How Mexican Beer Conquered The American Beer Market
By 2018, Modelo had become the top-selling imported beer in the US, eventually becoming the top-selling beer overall in 2023.
Early Days of Beer Imports
The US beer market has had a tumultuous history with influences from import trends, wars, prohibition, and local breweries. After prohibition ended in 1933, Heineken was the first imported beer to reenter the American market. By the 1970s, the import market had begun to grow, making up nearly 3% of the entire beer market.
Grupo Modelo's Entry into the US Market
The success of Heineken sparked interest in Grupo Modelo, a brewing company from Mexico. They sought to penetrate the expanding American beer market with their brands, particularly Corona. Their strategy, leveraging the rise in disposable income and glamorization of spending in the 1980s, paid off with rapid sales growth and a leading spot in top-selling imports.
Challenges and Recovery
In 1987, a false rumor that Corona's golden beer was actually employee urine significantly hurt their sales. By the 1990s, the rumor had faded and Corona introduced Corona Light, coinciding with the popularity of light beer in the US. The introduction of their iconic TV commercials also boosted their image, leading to Corona overtaking Heineken as the top-selling import in the US by 1998.
Major Takeovers and Antitrust Suit
Anheuser-Busch acquired a stake in Grupo Modelo in 1993, and the stake was transferred to AB InBev after a merger in 2008. In 2012, AB InBev announced its plan to acquire the remaining 50% of Grupo Modelo, which led to an antitrust suit by the US Justice Department. To avoid further legal trouble, AB InBev decided to sell the US rights while retaining the global rights.
Constellation Brands' Acquisition
Constellation Brands stepped in to buy the US rights for $4.75 billion, even though they had not been in the beer business before 2013. They had been a distribution partner with Grupo Modelo, laying a strong foundation for beer import and sale in the US. Part of the deal was also the purchase of Nava, one of the world's largest breweries.
Rise of Modelo
With the acquisition complete, Constellation set their sights on growing Modelo, particularly targeting the everyday beer market led by Bud Light. Their plan, which involved sports sponsorships, English advertisements, and a new slogan, worked tremendously well. By 2018, Modelo had become the top-selling imported beer in the US, eventually becoming the top-selling beer overall in 2023.
This is a summary of Morning Brew's YouTube video.