The strategic plan that underpins Modelo’s success dates back to the 1980s.
Modelo Especial’s ascent to the position of top beer in America, according to Jim Sabia, executive vice-president and managing director of Constellation Brands’ beer division, was not a result of chance.
Sabia said, “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.”
Modelo Especial was once predicted to hold the #1 spot in the US beer market by 2025 by Constellation Brands. However, unanticipated events, such as the dropping sales of Bud Light, hastened this projection.
According to Wedbush Securities’ analysis of Nielsen IQ data, Modelo Especial thus gloriously earned the title of top beer in the US beer market in May and has continued to hold that position.
Modelo’s market share increased to 10.7% during the four weeks ending on May 20, 2023, while Bud Light’s share decreased to 9.6%.
Rapid growth of Modelo
Modelo’s rapid growth is attributed by industry observers to a conservative reaction against Bud Light and its parent company, Anheuser-Busch InBev, following their marketing partnership with transgender activist and influencer Dylan Mulvaney.
But over the course of a number of years, Modelo has been progressively gaining market share in the US beer industry. This was long a matter of, if not when, according to Bart Watson, chief economist for the Brewers Association.
Long-term growth has been occurring in these patterns. As the beer industry has changed generally during the previous 10 years, Modelo has been on the increase while Bud Light has been on the decline.
Future supremacy of Modelo
Modelo Especial now dominates the US beer market, and experts in the field believe that it will continue to expand faster than its rivals.
With Modelo already surpassing Bud Light, Gerald Pascarelli, senior vice-president of stock research at Wedbush Securities, predicted that Modelo’s growth will likely continue to be greater.
At this moment, there is really no scenario in which Bud Light would reclaim the top spot.
When Constellation Brands imported Modelo, Corona, and other Mexican beer brands into the US in the 1980s, they realized the promise of Modelo Especial.
“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,” says Greg Gallagher, vice president of brand marketing for Modelo at Constellation Brands. Not a phase, this. This is not a passing fad. It has a lengthy history of enduringly strong growth. So, we’ve demonstrated that we can carry this out over time.
Success of Mexican beer is overwhelming
Mexican beer has slowly gained in popularity in the US. Beyond Modelo, several brands have established themselves.
The following are the overall sales and market rankings for Mexican beer brands for the 12 weeks ending on July 15, 2023, as reported by NielsenIQ and Wedbush Securities:
- Modelo Especial: $1.02bn
- Corona Extra: $571.6m
- Pacifico: $97.9m
- Dos Equis: $96.6m
- Coronita Extra: $80.2m
- Corona Familiar: $72.3m
According to data from the Beer Institute, Mexico is by far the largest exporter of beer to the US, with imports from Mexico more than tripling between 2013 and 2023.
SOURCE: Retail Insight Network
PHOTO CREDIT: Mario Tama/Getty Images