The Rise of Modelo
By 
A decade ago, Modelo wasn’t even a top-10 beer, but it has climbed up the ranks. In 2018, Modelo was America’s seventh-top beer in chain retail by dollars. By the beginning of this year, it was second.
A combination of factors have propelled Modelo forward in recent years, said Garrett Nelson, vice-president and senior equity analyst at CFRA Research, in an email, including “the growing popularity of imported beer brands, demographic changes, Constellation’s capacity growth to meet the demand, and most recently, the demise of Bud Light.”
As more Latino and Hispanic drinkers have reached legal drinking age, their preferences have shifted the overall mix of beer that’s selling in the United States. The country’s growing Hispanic population has boosted Modelo’s growth.
“The Modelo brand over-indexes to un-acculturated Hispanic consumers,” said Vivien Azer, a senior research analyst at Cowen, noting that in 2016 the company said 3 points of its revenue algorithm just comes from growth of the Hispanic population in the US. The Wall Street Journal points out that 70 percent of Modelo’s consumers were Hispanic in its 2019 fiscal year.
It’s also taken off with non-Hispanic consumers, which Constellation told WSJ now represent 45 percent of its base. The website Good Beer Hunting points out that more non-Hispanic households purchase Modelo than Hispanic households, but Hispanics consume more Modelo by volume than non-Hispanics.
Modelo is the top brand in California and in the Chicago, Dallas, and Baltimore metropolitan areas. Mexican import beers, specifically, have done well in recent years, while imports from other countries have not. As the New York Times notes, Mexican beer imports to the US doubled from 2013 to 2022, while imports from everywhere else declined.
“For whatever reason, American drinkers really associate Mexican import lagers with beach season, with sort of affordable luxury, with an attractive, active lifestyle, so they get a little bit of a halo there,” said Dave Infante, a beer columnist for VinePair and the publisher of the drinks newsletter Fingers. “There’s some powerful, broad, multi-decade-long trends that are wind at the back of a brand like Modelo, and Constellation has, for the most part, done a good job of making sure they don’t [mess] it up and let it continue to cook and mount in popularity.”
Corona, which is owned by Grupo Modelo, was bigger in the US for much longer and has less novelty with drinkers in the US, Infante said. Modelo also plays better in cans, which consumers prefer when they’re picking up from a store.
Modelo does have a higher price point than beers such as Bud Light, and its success is part of a broader trend of consumers trading up for more expensive brands and a sort of premiumization in the alcohol space emphasizing quality.
Young drinkers are on the hunt for something new, too, which some seem to have found in Modelo. “You hear people say a lot in this industry that no one wants to drink the same beer as their dad did,” Infante said. “It’s cliché because it’s broadly true.”
I mean, if you don’t want to drink the Bud Light your dad did, I can think of a beer better than Modelo….