Bill Gates has made a strategic investment in the potential resurgence of Bud Light by purchasing $1.7 million worth of shares from the parent company of the embattled brand. The move by the Microsoft founder, aged 67, was executed through his philanthropic entity, the Bill & Melinda Gates Foundation Trust, during the second quarter of this year, and it holds an estimated market value of around $95 million.
Gates’ investment decision comes at a critical juncture for Anheuser-Busch Companies, the parent company of Bud Light. They have been grappling with the repercussions of their ill-fated partnership with transgender influencer Dylan Mulvaney, which began on April 1 and had a profound negative impact on the beer’s image and sales nationwide.
This isn’t the first instance of Gates venturing into the global beer industry in recent times. In the wake of Bud Light’s controversial alliance with Mulvaney, Gates made a significantly larger purchase. On February 17, he invested $939.87 million in Heineken stock, as confirmed by the Netherlands Authority for Financial Markets filing. Additionally, in 2007, Gates acquired a $392 million stake in FEMSA, a brewery later sold to Heineken in 2010.
Bud Light has faced a significant decline in sales, further exacerbated by the ongoing backlash following their partnership with Mulvaney. The brand lost its long-held title as America’s top-selling beer to Modelo Especial, marking the end of its 22-year reign.
As of August 19, Bud Light’s sales in off-premise locations, such as grocery stores and gas stations, plunged by 15.9 percent in terms of revenue and 20.1 percent in terms of volume over the past year. In stark contrast, Modelo Especial witnessed a surge in sales, with a 10.3 percent increase in revenue and a 9.6 percent boost in volume.
Bump Williams, the head of data firm Bump Williams Consulting, who closely tracked this data with NielsenIQ, attributed Modelo’s success to its strong performance in convenience stores.
While Bud Light experienced a 1.4 percent year-over-year decline in organic volume in the second quarter of 2023, with a significant 14 percent drop in North America, there was notable growth in the Asia Pacific region.
Morgan Stanley analyst Sarah Simon shared her insights, stating, “After successful execution through Covid, 2023 has seen ABI suffer substantial market share loss in the US, driven primarily by consumer boycotts of its Bud Light brand.” She also noted that ABI’s exposure to emerging markets helps mitigate the impact of the loss in the US market share.
The controversy surrounding the Bud Light-Mulvaney partnership alienated the brand’s traditional customer base, prompting widespread boycotts and public condemnations. Notably, musician Kid Rock famously filmed himself using cases of Bud Light as target practice, while loudly exclaiming, “F*** Bud Light.” Other celebrities, including John Rich and Travis Tritt, publicly criticized the brand, leading to shifts in consumer preferences.
Millions of customers swiftly abandoned Bud Light, some even recording videos of themselves pouring the beer down the drain or disposing of the cans. The polarization surrounding beer choices extended into bars across the country, where patrons engaged in heated debates and disputes over their beverage selections, causing some bar owners to cease selling Bud Light altogether in a bid to prevent altercations.
In conclusion, Bill Gates’ significant investment in Bud Light’s parent company reflects his confidence in the brand’s potential recovery, despite the challenges it currently faces due to the fallout from its partnership with Dylan Mulvaney. The brewing industry continues to witness shifts in consumer preferences, and Bud Light’s journey to regain its former glory is one to watch closely.
