At the start of June, Modelo made up 8.7% of retail beer sales in the United States. That figure made it the new top-selling beer in the country.
How did it rise to the top? In recent years, Americans have been demanding more expensive beer, like craft and imports. In addition to the changing preferences, the country’s demographics have been affecting the beer and spirits category. With an ever-growing Hispanic population and an interest in Mexican products like tequila and mezcal, Modelo, headquartered in Mexico, has been well-positioned for growth.
As reported in The New York Times, “In an earnings call last month, Bill Newlands, the chief executive of Constellation Brands, which owns Modelo, told investors that the beer’s rise to the top had happened ‘sooner than we anticipated.’ Constellation’s beer business reported an 11 percent sales increase and a 7.5 percent increase in shipments for the quarter that ended May 31.”
The United States imports more beer from Mexico than it does from any other country, by far. The Netherlands is in the No. 2 spot but exports seven times less than what Mexico delivers to the States. According to the New York Times, Mexican beer imports doubled from 2013-2022 while imports from everywhere else decreased more than 25%.
“The biggest growth in Mexican beer sales over the past year has been in states closer to the Canadian border, which tend to have lower Hispanic populations, while growth in states closer to Mexico has lagged, according to one Nielsen IQ analysis of on-premise sales,” the Times notes.
Jim Sabia, head of Constellation’s beer division, told the Times that marketing the product has involved balancing remaining authentic to its Hispanic base while inviting in new drinkers. Its first English-language campaign occurred in 2016.
Nadine Sarwat, an analyst at Bernstein Autonomous, told the Times that younger drinkers tend to want something new or different, and usually more expensive, than the previous generation. This trend partly explains how Bud Light became the top beer in sales twenty years ago, passing Budweiser.
Bud Light, for its part, remains the top-selling beer by volume.