Jim Sabia, executive vice-president and managing director of Constellation Brands‘ beer division, has clarified that Modelo Especial’s rise to become the number one beer in America was not a stroke of luck.
Sabia asserts: “The fact that we became the No 1 beer in America due to a competitor’s moves is not accurate. We’ve planned on becoming the No 1 beer in America over the next couple of years; it just happened quicker than we anticipated.”
Constellation Brands had originally projected that Modelo Especial would secure the top position in the US beer market by 2025. However, this prediction was expedited by unforeseen circumstances – Bud Light’s declining sales.
In May, Modelo Especial therefore triumphantly claimed the title of the leading beer in the US beer market, a position it has maintained according to Nielsen IQ data analysed by Wedbush Securities.
For the four weeks ending on 20 May 2023, Modelo’s market share had surged to 10.7%, while Bud Light’s share dwindled to 9.6%.
Modelo’s swift ascent
Industry analysts attribute Modelo’s swift ascent to a conservative backlash against Bud Light and its parent company, Anheuser-Busch InBev, following their marketing collaboration with transgender activist and influencer Dylan Mulvaney.
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But Modelo had been steadily gaining ground in the US beer market over several years. As Bart Watson, chief economist for the Brewers Association, has commented: “This was long a matter of, if not when.
These trends have been building for a long time. Modelo has been on the rise and Bud Light’s been on the decline as we’ve seen overall shifts in the beer market in the last ten years.”
Modelo’s future dominance
As Modelo Especial stands firmly atop the US beer market, industry experts predict that its growth will continue to outpace that of its competitors.
Gerald Pascarelli, senior vice-president of equity research at Wedbush Securities, stated: “Now that Modelo has overtaken Bud Light, the growth for Modelo likely will remain stronger.
There’s really no scenario at this point where you would see Bud Light regain its No 1 position.”
Constellation Brands foresaw Modelo Especial’s potential as early as the 1980s when they were the US importer for Modelo, Corona and other Mexican beer brands.
Greg Gallagher, vice-president of brand marketing for Modelo at Constellation Brands, proudly notes, “We introduced Modelo Especial into the US in 1982, and it has grown double digits in 37 of 41 years, which is kind of incredible. This isn’t a phase. This isn’t a flash in the pan. This is a long history of significant steady growth. So we’ve proven we can do this over the long term.”
Mexican beer’s resounding success
The popularity of Mexican beer in the US has been steadily on the rise. Beyond Modelo, multiple brands have made their mark.
According to NielsenIQ and Wedbush Securities, the overall sales and market rankings for Mexican beer brands in the 12 weeks ending on 15 July 2023 are as follows:
- Modelo Especial: $1.02bn
- Corona Extra: $571.6m
- Pacifico: $97.9m
- Dos Equis: $96.6m
- Coronita Extra: $80.2m
- Corona Familiar: $72.3m
Mexico stands out as the largest supplier of beer to the US, with beer imports from Mexico more than doubling between 2013 and 2023, according to data from the Beer Institute.
Constellation brands: unrivalled in Mexican imports
Among Mexican beer imports, Constellation Brands maintains an unassailable position. As Gerald Pascarelli notes: “Constellation Brands is kind of the only game in town when you look at core Mexican imports. They are very much a unique brand just given that they have the two largest Mexican imports in the United States.”
Data from Circana reinforces this dominance, revealing that Constellation’s sales account for 92.5% of dollar shares in the entire Mexican import category.