With a net worth of roughly $400 million, high-profile investor and “Shark Tank” star Kevin O’Leary knows a thing or two about business.
During an appearance on Fox News, O’Leary says he believes the historic collapse of Bud Light will be a topic for business schools moving forward.
“This is an extraordinary case, and one I’ll be teaching in business schools across America this fall,” O’Leary explained. “In the history of beer, in the history from when it was marketed, because remember, you’re dealing with a commodity. Beer is essentially the same. What differentiates it is brand.” (Trending: CNN’s Response To Joe Biden’s Corruption Is Jaw-Dropping)
“So you spend hundreds of millions of dollars a year building up a brand, and then you have to ask yourself on a campaign that really brings you into a discussion around gender identity, ‘is that the right thing for my beer brand?’” O’Leary continued. “Well, apparently not, because if you spend $200 million a year, the biggest moves in the beer market were measured by 1 to 5% in a year. That’s an extraordinary volatility.”
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“To lose 25% market share has never been achieved, and it’s impossible to even dream it,” he said. “So what have you learned? Social media – a widely held view amongst my CEOs is that if you get a bad social media story, it’s going to go away in 24 to 48 hours.”
“But that didn’t happen here. We’re still talking about this situation months later, and they continue to lose share. That, number one, is an issue. Number two, you’ve really got to understand who your constituency is. What they did there was very damaging,” he concluded. (Trending: Fauci Gets The Worst News of His Career)
A poll by Rasmussen Reports in May 2023 found that the majority of American adults at 54% support a boycott of Bud Light. The poll also found that the boycott is more popular among Republicans (66%) than Democrats (42%).
Bud Light sales have plunged in recent months amid backlash to the brand’s decision to partner with transgender influencer Dylan Mulvaney. In the four weeks ending May 28, Bud Light sales fell 23% from the same time period the year before, according to data from Nielsen. This decline is even more pronounced among younger drinkers, with sales down 30% among those aged 18-24.
The backlash against Bud Light began in April, when the brand posted a video on social media featuring Mulvaney promoting a contest for the March Madness basketball tournament. Mulvaney, who is transgender, was met with a wave of criticism from conservative social media users, who accused Bud Light of promoting a “woke” agenda.
Bud Light responded to the backlash by removing the video, but the damage had already been done. Sales of Bud Light continued to decline in the weeks that followed, and the brand lost its title as the top-selling beer in the United States to Modelo Especial.
The decline in Bud Light sales is a reminder of the power of social media to impact brands. In today’s world, a single controversial tweet or post can have a devastating impact on a brand’s reputation and sales. Bud Light is not the first brand to learn this lesson the hard way, and it is unlikely to be the last.
It remains to be seen whether Bud Light will be able to recover from the Mulvaney controversy. The brand has launched a new ad campaign featuring Kansas City Chiefs tight end Travis Kelce, but it is unclear whether this will be enough to win back customers. In the meantime, Bud Light’s competitors are likely to be watching closely, hoping to capitalize on the brand’s misfortune.