Barron’s associate editor Jack Hough, commenting during a recent appearance on Fox Business about the current Bud Light situation, particularly its being dethroned as the number 1 beer by Modelo Especial, explained to the audience why Modelo Especial dethroned the brand.
Beginning, Hough noted that Modelo taking the number one spot is somewhat surprising, even if it makes sense that Bud Light is no longer number one given the extent of the Dylan Mulvaney scandal and resulting backlash and boycott. Speaking on that, he said, “Everybody kind of figured Bud Light was getting hit by that boycott so that fell out of number one. If I told you that the new top-selling brand is Mexican, you might be surprised. If I told you it’s Mexican and not Corona … who would’ve thought Modelo Especial?”
Hough then noted that there are two main factors to blame for Bud Light’s loss at the hands of Modelo. One is that Modelo Especial is, particularly after the Dylan Mulvaney scandal, preferred by the Hispanic drinking age population in the US, and that population is growing rapidly. So, that demographic ditching Bud Light for Modelo makes a big difference in sales figures.
The second reason that Hough noted is premiumization, which is the process of emphasizing one brand’s superior quality and exclusivity over other, competing brands. Though Modelo is mass-produced like Bud Light, Corona, and other beers it is beating out, it, much like Stella Artois, has a reputation for being the premium beer and so is gaining at the expense of the other brands.
He also noted the general irony of the situation, saying that it is somewhat ironic that Europeans own a famous American beer and that beer is being dethroned as America’s favorite beer by a Mexican beer regarded as an American beer. In his words: “There’s an irony here. This is an American beer icon, Bud Light, but it’s been European-owned for 15 years.… An American beer icon that is technically European has been dethroned by a Mexican brand that is arguably American.”
However, Modelo Especial is also owned by Europeans, as it is distributed by Constellis Brands in the United States but is owned, like Bud Light, by Anheuser Busch InBev. That is because of an anti-trust suit that led to AB InBev having to shed Modelo in the US.
And Modelo Especial isn’t the only beer brand that has gained at Bud Light’s expense in recent weeks. While Bud Light’s sales are down nearly 25 percent compared to the same period in 2022, Modelo is now the number 1 beer, sales of Coors Light are up by 25.8 percent, and sales of Miller Lite are up by 21.4 percent.
The Bud Light boycott began in the beginning of April, when Bud Light sent Dylan Mulvaney a branded, commemorative can for a commercial meant to highlight the brand before the March Madness playoffs. Mulvaney’s face on a Bud Light can was too much for most people, and that sparked a boycott of epic proportions that has seriously dented the brand.
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