Packs of Modelo Especial beer are for sale at a grocery store in Los Angeles, California, on June 14, 2023.
Mario Tama | Getty Images
Modelo cans have become a staple at Rio Riojas family and community events in Lansing, Michigan.
The 35-year-old often chooses the brand in grocery stores or bars. The beer, in his words, has become “synonymous” with gatherings ranging from small hangouts to birthday parties.
“It’s definitely the people’s decision,” said Riojas, a stand-up comedian. “If you're at a quinceañera and you see everyone you know at the table enjoying a few beers, it's usually going to be a modelo.”
Riojas is part of a base of Hispanic consumers that has become a go-to destination Constellation Brands' Beer store, which also includes products such as Corona and Pacífico. What the company describes as an authentic relationship with this group of buyers has driven demand – and is one of the reasons Modelo has become the best-selling beer brand in the United States
Recent data illustrates how Constellation has advanced in the broader market by focusing on Latinos.
Hispanic and Latino customers accounted for 32.5% of Constellation Brands' sales in 2023, according to data from consumer research firm Numerator and investment bank Jefferies. That's despite the group making up just 19.5% of the American population that year, government statistics show.
The continued loyalty of these buyers is partly responsible for Modelo maintaining its spot as the top-selling U.S. beer by dollar share, the company said. Modelo eclipsed Bud Light for the first time last year Anheuser Busch-owned brand faced backlash after its marketing campaign that featured a transgender influencer.
“Hispanic consumers are the most important consumer group for our beer business,” said Mallika Monteiro, executive vice president and general manager of Constellation’s beer brands. “It has been the foundation of how we have been able to drive growth over the last 14 years.”
The “fighting spirit”
Constellation's connection to these brands began with imports into the United States from Mexico. The company officially acquired Groupo Modelo's U.S. beer business, which included Modelo and Corona, from Anheuser-Busch in 2013.
These brands have a natural appeal to Hispanics because of their roots in America's southern neighbor, said Alexandra Aguirre-Rodriguez, an associate professor at Florida International University's business school. But Constellation's marketing and social responsibility efforts have helped the New York-based company maintain that relationship over time, she said.
Constellation's Monteiro said the emphasis on the Hispanic community is anchored in the company's focus on building a diverse workforce. The company is also touting a multi-year donor relationship with UnidosUS, considered the largest Hispanic-focused civil rights organization in America.
With marketing rights in the U.S., Monteiro said Constellation has focused on an “authentic” representation of these brands as Mexican imports. After several years of advertising in Spanish-language programming, she said the company has also expanded its Modelo marketing campaigns to English-language media in recent years.
A popular spot focused on the role of “abuelas,” or grandmothers, in caring for and feeding their families. An ad released this year highlighted the work of California women building low-rider cars.
Modelo's slogan, “Fighting Spirit,” provides positive media representation specifically for Hispanics, said FIU's Aguirre-Rodriguez, whose research focuses on the intersection of identity and branding. It could also resonate more widely with immigrants who come to America in search of a better life or their descendants — regardless of their country of origin, she said.
“You see again and again that there is a strong emotional connection between consumers and brands,” said Aguirre-Rodriguez. “The self is a very important part of consumer decision making.”
“A good sign of culture”
That connection can help Constellation weather a difficult economic environment defined by a “picky” consumer, according to Jefferies analyst Kaumil Gajrawala.
Gajrawala said Constellation could be expected to run into trouble as consumers face economic challenges such as inflation and high interest rates. But he said the company is in a better position than others in a similar position.
That's because the Hispanic base, because of their loyalty, will likely reduce their spending elsewhere to continue buying boxes of Modelo or Corona, he said.
“The company is more resilient than it appears,” he told clients in June.
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Constellation wasn't completely immune to the economic headwinds. CEO William Newlands said on the company's earnings call earlier this month that a rise in Hispanic unemployment could help explain weakness in the second quarter.
Possible tariffs on imports are another overhang for the company before the presidential election. But Tom Fullerton, a professor at the University of Texas at El Paso who focuses on commerce in America, said consumers should continue to spend in these circumstances, even though they would likely see price increases as a result.
Constellation is one of several companies vying for Hispanics' attention as their financial strength becomes more apparent. A study released last month found that if U.S. Latinos were an independent country, they would have the fifth-largest gross domestic product and second-fastest-growing economy.
Looking ahead, Constellation expects a recovery in Hispanic employment, which should bode well for spending. On the business side, Monteiro said the company is expanding into flavors that resonate particularly well with this group, such as the Modelo Agua Fresca line, which she said is inspired by drinks found at Mexican street markets.
At a recent Riojas family gathering, a decorated tray featured Modelo cans of finger food and shrimp. Participants were able to use these ingredients to create a “Michelada,” a cocktail that typically mixes Mexican beer with juice and toppings.
A michelada tray.
Courtesy: Rio Riojas
For Riojas, a box of Modelo has also become an essential gift at events. He said the company's commitment to enhancing Hispanic heritage has resonated in his community.
“It was great to see us represented,” he said. “It's definitely a good sign of culture and a good representation of our 'fighting spirit'.”