The dust is settling, and results from the beer giants are coming in.
On Thursday, Bud Light parent company Anheuser-Busch InBev (BUD) posted better-than-expected Q1 results, a year after an advertising campaign kicked off a boycott starting April 2023.
Yet, Constellation Brands (STZ) and Molson Coors (TAP) have been fighting to hold on to their gains from Bud’s losses while looking for more room to grow.
Revenue for Anheuser-Busch jumped 2.6% to $14.55 billion from higher prices, but volume sold dropped 0.6%, though it was less than Wall Street anticipated. The largest decline came from North America, where volume dropped 9.9%, largely due to sales of Bud Light.
Sales to retailers and wholesalers were down 13.7% and 10.7%, respectively, in the US.
“We’ve lost a whole generation of hardcore Bud Light shoppers,” Bump Williams of Bump Williams Consulting told Yahoo Finance. “It’s going to take us at least 10 years to try and recapture what we lost in one year.”
Williams said AB InBev will have to “buy” shoppers. As Gen Zs grow up and turn 21, they’ll turn to brands that made an impression on them in their younger years.
“They’re not going to remember any of that stuff [regarding the boycott]. When they come into the marketplace, they’re going to say, ‘Oh, boy … I know that I liked their advertising … I’m going to go grab one,” Williams added.
Since the plunge in Bud Light’s sales first hit in Q2 2023, its next quarterly results will be the true test of the company.
“We think a lot of consumers are never going back … but some are coming back,” CFRA analyst Garrett Nelson told Yahoo Finance.
“The longer-term impact, I think [we won’t know] until we see their second quarter results,” Nelson said.
Over the last four-week period, Bud Light sales are still down 27.1% from a year ago, whereas Miller Lite is up 7.8% and Coors Light grew 15.3%, according to data from Bump Williams Consulting.
Nelson called Molson Coors the “primary beneficiary of the fallout.”
In Molson Coors’s Q1 results, CEO Gavin Hattersley said grocery shelf space is expected to increase 13% for both Miller Lite and Coors Light, and roughly 20% for Coors Banquet.
Hattersley believes that will lead to higher sales, especially ahead of the critical summer season. “I don’t believe any of us have seen such a dramatic shift in shelf space before … more space equals more volume,” he said.
Williams isn’t convinced that Molson Coors capitalized on the fallout as much as it could have.
“Miller Coors just squandered the biggest opportunity they’ve ever had in their life. They didn’t win anything. They simply got the leftovers from the Bud Light debacle,” Williams said. “They didn’t do anything to earn that; they just simply fulfilled orders.”
Yet, Constellation Brands is the “massive winner,” per Williams. “Everything they have in the marketplace is growing — everything,” he commented.
Last June, Modelo overtook Bud Light as the No. 1 beer in the US. It gained market share from Bud Light’s boycott but also benefitted from the growing popularity of imported beers.
“Constellation Brands being the big play on imports, with Modelo, Corona, Pacifico. Imports have taken market share from domestic brands for a long time … the Bud Light boycott helped accelerate that,” said Nelson.
Its CEO Bill Newlands seemed confident that the company could keep its momentum, even if Bud Light sales were to increase in volume.
“Fortunately, we have a lot of things going in our favor … we have a lot of avenues to continue to grow our business, and now we’re introducing a number of things from our innovation,” he told Yahoo Finance.
Constellation’s beer volumes jumped 8.9% year over year in the latest quarter while sales jumped 11%, both beating Wall Street estimates.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.