By Ananya Mariam Rajesh
(Reuters) -Constellation Brands' Modelo Especial was the top-selling beer brand in the United States for a second consecutive month in June, after first dethroning Anheuser-Busch InBev's Bud Light in May.
Bud Light, which held the top spot as the most-sold beer in 2022 and in the first four months of this year, has seen sales drop after a backlash from conservatives over a social media promotion with transgender influencer Dylan Mulvaney.
Several U.S. retailers have faced pushback from conservatives over the sale of LGBTQ+ merchandise. Target (NYSE:TGT), which has sold Pride-themed merchandise in June for years, was forced to remove some of it following confrontations between customers and employees.
Modelo Especial was the top-selling beer brand for the four weeks ended July 1, with an 8.7% share of overall beer sales through retail stores for the period, while Bud Light came in second with a 7% share, according to consulting company Bump Williams, which sources data from NielsenIQ.
AB InBev's CEO Michel Doukeris said in May that it was too early to have a full view of the impact of the backlash against Pride-linked promotions.
"This boycott has now become something much more permanent than anyone anticipated," said Neil Reid, professor of geography at the University of Toledo, who researches the beer industry.
Sales of Bud Light and Budweiser dropped 28% and 11.7%, respectively, from a year earlier, while Modelo Especial sales rose 8.5%.
"The Bud Light and Budweiser share losses would persist through the year and we believe that the consumers who have opted to move away from those two brands are ultimately lost to the company," said TD Cowen analyst Vivien Azer.
Azer added that consumers had quickly figured out AB InBev's other beer brands like Michelob Ultra and Natural Light, which are also seeing a fall in sales. Before the backlash, Natural Light was gaining due to cost-conscious consumers opting for cheaper six-packs.
Companies like Target are now facing criticism from gay rights groups for insufficient support for the community. In June, New York Attorney General Letitia James had also called the company's move "wrong" and urged the retailer to reverse its decision.
Even workers at dozens of U.S. Starbucks (NASDAQ:SBUX) locations held strikes in June after the union representing the company's baristas alleged that managers had banned Pride-themed decor.