Monday, May 20, 2024

Mexico’s Modelo brand becomes top-selling beer in US

Mexico’s Modelo Especial beer became the top-selling brand in the United States in May, with an 8.4% share of U.S. retail sales.

In a four-week period ending June 3, the incumbent, Bud Light, fell off the top spot for the first time in more than two decades after the beer’s owner Anheuser-Busch became embroiled in controversy. Its share of the U.S. retail beer market fell to 7.3%. 

A customized Modelo can in the United States
Constellation is the licensed brewer and distributor in the U.S. for Grupo Modelo brands, including Corona and Modelo. The diversification of the Modelo brand is seen as key to the success of the beer in the U.S. (@cbrands/Twitter)

U.S. earnings for Modelo Especial beer also grew during the same period by 12.2% over the last month while Bud Light’s earnings fell 24.4%. 

Diversification of the Modelo brand under Constellation’s stewardship in the U.S. — it’s licensed by Mexico owners Grupo Modelo to brew and distribute the brand in the U.S. — is also helping the beer to capitalize on the momentum gained by Bud Light’s downfall.

“Modelo Especial appears to be increasing its sales growth each week as we get deeper into summer,” brand analyst Dave Williams told the media company CNN. He added that the Modelo Oro, a new, low-carb version of Modelo Especial, appears to be a success.

The Mexican beer brand is also benefiting from a trend for Mexican alcohol in the U.S., said Williams. Tequila and mezcal have also seen strong sales in recent months, and the “springboard effect” from strong Cinco de Mayo sales had on Mexican drinks in general has also helped.

Corona, Pacífico, Modelo Especial and other brands owned by Grupo Modelo have increased in price.
Mexican alcohol has increased in popularity in the U.S. across the board — that includes spirits such as tequila and mezcal. (Mario Jasso/Cuartoscuro)

Greg Gallagher, vice president of brand marketing for New York-based Constellation, said that Modelo has been “enjoying an incredible run of success” in recent years and that it’s looking to recreate the success that Modelo traditionally sees with a Hispanic audience in the United States.

“Our growth is in maintaining that core but also bringing in non-Hispanic customers, and we’re having incredible success,” he told CNN.

While some may look to tie Bud Light’s downfall with the brand’s recent controversial advertising campaign — which featured transgender influencer Dylan Mulvaney and angered both sides of the political spectrum — the downturn in its sales also reflect wider issues with the Belgian brewer, which also owns Busch Light, Michelob and Natural Light. 

Mexican beer brands have seen significant growth in the U.S. market in recent years, according to the Washington Post newspaper, which estimates as much as 80% of U.S. imported beer is from Mexico. Even before the Bud Light campaign, Modelo was on track to become the top-selling beer by 2030, the newspaper said.

If current sales trends continue, Modelo is well-placed to end 2023 as America’s top-selling beer brand for the calendar year.

With reporting by CNN and The Washington Post

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