Bud Light’s Strategy?

I’ve found the Dylan Bud Light Fiasco interesting. It highlights the difficulties with marketing in such a polarized media environment. An environment in which narratives catch fire and engulf deductive reasoning. Where the intersection of brand and consumer is redirected to fuel an invented “culture war.”

I’ll analyze the flaws in attributing the decline in sales to this Instagram Ad and what lessons Bud Light should take from it.

Maybe the best way to start is with this moniker I came across Twitter.

“Go Woke, Go Broke”

Most likely generated from the “Twitter Right” but admittedly it is quite phonetically pleasing. Although it expresses more aspiration than reality.

The definition of “Woke” according to Merriam-Webster

“aware of and actively attentive to important societal facts and issues (especially issues of racial and social justice)”

Try finding business leaders who beleives it is best for their bottom line to be blind to societal facts and issues. Granted the “Twitter Right’s” interpretation is probably selfishly aimed solely at progressive causes.

Critiques on how brands respond (or not) to societal facts and issues exists on both the right and left. The left has often rebuked brands for race insensitivity, think H&M Monkey Incident or Gucci Black Face Incident.

Consumers should feel empowered to hold brands accountable for being insensitive to societal facts and issues. I also believe brands should feel empowered to see past the critiques of consumers who are aggrieved merely by the presence of another human.

Brands who thoughtfully orient their brand around societal facts and issues will benefit as a byproduct of providing value to the consumer.

Recently it was reported that BudLight had been surpassed in sales by Modelo. There have been arguments that link the Mulvaney controversy to decreased sales and subsequently Bud Light loosing it’s “America’s Top Beer” sales title to Modelo.

From the chart you can see that sales are down when comparing this same 9 week period, year over year. I do believe there’s a story to being down 30% in sales compared to the previous year. As the pundits would say, “thats not a nothing burger.” But there’s usually more to the story than a single event.

So naturally I start to hypothesize how this could be.

Prices are up Hypothesis

Currently, inflation adds on average 0.61$ to every $15.00 spent. This leads to a general sentiment that things are expensive and people focus disposable budget on life’s essentials.

Families could be cutting back on money spent on BudLight as it is not seen as an essential category. Under this hypothesis Bud Light consumers would be price sensitive and Bud Light as a product would have a high price elasticity.

Market Pressure on Bud Light

Bud Light may not be everyone’s favorite but it is the favorite of many beer drinkers. With increasing competition in the alcoholic beverage category the leader seems most poised to erode share of beer sales. Mix that with overall Beer Sales being down ~15% and you get multiple downward pressures on Bud Light sales.

The other pressure comes from beer alternatives, namely Hard Seltzers. Which have seen a steady rise in popularity over the past few years.

Modelo is my Go TO

When I’m at the bar I’m usually asking for a Modelo Negro and if they don’t have that I’ll take the regular. I believe Modelo tastes better than Bud Light. I’d be more confused than mad if I went to a kick back and there’s only Bud Light. But I’m not the voice of the full consumer base.

Economist point out that Modelo’s sales growth is fueled by growth in Hispanic Drinking Age population. You might assume this population is likely to have grown up seeing this brand and may have an affinity towards products “hecho en Mexico.”

So one might theorize that the new drinking age consumers are more inclined to drink Modelo.

The below shows population growth by ethnicity. This is a broader view that could explain why Modelo now has the number one spot.

Overall understanding what is the most heavily weighted factor in declining sales is a tough question, even with the most complex attribution model. When we start to conflate cultural issues with business outcomes it can lead to observer bias. A myopic view usually results in the classic fallacy of mistaking “correlation” for “causation.”

Retrospect on Strategy

Focusing on value to the consumer is a durable strategy for maintaining a successful brand. Drawing an intentional through line between marketing and value dilutes ambiguity in this polarized environment.

I fundamentally do not believe in the apathetic strategy of “everyone is our audience,” for any brand, regardless of category. There should be core consumers that anchor sales and growth markets that expand sales.

I’d deduce Bud Light’s average consumer is white, started enjoying Bud Lights through collegial or blue collar experiences. They are also astutely aware of the difference in taste between Coors Light and Bud Light. They probably skew more patriotic, religious and more likely to watch right-wing media. I’m over generalizing but only contradictory data would convince me otherwise.

How do you maintain Bud Light’s core consumer base while growing into new markets with an environment full of “third rail” cultural issues.

The third rail of a nation’s politics is a metaphor for any issue so controversial that it is “charged” and “untouchable” to the extent that any politician or public official who dares to broach the subject will invariably suffer politically. The metaphor comes from the high-voltage third rail in some electric railway systems.

Extending this political metaphor to marketing, Marketing departments must have a defined approach to “third rail” cultural issues. Intentionally positioning your brand to provide value to an issue with a well executed strategy.

I’m arguing that Bud Light’s execution did not serve the LGBTQ+ community while at the same time minimizing downside risk with their core audience. I say this mainly due to their flailing attempted to respond to the backlash and the fragility of their support for the LGBTQ+ community.

Imagine an execution where it went beyond a simple Instagram Ad. Imagine they created a digital map of all of the Anheuser-Busch activations during the summer and invited everyone to have a conversation over a beer.

Strategies with a clear through line of value have a stronger foundation to repel critiques from.

It’s a reality that certain “Third Rail” cultural issues are more likely to ignite backlash in the core audience. This is where it’s imperative to have culturally nuanced opinions with a seat at the table, including the right leaning white guy.

Moving Forward

Bud Light’s new campaign focuses on beach goers and cook outs, with a 70’s track in the back ground. Most certainly safe but “on brand.” They have a litany of brands under Anheuser-Busch to leverage for more forward leaning campaigns. I certainly hope they haven’t become too shy.

In contrast, Modelo currently has commercials with a grovel voice man, with low level celebrities speaking on the hard work to Middle America. One could argue this is also safe but effective.

As a brand Bud Light realizes that their newest Gen Z consumers expect them to be on the right side of equality, but they also expect them to create value. Bud Light took one on the chin, even though it is the appropriate direction for them to move in.

Bud Light’s declining sales weren’t caused by this marketing activation rather just correlated to it. Taking calculated risks is what moves brands forward and being on the right side of history is good for the bottom line in the long run. A keen eye towards societal trends and balanced approach to providing value is what grows sales.

I don’t believe every societal issue requires an accompanying campaign to validate a Brand’s stance. But when Brands do decide to cross over the “third rail,” they should do so with intention and value.