The controversy over transgender influencer Dylan Mulvaney helped Modelo Especial overtake Bud Light as America's No. 1 beer, but the Mexican lager's rise is no fluke. Its mainstream success was years in the making.
Recently claiming the title of top-selling beer for the second month in a row, Constellation Brands' Modelo Especial built a large following with a strong marketing presence and an appeal to younger, more diverse beer drinkers.
"They've spent the last 20 years building credibility, and that's recognized by consumers," said Bob Lachky, former chief creative officer at Anheuser-Busch.
Meanwhile, sales of Anheuser-Busch InBev's Bud Light have been shrinking for years. Then in April, after a Bud Light promotional video posted by Mulvaney, sales plummeted amid calls for a boycott, including from some prominent celebrities. Bud Light saw more backlash when its vice president of marketing, Alissa Gordon Heinerscheid, tried to explain the goal of inclusivity by saying, "Bud Light has been kind of a brand of fratty, kind of out-of-touch humor."
Weeks later, the controversy is still resonating, as Modelo Especial continues to build momentum.
Arena Liquor in St. Louis hasn't restocked Bud Light since Memorial Day weekend, employee Joseph Gates said. Several customers turned to other light beers. One who used to buy three cases of Bud Light a week now purchases Coors Light, Gates said.
"People don't like people telling them an agenda," Gates said. "People are saying, 'Beer companies should stick to business, not politics.' "
Arena Liquor is now selling out of Modelo "all the time," something the store has never done before.
At Randall's Wines and Spirits in St. Louis, beer manager Dustin Martin was more optimistic. The controversy did not significantly affect Bud Light sales at his location.
"The people who are upset are a vocal minority," he said.
Martin pointed to another competitor, Yuengling beer, which was introduced in Missouri earlier this year, as a hit to Bud Light sales. But when it comes to macro lagers, Bud Light is still Martin's best seller.
"I think Bud Light will be fine," he said.
He acknowledged, though, that Modelo has always been a "great-moving beer."
That's been the case for more than 20 years, and Modelo was already on pace to surpass Bud Light for the top-selling spot. The recent controversy just helped Modelo cross the finish line sooner, said David Steinman, Beer Marketer's Insights executive editor. In fact, Steinman said, Modelo has been one of the biggest growth brands over the past several decades.
'Chugging along'
For the year, Bud Light remains the No. 1 selling beer in the U.S., with 8.7% share of the beer market, according to Dave Williams of Bump Williams Consulting, which analyzes the alcoholic beverage industry. Modelo is sitting at an 8.1% share.
And though Bud Light has been declining in terms of volume sold since 2008, the brand continues to see dollar growth in the U.S., and remains profitable.
"They've been able to manage the volume loss," Steinman said. "That's the way the industry has been working since 2008."
But the numbers point to a clear trend:
— Bud Light sales dropped 28% for the week ending July 1. In the same period, Modelo Especial increased 11%, and the brand was able to claim top-selling-beer status for the past two months.
— Bud Light is down 12% in year-to-date sales, while Modelo is up 8%.
— The number of cases of Modelo sold to retailers grew 15% in the 2022 fiscal year. It was also the No. 1 share-gainer in U.S. dollar sales among beers, according to IRI, a market research company.
Experts say Modelo has benefited from Constellation Brands' focused effort to position it as a premium beer, with a fresh image compared to rivals like Bud Light. It has benefited from the rising Hispanic population in the United States, but has also managed to boost its appeal to wider markets in recent years.
"The growing Hispanic population acted as a tailwind for Modelo to be catapulted into a broader audience," Steinman said.
Lachky said signs of Modelo Especial's success can be traced to Corona, another Mexican beer owned by Constellation. Corona's "vacation in a bottle" campaign, he said, spoke to everyone, not just Hispanic consumers, helping pave the way for all Modelo brands.
"Great products, great packaging, great displays and great strong, consistent advertising," he said.
At Seamus McDaniel's in St. Louis, Modelo sales have risen the past couple of months, while Bud Light sales are down. Though the biggest sellers are Irish beers, bartender Elaine Sciaccio pointed out that Busch, Natural Light and Michelob ULTRA — all of which are manufactured by A-B — are still popular.
Bud Light "sales have gone down but I've not heard anything about it," she said. "We have sold more Modelo as of recently. It might be related."
Martin, of Randall's Wine and Spirits, also noted the market strength of A-B — and the fact that the company benefits from Modelo sales outside of the U.S. Due to an antitrust lawsuit in 2013, when A-B was trying to acquire Grupo Modelo, the company sold Modelo's U.S. business to Constellation and retained control of international sales.
"It's all one big company," Martin said. "You can't avoid giving money to A-B."
