Constellation Brands Reaps The Benefits Of America’s Thirst For Mexican Beer

Numbers don’t lie and Mexican beer imports are growing in the US, even as the sales of classic American brands continue to slow.

Here’s the deal…

According to data from IRI Worldwide sales of overall imports increased by 8.4% in 2017 and about 70% of that growth was driven by Mexican Beers.

And it’s not like domestic Big Beer brands aren’t still dominant in the US. After all, premium beers like Bud, Coors, and Miller still command almost 40% of US sales. But those once unassailable premium brands saw sales in dollars erode by 2.9% in 2017, again according to information from IRI.

Craft beers and domestic ultra-premiums, (notably Michelob Ultra), are still attracting American consumers in 2017 with revenue up 5.6% and 11.3% respectively. And with IRI data showing craft beers holding 12% of the market and ultra-premiums at 7%, it takes the combined strength of both to roughly equal the sales power of imports.

That’s an especially advantageous situation for drinks giant, Constellation Brands, which bought the US rights to Mexican megabrands Corona, Modelo, Victoria, and Pacifico as part of a $4.8 billion deal back in 2013.

Since that deal in 2013, Constellation has watched as “sales of brews from south of the border surged 44 percent, even as domestic beer sales dipped 3.5 percent,” according to Mother Jones, who also note that the Victor, New York-based company’s beer brands now “account for about 1 in 11 brews sold in the US.”

Riding the wave that is Mexican imports and the benefits of increased pricing in some US markets, the company saw its beer sales up 10% in the fiscal year which ended at the end of February. And according to Motley Fool, Constellation‘s “first-quarter results were equally bright, with 11% growth.”

So what’s behind America’s growing love affair with Mexican beer besides distant memories of spring breaks in Cancun?

Obviously America’s growing Hispanic population plays a part in the growing popularity of Mexican beers in the US. As does the brand’s stories, which hint at tropical beaches or memories of vacations past…

But whatever the factors Constellation Brands is now riding that wave of success.

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