02.06.2023 – The supreme law in sales is: know your customer. Sometimes the day comes when it turns out that some decision-makers live in a closed parallel world and float like oil on water. If they then want to educate the clientele, things go wrong. That’s what happened with Bud Light. Which sometimes earns traders whopping profits.
Almost exactly two months ago, someone wanted to be progressive in marketing and give the icon of the American beer industry a radical image change. The Bud Light beer brand was once something like the epitome of mainstream America: good humor, patriotism, baseball, football, barbecues with the family. Down-to-earth, with sturdy Clydesdale horses in front of the beer carriages as sympathy carriers in the advertising – visitors to the Oktoberfest know this.
To “fratty”
And then an incredibly woke manager came along who thought the beer brand was too “fratty” – that is, too much aligned with the fraternities at the universities. Ergo, she came up with the fabulous idea of hiring a transvestite. Dylan Mulvaney celebrated “365 Days of Womanhood” with his own likeness on the blue beer cans. And so the whole group came under fire.
The supreme law in sales is: know your customer. Sometimes the day comes when it turns out that some decision-makers live in a closed parallel world and float like oil on water. If they then want to educate the clientele, things go wrong. That’s what happened with Bud Light. Which sometimes earns traders whopping profits.
Source: Bernstein Bank GmbH
You can see the result in the daily chart of Anheuser-Busch Inbev: quite a crash. The stock has now lost 20 percent, according to “Forbes,” reaching bear market territory since the transgender promotion kicked in at the end of March. In just two months, the stock has burned through about $26 billion in market cap, according to the report.
In the U.S., the already fierce culture war has flared up again over the issue. The regular customers turned away – in the football stadiums, the Bud Light stands remained empty, the beer lies on the shelves like lead. The sales losses are enormous: Goldman Sachs referred to data from NielsenIQ, according to which Anheuser-Busch has recorded a 10 percent drop in sales in each of the past four weeks compared to the previous year.
Get woke – go broke
True, there have been more severe bear markets because of Corona and the temporary end of public life. But this time things are different – the competition has not been hit. On the contrary, the stock of competitor Molson Coors – with its Coors Light and Miller Light brands – has gained about 20 percent in the same period. The question is whether the storm will eventually subside. Wall Street, at any rate, is still quite bullish, according to “Forbes.” Nearly three dozen analysts surveyed by FactSet see an average price target of $67 per share.
“Forbes” referred in its online edition, by the way, to other corporations that are quite queer and have recently suffered share price losses: retailers Target and Kohl’s, for example, but also Nike, Adidas and North Face.
By the way, “Forbes” referred in its online edition to other corporations that pretend to be quite queer and have recently suffered share price losses: the retailers Target and Kohl’s, for example, but also Nike, Adidas and North Face.
The moral of the story: smart traders keep an eye on companies that have obviously lost touch with the mass of their customers and tend to communicate with the cultural chic. And therefore unexpectedly face a boycott. These are typical short candidates. Conversely, stocks of companies that weather the storm or counteract it offer nice turnaround opportunities. Bernstein Bank wishes you good luck in scouring the market!
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