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In this issue
Scores: Will AB InBev’s total sales in North America fall by 6% or more, by volume, in Q2? (As compared to Q2 of last year.)
Date: This question was posed to readers on May 7, 2023
Outcome: Yes (so higher forecasts score better)
Average forecast: 29% (the median was 10%)
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The Bud Light surprise
We were very wrong about Bud Light.
In April, conservatives began calling for a boycott, in response to the brand’s marketing collaboration with a transgender influencer. In May, Nonrival asked how likely it was that Bud Light parent company AB InBev’s North America sales would fall by 6% or more in Q2, by volume, compared to the prior year.
80% of readers who made a prediction said it was unlikely the company would take such a big hit. Half said it was very unlikely—just a 10% chance of happening. But it happened. AB InBev’s North America sales plummeted:
The company acknowledged in its earnings that this drop was primarily due to declining sales of Bud Light—which, as of June, had lost its place as America’s top-selling beer, replaced by Modelo. And Bud Light is now poised to lose retail shelf space, which is allocated based on sales, potentially compounding the losses.
The conventional wisdom—backed by multiple studies—has been that most boycotts don’t make much difference. Jerry Davis, a professor at the University of Michigan’s Ross School of Business, told Vox that he “really can’t think of a comparable event in the past.” Why was this case different?
One idea, says Davis, is that boycotts work better when consumers have easy access to alternatives. “Bud Light seems like the most maximally substitutable beverage on Earth,” he says. Another explanation comes from one of the few Nonrival readers who predicted that sales would drop precipitously:
90%: Beer is very image-led and male egos are too fragile to risk being laughed at, even by friends.
Perhaps those two explanations can fit together: Boycotts are more likely to work when the product’s appeal is driven by image or ego or identity, and when there are easy alternatives.
That still doesn’t fully explain things—and Vox’s piece goes much deeper into what could be going on here. But I was struck reading back through forecasts by one reader’s rationale for why it was very unlikely that AB InBev’s sales would fall:
10%: This is much bigger on social media than in the real world.
That sentiment struck me as very wise, which is why I included it in the results roundup that week. In this case, though, it may not have been the case. Sometimes social media really does determine what happens in the real world.