Modelo has continued to see its sales accelerate in the midst of a boycott targeting rival Bud Light, the company’s chief executive said Thursday.
“The good news is, there’s just so much opportunity still to go,” Constellation Brands CEO Bill Newlands told the Wall Street Journal about Modelo Especial, which became the No. 1-selling retail beer in the United States earlier this year. He said that there are still parts of the United States where the brand isn’t well known, meaning that Modelo has a considerable amount of “potential” in the near future.
The Journal cited sales figures from Bump Williams Consulting, which found that Bud Light accounts for 8.1 percent of all U.S. retail-store beer sales this year, whereas Modelo accounts for 8.5 percent. It noted that Bud Light is the top brand by sales volume, while Anheuser-Busch InBev has increased marketing spending for its subsidiary in recent months as it focuses on NFL advertising.
At the same time, Mr. Newlands said that sales of the beer are continuing to increase, saying that Modelo sales rose about 12 percent in the second quarter compared with the same period last year. Meanwhile, the beer is likely to gain more coveted shelf space at retailers when they reset their shelves in the fall and spring.
Bud Light’s troubles started in early April when the company produced a beer can with transgender activist Dylan Mulvaney before the influencer posted it on social media. Some conservative influencers and celebrities publicly criticized the move, while some suggested a boycott. Sales of the beer dropped over many consecutive weeks, and Modelo became the best-selling brand of beer over the summer, dethroning Bud Light’s 20-year reign at the top.
Florida Gov. Ron DeSantis later urged the state’s pension manager to investigate Anheuser-Busch and potentially take legal action against the firm over the incident. Like President Trump, Mr. DeSantis is also a GOP presidential candidate.
Last month, several experts and former industry executives suggested that Bud Light could lose shelf space if its sales don’t pick up soon.
“During a busy shopping period on a Friday or Saturday night, if you don’t have the beer available cold on the shelf, consumers pick something else,” former Anheuser-Busch InBev executive Anson Frericks, a frequent critic of his former company, told ABC News. He noted that shelf space is “the single largest determinant of sales in a store” before he warned there would be a “dramatic shift” for Bud Light.
Dave Williams, vice president of analytics and insights at Bump Williams Consulting, said that retailers often watch for sales figures to determine what brands would be given the best shelf space.
“There’s explosive growth on one side and sharp decline on the other,” Mr. Williams said, according to ABC. “This does have that ripple effect where if Bud Light loses space on the shelf, that could make it a longer-term endeavor to claw back to where they were if they’re ever able to do that in the first place.”
Adding more fuel to the fire, a beer industry expert, Harry Schumacher of Beer Business Daily, told Fox News some Bud Light drinkers may never come back and have switched to other brands.
During the first week of the controversy, Bud Light sales dropped 11 percent, while Anheuser-Busch InBev’s stock dropped some 20 percent at the beginning of June. Weekly year-over-year declines in sales persisted over the summer amid the backlash.
In August month, Anheuser-Busch’s American division revealed in its quarterly earnings report that it lost about $395 million amid the boycott and that U.S. revenue dropped about 10 percent year-over-year.
Anheuser-Busch InBev’s CEO, in response to the Mulvaney backlash, said that just “one can” was produced and said there was no official partnership. At the same time, the executive blamed the boycott on what he described as “misinformation” and “confusion” over the incident.
“This was the result of one can,” CEO Michel Doukeris said during a May call. “It was not made for production or sale to the general public. It was one post, not a formal campaign or advertisement.”
The company’s American division, meanwhile, attempted to win over customers by saying in mid-April that it wasn’t attempting to wade into a politically divisive issue. “We never intended to be part of a discussion that divides people,” executive Brendan Whitworth said, adding: “We are in the business of bringing people together over a beer.”
The Epoch Times contacted Anheuser-Busch InBev for comment Thursday.
