Anheuser-Busch Shedding Beer Brands Amid Steep Bud Light Losses

Anheuser-Busch InBev (AB-InBev) announced this week that it has struck a deal to sell eight of its craft beer brands to the Canadian cannabis company Tilray Brands. For many, this marks yet another twist in the beleaguered journey of the beer giant, which is still grappling with the aftermath of the Bud Light-Dylan Mulvaney marketing fiasco. The sale cuts a significant swath through AB-InBev’s craft beer portfolio, signaling a possible shift in the industry.

The $85 million deal, expected to close next month, involves the beer brands and their corresponding employees, breweries, and associated brewpubs. The brands in question include Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and Hiball Energy.

For some, there’s a touch of irony to this deal. “We’ve hit a new low, ladies and gentlemen,” a critic commented, referencing the sale of beer brands to a company primarily known for cannabis products. Despite this perspective, there’s no denying that Tilray, with its acquisition of several craft beer companies, is steadily bolstering its presence in the beverage sector. The deal is set to triple Tilray’s beer wing, increasing its output from 4 million to 12 million cases annually.

Irwan D. Simon, Tilray’s CEO, and chairman, has expressed his ambition for the craft brewing industry. He views the acquisition as a way to “solidify our national leadership position and share in the U.S. craft brewing market,” aiming to be a catalyst that re-energizes the craft beer sector. Simon’s words signal a strategic diversification that will set Tilray on a strong footing, especially if and when federal cannabis legalization occurs in the U.S.

Looking back, AB-InBev once shared Tilray’s enthusiasm for craft beer, acquiring numerous smaller brands, including Blue Point. They seem to be retracting from the craft market, reducing their offerings to 12 after this deal. Among the remaining names are Goose Island and Elysian.

The background to this deal is, of course, not free from controversy. Earlier this year, conservative boycotts in the wake of Bud Light’s marketing tie-up with transgender influencer Dylan Mulvaney saw a significant dip in sales.

Modelo, an Anheuser-Busch-owned brand outside the U.S., recently dethroned Bud Light as the nation’s best-selling beer. Consequently, AB-InBev had to back its Bud Light wholesalers with financial support and faced the unfortunate step of laying off 2% of its U.S. workforce.

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