Michelob Ultra has officially surpassed Constellation Brands' Modelo Especial to become the best-selling beer in the United States. This significant milestone was announced by parent company Anheuser-Busch on Monday, referencing data from Circana. The light lager not only leads in retail channels for the 52 weeks ending September 14 but also reigns supreme in bars and restaurants, as shown by Nielsen IQ data for the same period ending July 12.
For AB InBev, the success of Michelob Ultra marks a remarkable turnaround from the challenges faced just two years ago. The brand's success is particularly noteworthy given the backdrop of Modelo Especial's rise, which had previously dethroned Bud Light amid a conservative backlash against the flagship beer's collaboration with transgender social media influencer Dylan Mulvaney. Until then, Bud Light had held the title of the top-selling beer in the U.S. for over two decades.
Despite its earlier success, Modelo Especial has recently experienced a decline in popularity. This downturn coincides with several key challenges facing Constellation Brands, such as tariffs on aluminum and Mexican imports, as well as a noticeable decrease in demand from Hispanic consumers. Historically, Hispanic beer drinkers have comprised nearly half of Constellation's customer base. However, a growing interest from non-Hispanic consumers has also played a crucial role in boosting Modelo's sales.
Executives at Constellation Brands have pointed to the impact of former President Donald Trump's immigration policies and the resulting job losses as significant factors affecting the spending habits of Hispanic consumers. In fact, just earlier this month, Constellation revised its fiscal year forecast, indicating a challenging economy ahead. The company now expects net beer sales to decline by 2% to 4%, attributing this decrease to lower sales volumes and additional tariff-related impacts. This is a notable shift from earlier projections, which anticipated sales would remain flat or increase by up to 3%.
As of this year, AB InBev has seen its stock price climb over 16%, reflecting the positive momentum generated by Michelob Ultra's success. In stark contrast, shares of Constellation Brands have struggled, plummeting by 39%. This stark difference in stock performance highlights the shifting landscape of the U.S. beer market and the growing dominance of Michelob Ultra.
