch is continuing to rage on after its Bud Light beer brand launched a “woke” campaign with transgender Dylan Mulvaney.
Anheuser-Busch now appears to be doomed as the backlash is showing no signs of slowing down.
Major bank HSBC has now responded to the plummeting sales figures by downgrading the stock of Anheuser-Busch InBev to hold status.
The move means investors should neither buy nor sell shares of the company.
In an analysis, Carlos Laboy, managing director for the global beverage sector of HSBC, said that AB InBev had poorly handled its efforts to shift its brand culture in the U.S.
AB InBev’s sales have continued to plummet because of the fallout.
“Is ABI’s leadership getting the brand culture transformation right? It’s mixed,” Laboy wrote in a note that was published on CNBC Wednesday.
“At [Brazilian beverage giant] Ambev, we think the answer is ‘yes;’ in the U.S., we think it’s ‘no’,” Laboy wrote.
“The way this Bud Light crisis came about a month ago, management’s response to it and the loss of unprecedented volume and brand relevance raises many questions,” Laboy added.
“Why did its US leadership underestimate the risk of pushback given the recent experience of other firms?
“Is A-B hiring the best people to grow the brands and gauge risk?
“If Budweiser and Bud Light are iconic American ideas that have long brought consumers together, why did these marketers fail to invite new consumers without alienating the core base of the firm’s largest brand?”
The fallout from Mulvaney’s partnership has caused Anheuser-Busch’s sales to plummet.
Nationwide retail sales of Bud Light were down 23.4% year-over-year for the week of April 29, according to data from NielsenIQ and Bump Williams Consulting data, obtained by the New York Post.
That number is worse than the 21.4% decline from the previous week.
It is also the fourth consecutive week in which sales have dropped by double-digit figures.
The impact of the boycotts isn’t just hitting Bud Light either.
The backlash has also spread across AB InBev’s other American brands: Budweiser sales dropped 11.4% for the week ending April 29; Michelob Ultra, the third highest-selling brand behind Bud Light and Modelo Especial, was down 4.4%; Natural Light was down 5.2%; Busch Light, 1.8%.
“It’s not just a Bud Light issue,” CEO Bump Williams told the New York Post.
“It’s an Anheuser-Busch portfolio problem now.”
“If Bud Light doesn’t fix its trend by the end of this month, it will continue to lose market share because it will lose Memorial Day,” Williams added.
“That kicks off the summer season.
“There has to be a sense of urgency for InBev to correct these trends.”