The Belgian brewer, which makes Budweiser, Stella Artois, and Bud Light beers, faced a tough 2023 as it muddled through a cocktail of trends. While it saw a post-pandemic recovery in beer demand, it also witnessed a dent in sales following an ad campaign gone awry in the U.S. 

Now, there’s a price tag on the controversial Bud Light ad spot involving transgender influencer Dylan Mulvaney. In North America, AB InBev found organic revenue—a proxy for operating performance—slid by $1.4 billion owing to less Bud Light beer sold. 

To be sure, this geography includes Canada in addition to the U.S. However, the group’s revenue growth remained flat for the year in the former, while Bud Light’s boycott took a toll in the U.S. 

AB InBev CEO Michel Doukeris said the group’s “growth potential was constrained by the performance of our U.S. business” during an earnings call Thursday. 

AB InBev has grappled with the impact of Bud Light’s partnership last April with transgender influencer Dylan Mulvaney to promote one of its drinks. The ad immediately attracted attention—and not necessarily in a good way—from the anti-trans community, and led to a beer boycott.

The Belgian brewer promptly disavowed the campaign, sparking outrage among the LGBTQ community. Bud Light soon lost its crown as America’s top-sold beer, and sales have continued to lower since, costing AB InBev valuable market share in the U.S. 

“I think that we are making progress. It’s not at the fast pace that we were expecting or that we’ve been working for. But nevertheless, progress is in place,” Doukeris said.

Eager for the bright spots

Although the brewing giant is battling a slump in sales in North America with U.S. revenues dropping by 9.5% for the year, it managed to perform better globally. AB InBev’s full-year earnings were up 7% to nearly $20 billion compared with the same period a year earlier. Annual revenue was up 7.8% year over year to $59.38 billion, falling slightly short of analyst expectations of $60.52 billion.

The company’s fourth-quarter revenues were up even though volumes slipped. China stood out as a silver lining in the last quarter as the success of AB InBev’s premium drinks propped up earnings by 32%. 

The Stella Artois maker also announced it would raise its annual dividend by 9%.

“ABI (AB InBev) has reported a decent set of results. It remains plagued by Bud Light, but it has generally avoided other banana skins,” Barclays analysts said in a note Thursday, adding that the bank sees the company becoming “more dependable” now.

Bernstein analyst Trevor Stirling said in a note that he expects the company to buck the impact of Bud Light’s boycott in 2024, which could give the company its much-needed boost in the U.S. 

In the lead-up to its earnings, AB InBev also averted a strike in the U.S., involving 5,000 workers on Wednesday, that could have severely disrupted beer production. The five-year tentative deal involves a 23% increase in wages, a lump-sum ratification bonus of $2,500 for each member of the union as well as an $4-per-hour increase in pay effective immediately for the first year.