The amazing story of the self-created demise of Bud Light continues to expand as the once perennial king (queen?) of beer brands has toppled significantly in just months. One side component in this disaster has been how many are unwilling to even give voice to the cause of this, and it is something we see playing out in this new development that has come to light.
The Ardagh Glass Manufacturing Company has come out with the announcement that after some production slowdowns, the company will be laying off nearly 650 employees this month, with severance packages being negotiated with unions. The company, a third-party glass bottle supplier to Anheuser-Busch, will be closing two of its plants as well – one located in Simsboro, Louisiana, and the other in Wilson, North Carolina. These layoffs and closures are tied to the steep drop in sales of Bud Light.
This becomes a strong indicator of just how poorly this once-august brand has performed since the ill-fated decision to promote trans activism nationally. It was April 1 when transgender influencer Dylan Mulvany revealed the promotional campaign after partnering with the Bud Light brand, and, in stunning fashion, it has taken just three months to completely transform its stature. Bud Light has plunged from the position of the #1 selling beer label, which it held for decades, and we see this market effect is not only hurting the distributors across the country but is beginning to impact other companies.
Ardagh Glass will end 400 jobs at the North Carolina location, and another 245 are out of work with the Louisiana plant closure. Officially, the company seems to avoid pointing to the Bud Light fiasco as a cause; in a statement, the company says these closings are due to a "multi-year performance optimization program." This evasive language is possibly done to keep in good graces with A-B InBev and solidify the partnership, but it serves as yet another example of how nobody in power positions is willing to come out and declare A-B InBev committed a grievous marketing error.
Despite the claims from the Ardagh executive suites, in North Carolina, local news station WRAL investigated the matter and found internal communications at the company that stated definitively the loss of production and the need to close down was directly resulting from the loss of demand for Bud Light:
By May 18, an internal memo obtained by the news station, company executives said they would shut down the two plants 'due to slow sales with Anheuser-InBev,' the parent company of Budweiser and Bud Light. Longtime employees explained that the majority of their business was making bottles for Budweiser and Bud Light.
This is as clear a sign as it can get that this drop in sales is both significant and enduring. These plant closures indicate the drop in demand has been stark, as a core supply flow has been curtailed. This can no longer be dismissed as a "political stunt" or a conservative-generated boycott effort. What we are witnessing is a sweeping market reaction that far exceeds any outrage campaign. Over the past six weeks, the drop in sales has only increased each successive week, as customers are walking away in massive numbers. Recently, Bud Light's sales erosion reached nearly a one-third drop over last year's figures. What is baffling today is how few are willing to directly address the severe error committed.
When the initial backlash erupted, the company was mute in response. Then after weeks of obvious customer flight, the Vice President of the brand who spearheaded this campaign was merely placed on administrative leave, a clear sign the brewer expected this to blow over. Ensuing ad campaigns have been desperately outreaching in as neutral a manner as possible, all while the company has never addressed the central problem it created.
When Bud Light fell from the top of the sales charts, many in the press tried vainly to come up with other reasons behind the fall. (Sorry, guys, but Cinco de Mayo has been taking place for years, and the shift in drinkers' tastes was projected to occur in the span of half a dozen years, not in a matter of weeks!) A-B InBev America CEO Brendon Whitworth appeared on "CBS Mornings" last week in an attempt to smooth over the problems, but his evasive non-answers and corporate double-speak swayed no one.
Now, a bottling partner is absorbing its share of significant loss of business, and it, too, wants to avoid admitting the problem publicly. This only means the problem will continue to fester, and more market hits will occur. It is amusing/amazing to see a major brewery ignoring a basic tenant of drinking problems: The first step is admitting it.