Despite recent struggles at Bud Light’s parent company, Anheuser-Busch, billionaire investor Bill Gates has invested nearly $100 million in the beer maker.
A former executive of the brand simply warned that it was a “mistake”.
“Bill Gates is definitely making a mistake,” said former Anheuser-Busch executive Anson Frericks. “Earlier this year, he already made a $900 million mistake by investing in one of Anheuser-Busch’s biggest competitors, Heineken. He did it earlier this year. And since that investment, Heineken is down about 10%, while the broader markets are up 10%.
“So if I was looking for investment advice from software or technology vendors, I might go to Bill Gates. But if you look at the beer industry, it doesn’t have a great track record of investing in winners at this point,” he added during “Cavuto: Coast to Coast” on Wednesday.
The Bill and Melinda Gates Foundation Trust, which manages funds for the foundation the Microsoft co-founder still runs with his ex-wife, bought 1.7 million shares of Anheuser-Busch last quarter, according to a regulatory filing. . The transaction is valued at $95 million.
The Gates purchase comes amid financial difficulties for the company after a controversial Bud Light marketing campaign sparked a boycott by some conservatives. Bud Light has also drawn ire from LGBTQ activists for not doing more to defend its decision.
Sales took a hit. Anheuser-Busch InBev reported a sharp drop in profits following the boycott, with revenue down 10.5% in the United States in the second quarter, while profit before tax, interest and depreciation fell 28.2%. The company has laid off hundreds of workers due to the fallout.
Bud Light lost its 22-year reign as the top-selling beer in the United States on an annual basis last month when Mexican lager Modelo Especial became the top-selling beer of 2023 after beating Bud Light. in terms of sales for months.
According to Frericks, given the company’s recent struggles to resonate with its core consumers, Bill Gates isn’t “necessarily” going to connect with the “everyday” beer drinker.
“For the good of the company, they’d probably be better off (with) maybe someone who’s more of a regular kind of person, maybe like a Rob Gronkowski or someone like that who invests in Anheuser- Busch, not necessarily someone like Bill Gates, doesn’t really resonate with that regular guy who drinks Bud Light beer daily.
The executive criticized his former employer, in particular for putting politics ahead of shareholders and consumers.
“They haven’t made it clear yet who they’re brewing their beer for,” he said.
Anheuser-Busch did not immediately respond to Fox News Digital’s request for comment.
A fervent critic of woke politics in business, Frericks is also co-founder and chairman of Strive Asset Management. The company emphasizes acting in the sole interest of shareholders rather than being drawn into environmental, social and corporate governance (ESG) investments.
Bud Light and parent company Anheuser-Busch are still deciding what kind of company they want to become, Frerick says.
“There is a camp that says Anheuser-Busch has a fiduciary responsibility to its shareholders and that it should simply strive to provide excellent products and service to its shareholders. This is the camp I find myself in,” he said.
“There is another camp, BlackRock, State Street, Vanguard, that would lead Anheuser-Busch to focus more on stakeholders and on stakeholder capitalism, not necessarily focusing on shareholders, but on activists, political organizations, etc.”.
Since the fallout from the Dylan Mulvaney campaign, Anheuser-Busch has been working to reconnect with customers by drawing on football, country music and other quintessential American favorites in its new ad campaigns.
As Frericks notes, Anheuser-Busch executives have yet to “come out and say who they’re going to focus on, who they’re going to serve going forward.”
“Is it just going to be about serving good cold beer, and playing football and having barbecues in the garden for customers? Or will they get involved in these political issues?
Anders Hagstrom, Breck Dumas and Joe Toppe of FOX Business contributed to this report.
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