MODELO
Produced by Constellation Brands Inc., Modelo has one key thing in common with Michelob Ultra: It’s more expensive than the mainstream market leaders. On average, Modelo costs about 25 percent more than Bud Light or Coors Light, and that’s appealing to customers who want to trade up, according to Jim Sabia, chief marketing officer at Constellation.
Modelo’s sales have more than doubled since Constellation, which has distributed the label in the U.S. for years, took ownership in 2013. They hit $5.22 billion last year, including the darker Negra Modelo, according to Euromonitor. That comes as Constellation has tripled the marketing budget for the brand, pushing it beyond its core Hispanic base to a national audience, including with advertisements during National Football League games. About 50 percent of Modelo’s growth in recent years has come from increased distribution, according to Sabia.Especial has posted double-digit growth each year since arriving in the U.S., according to the company.
When President Donald Trump was elected, in part on this promise to cut down on illegal immigration from Mexico, there was concern about a consumer backlash against Mexican brands. That hasn’t materialized for Modelo, which saw sales jump more than 20 percent last year. The company is getting a boost from demographic trends, as the Hispanic population, which drinks about 70 percent of the Modelo consumed in the U.S., continues to grow.
While the company has been advertising on Spanish-language television for about a decade, it only started running English ads in the past three years. Like Michelob Ultra, Modelo has been taking share from the market-leading brands as it reaches more consumers beyond its traditional core Hispanic customer.
“That’s why we’re so bullish on the brand,” said Greg Gallagher, Modelo’s vice president of brand marketing.
This article was provided by Bloomberg News.