According to the Wall Street Journal, Molson Coors Chief Executive Gavin Hattersley said retailers are already reallocating Bud Light’s shelf space to other brands. That means that long-term Bud Light sales may never recover.
The standard view is that advertising is the most crucial way to generate brand sales. That concept is as valid as Joe Biden’s comments about the Hunter scandal.
Product quality is crucial for sales, but real estate or shelf space is right after that. The more space a retailer gives a product on its shelves, the bigger the opportunity to sell more product. Advertising is one tool product managers use to help get the product off the retailer’s shelves. I
If product sales go down the toilet, like Bud Light, it loses retailer real estate, and in a crowded category like beer, product sales will never recover until the unlikely event that it gets back the space it lost.
The Wall Street Journal noted that as Bud Light sales continue “cratering,” the “biggest beneficiary of Bud Light’s woes” is rival company Molson Coors Beverage.
At a conference call with analysts, the Molson Coors CEO added,
There are reasons to believe that Bud Light sales might be permanently impaired. Molson Coors Chief Executive Gavin Hattersley said on a conference call with analysts that retailers are already reallocating space to other brands during shelf resets that take place in the spring, with more resets to come in the fall. In bars and other on-premise channels, the company gained more than 12,000 tap handles in the quarter, he added. Molson Coors also said it is planning an additional $100 million of marketing spending in the second half of the year to keep that sales momentum. “Our job is to maintain those gains that we’ve got,” Hattersley said.
You may remember at the beginning of the Bud Light boycott, this writer emphasized that boycotts never work. The Bud Light boycott worked. The marketing effort with transgender influencer Dylan Mulvaney was the wrong marketing effort at the wrong time. It severely hurt the brand, releasing Americans’ hatred for the wokeness shoved down our throats for too many years. Someone in the Marketing Dept. didn’t do the job of understanding the product’s consumers.
Per National Review, Alissa Heinerscheid, who ran the brand’s marketing, rejected its target audience to appeal to the woke culture.
When I heard that Heinerscheid had declared that she felt a “need to evolve and elevate this incredibly iconic brand” and that “Bud Light had been kind of a brand of fratty, kind of out-of-touch humor, and it was really important that we had another approach,” I wondered if she herself drank or enjoyed Bud Light. There’s nothing wrong with a choice to not drink Bud Light — it certainly is far from my first choice in beers — but it does raise the question of whether her decision to move the beer’s image in another direction was driven, in part, by a desire to market less to “frat” boys and more to well-educated (Wharton School and Harvard), upscale, white-collar professionals like herself.
The marketing hurt the brand because Ms.Heinerscheid did not respect those who purchased Bud Light. Her attempt to turn Bud Light from a popular brand to one appealing to upscale beer drinkers failed miserably.
Washington Post journalist Megan McArdle responded to The Journal’s report, “I remain shocked by the durability of the effects of the conservative boycott on Bud Light. WSJ reports that retailers are now reallocating shelf space to other brands, which will help lock in the decline.”
(…) An anonymous beer distributor told the New York Post on Monday about how Bud Light as a brand may never fully recover from its controversy, partially because of the nature of the beer market itself.
To date, Bud Light sales are down about 27%. The Bud Light sales dip affected other Anheuser Busch brands. Sales of Michelob Ultra — the nation’s No. 3 beer last year — were down by 4.3% in the week ended July 1, while Busch Light sales were down 8.5%, according to the Bump Williams Consulting and NielsonIQ data.
Even increased advertising hasn’t stopped Bud Light sales from falling down the abyss. The drop in sales/loss of shelf space will damage the brand long term, possibly forever. The woke marketing director ignored a fundamental marketing rule. To move products off store shelves adverting must be directed to the brand’s consumers. Directing it to the marketer’s priorities and beliefs of the marketing department’s priorities. It’s all about the purchasers’ beliefs and priorities.
That one mistake probably killed the number one beer brand.
