After more than two decades as America’s best-selling beer, Bud Light has slipped to second place.
Modelo Especial, a Mexican lager, overtook Bud Light in US dollar retail sales for the month ended June 3, according to Nielsen data analyzed by Bump Williams Consulting. Modelo controlled 8.4% of US grocery, convenience and spirits sales; Bud Light fell to 7.3%.
Grupo Modelo, the Mexican brewery, is owned by Anheuser-Busch InBev, the same parent company as Bud Light.
It’s a milestone in Bud Light’s month-long sales slump since early April, when critics, angered that the brewery was sending a commemorative tin to transgender influencer Dylan Mulvaney, vowed to boycott the brand. Bud Light has also faced backlash from Mulvaney’s fans, who feel the brand hasn’t done enough to support them.
Dave William, vice president of analytics and insights at Bump Williams, said Bud Light has been the top-selling US beer since 2001 and may retain that crown this year. He noted that Bud Light’s 9% year-to-date market share still surpasses Modelo’s 8%. And Bud Light sales volumes are higher.
But Modelo seems to have the edge, with its dollar sales rising by double-digit percentages every week. The introduction of a new light beer, Modelo Oro, in May also increases brand awareness.
Sales in bars and restaurants, which are more difficult to track, are not included in the retail numbers, and Bud Light far outperformed Modelo in those establishments prior to April. However, David Steinman, vice president and editor-in-chief of Beer Marketer’s Insights, said that sales at Modelo’s bars and restaurants have been growing rapidly, and Bud Light is believed to have seen sales drop even more sharply in bars and restaurants than in grocery stores.
Bud Light retail sales in the US fell 24% in the week ended June 3, while Modelo Especial sales rose 12%, according to Dave Williams.
Scott Scanlon, executive vice president of alcohol market consultancy Circana, said Mexican imports like Modelo and Corona have been the biggest bright spots in the otherwise sluggish U.S. beer market for years.
When Modelo first launched in the U.S. in the 1990s, it was primarily aimed at Hispanic drinkers, Scanlon said. The company launched English language ads in 2015 and since then has significantly expanded its customer base. It’s particularly popular with younger drinkers who like its fuller flavor, Scanlon said.
Scanlon said Modelo is already a top seller in markets like Los Angeles and Chicago but still has plenty of growth to see on the East Coast.
“Modelo should become the No. 1 beer brand. It was destiny because the growth numbers we are seeing and seeing are amazing,” Scanlon said. “The only question was time.”
Scanlon said the pandemic has accelerated Modelo’s U.S. sales as the company derives a larger portion of its sales from retail stores than from bars and restaurants. And Bud Light’s missteps further accelerated his rise.
Constellation Brands, a Rochester, New York-based company that has held a license to sell Modelo in the United States since 2013 under an agreement with antitrust authorities following InBev’s acquisition of Grupo Modelo, announced Wednesday that it was increasing its marketing spend for Modelo has nearly doubled in the past five years and continues to see a “airstrip for growth” in the US, but Bud Light will try to counteract that.
Last month, InBev announced that it will triple its marketing spend in the US this summer, with a focus on sports and music festivals. Bud Light also continues to be a high profile sponsor of LGBTQ+ Pride events.
“For the year, Bud Light remains the number one brand nationally in the United States by volume and sales,” an Anheuser-Busch spokesman said Wednesday.