Modelo Especial has become the best-selling beer in the nation — at the expense of Bud Light after its Dylan Mulvaney fiasco — thanks to shrewd marketing and rising brand recognition, the company’s distributor said.
In less than a decade, sales of Modelo have more than tripled to 187 million cases in 2022 as the lager went from one consumed primarily by Latinos in California to mainstream America, according to Financial Times.
This week, the Mexican beer, which is owned by Constellation Brands in the US, surpassed Bud Light in annual sales after the latter’s disastrous tie-up with the trans influencer led to backlash and boycotts of the Anheuser-Busch brand.
Executives at Constellation credit Modelo’s rapid growth to a campaign that helped bring the beer to the mainstream.
Jim Sabia, an executive vice president at Constellation, told FT that in the early 2010s, Modelo’s core customers were Mexican Americans living in California.
In 2016, however, it launched its first-ever English-language national ad campaign that was centered around its slogan, “Brewed for those with a fighting spirit.”
The Modelo commercials feature rags-to-riches narratives of Latino athletes and ordinary citizens — played against the backdrop of the song “The Ecstasy of Gold” by Ennio Morricone.
The song was featured in the famous Clint Eastwood western “The Good, The Bad, and The Ugly.”
Founded in 1925, Modelo grew in popularity in the Mexican domestic market before becoming the best-selling beer in the 1980s.
By 2000, it had more than 60% market share in Mexico.
It then entered the US market with the advent of the North American Free Trade Agreement in the 1990s.
Ironically, Modelo was acquired by Bud Light’s parent company, Anheuser-Busch InBev, in a 2012 deal valued at $20 billion — the largest ever in Mexico at the time.
But antitrust regulators stepped in and forced Anheuser-Busch InBev to sell Modelo’s US operations to Constellation for $4.75 billion.
Now Modelo is ascending at the expense of Bud Light, which had long held the dominant position as the nation’s best-selling beer.
Bud Light has seen its sales figures plummet in the wake of boycott calls that followed Mulvaney’s social media posts touting the beer.
Sabia told FT that Modelo got a boost from the Bud Light backlash as the Mexican beer benefited primarily from the empty retail space left behind by the Anheuser-Busch brand.
Modelo had an 8.34% share of dollars spent on beer compared to 8.28% for Bud Light through Aug. 12, NIQ reported — the first time the brand has beaten Bud Light on a year-to-date basis.
Sabia told FT that he believes Modelo would have eventually overtaken Bud Light within two to three years even without the Mulvaney controversy.
“We’re not getting a lot of Bud Light drinkers into Modelo,” Sabia said.
“They are staying in the mainstream segment.”
Constellation Brands, which also makes Corona Light beer, topped Wall Street expectations for first-quarter earnings thanks to higher pricing and steady demand for its alcoholic beverages.
Constellation’s beer business posted an 11% increase in sales in the quarter that ended May 31, mainly on strong growth across Modelo Especial, the Modelo Chelada brands as well as Corona Extra.