Dear Client:
Yesterday, we reported how Modelo Especial now joins Bud Light with a cheek on the top seat in convenience, as each brand held 10.6 dollar share of the channel in the latest four weeks of NielsenIQ data to April 22.
As stated in yesterday’s issue, it’s plausible that Especial could nudge Bud Light out of the top position in convenience dollars in year-end data — but we find any other unseating of Bud Light in the off-premise far-fetched.
Data supplied by Bump Williams Consulting to BBD suggests Bud Light losing its no.1 position in total off-premise this year is an unlikely scenario as well. Read on…
Looking at current Bud Light trends, one might suggest that anything is possible… Who could have predicted the brand would be down this much in mid-April?
The brand’s dollar trends are down 23% for the week ending April 22 in NielsenIQ xAOC data (which excludes convenience & liquor outlets) provided by BWC.
There aren’t any bright spots for Bud Light regionally over the week either. Take a look:
- New England dollar sales were down -14%
- Mid Atlantic down -19%
- Pacific down -18%
- West South Central down -22%
- East North Central down -23.5%
- East South Central down -25%
- West North Central down -25%
- South Atlantic down -25%
- And Mountain down -29%
Yet despite these haunting numbers, Bud Light dollars are down only 3% YTD.
To lose its grip on total off-premise that YTD number would have to get significantly worse for Bud Light, and Modelo Especial’s growth would have to see quite an uptick as well.
Indeed, BWC’s Dave Williams crunched the numbers on this exact exercise, showing: “If Bud Light declined every week for the rest of the year at -15% and Modelo grew every week for the rest of the year at +15%, final CY 2023 $ sales would be about 1:1 between the brands.”
If Bud Light ended the year down 16% and Modelo jumped 16% over the year, then “Modelo finishes the year with a +$50-60MM advantage over Bud Light,” writes Dave.
“Now, Modelo Especial is up ‘only’ +8% through YTD 2023 while Bud Light is currently down -3%, so it would take a lot to pump up Modelo growth rate to those levels & Bud Light would have to maintain its current rate of decline for the remainder of the year for this to come true…so those numbers aren’t impossible, just unlikely.”
MODELO TESTING FULL-FLAVORED SPIKED AGUAS FRESCAS IN LAS VEGAS
Indeed, Modelo is on the up and up. The brand is piloting a new extension, having just announced to the public a “regional test” of Modelo Spiked Aguas Frescas in Las Vegas — launching with the help of TikTok influencer, Juixxe.
Constellation describes the Modelo Aguas Frescas brand as “a new line of vibrant and flavorful spiked malt beverages that celebrate the bold, fruit-forward taste of authentic aguas frescas found in Mexican street markets, with a twist.” (They probably feel pretty emboldened to test this beyond beer take on Modelo, having recently won against ABI’s claims that STZ violated their sub-license agreement to only use Modelo and Corona as cerveza.)
FULL FLAVORED, FULL CAL. But rest assured, these are not “light” products, but rather, they are full flavored. Constellation tells BBD their research pointed them in this direction, as flavor drives 71% of ready-to-drink beverage choices.
The 4.5% ABV new offerings run 171-197 calories, featuring a “non-carbonated taste experience,” with 20-25 grams of sugar, depending on flavor (Piña, Sandia, Pepino y Limón and Flor de Jamaica).
Modelo Spiked Aguas Frescas are available in 12 oz. 12-pack variety packs in tests. The Piña flavor is also available in a 24 oz. can.
The FMBs are brewed in Mexico alongside the full Modelo portfolio.
THE NEXT BIG THING BEYOND VEGAS? Probed on possible expansion, the company tells BBD that they’ve so far gotten “positive feedback from both consumers and retailers” in Vegas. “If this success continues throughout the test, we will evaluate expanding its availability nationwide in 2024,” Constellation told BBD.
As they monitor performance, “we’ll consider Modelo Spiked Aguas Frescas as our next innovation platform for the Modelo brand, driving adoption with our core Hispanic consumers as well as General Market consumers who are seeking authentic cultural experiences and reaching for full-flavored beverages.”
PARTNERSHIP WITH JUIXXE. The debuting brand has partnered with online influencer Jesus Morales, also known as “Juixxe, a changemaker known for gifting hundreds of thousands of dollars to street vendors who struggled during the pandemic, to honor the roots of its new product.”
Modelo “flew and hosted the merchants in Las Vegas to be among the first to try the new beverage – that they helped inspire – at the Modelo Spiked Aguas Frescas launch celebration.”
Greg Gallagher, VP of Modelo brand marketing, says the partnership honors Modelo’s Mexican heritage.
“Through our partnership with Juixxe, Modelo Spiked Aguas Frescas recognizes and celebrates street vendors for perfecting the beloved flavors and taste experience that inspired our new brand.”
PLUS, PLANS FOR CINCO. The company also shared some Cinco de Mayo plans for the larger brand.
“Modelo and Mexican Actor Jaime Camil Team Up to Inspire Fans to ‘Cinco Auténtico’ with Virtual Modelo Mercado and ‘Museum of Cinco’ in Los Angeles.” The “Cinco Auténtico” campaign returns to “spotlight Mexican traditions, artistry and culture, and help fans authentically celebrate Cinco de Mayo.”
NEW CAMPAIGNS COMING DOWN THE PIKE FROM PACIFICO AND VICTORIA
Speaking of the upcoming holiday: Constellation Brands has unveiled a couple new campaigns for its Pacifico and Victoria brands just in time for Cinco.
The new Pacifico campaign will aim to encourage environmental preservation, while the Victoria campaign centers on celebrating Mexican culture. Let’s dig in on each:
For Pacifico, the brand has partnered with the National Park Trust to support lesser-known U.S. national parks with a $250,000 donation. The initiative, dubbed Pacifico Parks Less Traveled, aims to reduce the impact of overpopulation on popular parks by raising awareness of lesser-known destinations. The program includes a directory of less-visited parks, a social media sweepstakes offering a $10,000 adventure, and content from influencer partners who have visited these parks.
Meanwhile, Victoria has partnered with leading Mexican band Grupo Firme for their 2023 United States tour, Hay Que Conectarla. The partnership will “elevate” the concert experience for fans and offer a sweepstakes for a trip to see the band perform live. Victoria is also launching a new ad campaign titled “Tu Victoria Está Aquí” (“Your Victory is Here”), targeting Spanish-language beer drinkers and celebrating the journey of Mexican immigrants in the U.S.
ANHEUSER-BUSCH Q1 CALL: “MOBILIZING GLOBAL RESOURCES” TO SUPPORT U.S. TEAM
And now back to Bud Light.
Early in Anheuser-Busch InBev’s Q1 call Q&A yesterday, chief Michel Doukeris was asked, of the U.S. Bud Light backlash:
“Can you offer any thoughts, reflections on how this happened, what you’ve learned … and now that we’re here, what are you going to do about it?”
That was the call’s central focus, of course.
BUD LIGHT “PULLED INTO A DISCUSSION.” Michel’s answer?
“To start, we need to understand the current environment and especially social media landscape, and how consumer brands, especially big brands with significant reach, can be pulled into a discussion like this one,” said Michel, adding that Bud Light is “certainly not the first brand that was put in a situation like that.”
A CAMPAIGN TO SQUASH CONFUSION. His “key learning?” That beer will always be on the table “when important topics are debated,” but “itself should not be the focus of the debate.” As for “moving forward”: “One challenge is … the ‘misinformation’ and ‘confusion’ that still exists. We will need to continue to clarify the facts: That this was one can, one influencer, one post — and not a campaign. And repeat this message for some time.”
MOBILIZING GLOBAL RESOURCES TO SUPPORT U.S. TEAM. “But as we do that we are more focused on leveraging our global experience and mobilizing our global resources to support the U.S. Team as we move forward.” Then, too “we have adjusted and streamlined our marketing structure so the most senior marketers are more closely connected to every aspect of our brands.”
He repeated their move to triple Bud Light summer media investment, as well as “investing more, together with our wholesalers, in our local markets,” as BBD has reported.
PRESSURE STARTING TO EASE? TOO EARLY TO TELL THOUGH MICHEL NOTED SOME VAGUE “STABILIZATION.” Later another analyst asked if there’s “any sign” in A-B’s “closer-to-real-time data” that the “pressure is starting to ease,” in what this analyst characterized as the “Bud Light Feeding Frenzy.”
“I think that’s still too early for us to understand the duration and the total impact,” said Michel, who said they “look at the same public data that you look” at. But: “we also see day after day …. we can see on the days that there is some stabilization.” He didn’t substantiate that “stabilization” any further, but rather reiterated that the U.S. Bud Light volume dip seen in the first three weeks of April would account “for like 1% of our global volume in this period.”
Another caller inquired after any “spillover impact beyond Bud Light.”
“The public available data shows some spillover effect across the other brands while the majority of the impact is still on Bud Light,” he said. He noted their continued commitment “to the programs, partnerships, investments that we have in place,” and their “key programs and campaigns for the brands.” However they’ve “streamlined” their structure so that the top marketers are closer to the brands’ activities.
“So in this situation and given the current environment — especially for the social media landscape — we have senior marketeers running the programs; we have a strong plan for the year.”And he repeated their promise to “heavy up” investments, “now during the summer across all brands, as original part of our plans, but also we are heavying up the investments on Bud Light as we reallocate global resources and we invest more on Bud Light.”
Later Michel was pressed on the nature of that re-allocation. He explained: “Our plan for the summer in the U.S. was already a very strong plan. And the triple the media idea is versus what we had last year,” he said, explaining that they already had a plan to be “more connected” in the summer season (versus, for example, spending more to be the exclusive bev alc sponsor of Super Bowl).
FURTHER INCREASE INVESTMENTS WE HAVE IN US. “And now we are using resources that we have, that we are using for other brands and other priorities, to further increase the investments that we have in the U.S. And because we have many lines in the P&L, right — not only sales and marketing –we are mobilizing lines across the P&L as well, and media does not make a hundred percent of the sales and marketing investment of any of our brands anywhere globally.”
TRUTH SQUADDERS SOUND OFF. It’s worth noting here: In our ongoing summer wholesaler survey (more details to come soon–very enlightening, lots of responses), our final question – probing “other comments or concerns of the day” – was often met with Bud Light commentary. Note, these have been pouring in both before and after A-B earnings, and for context, 40% of respondents so far are A-B wholesalers, while 46% identify as MC wholesalers. Some of these comments could have come from either camp. A smattering:
We have all been witnessing the power – and destructiveness – of social media in the context of a society so divided and sensitized on social issues. Very disturbing.
Very frustrated with the lack of communications/response from AB. This has been a tsunami for Bud Light and having negative results for other AB brands. AB is apologizing and giving our employees free beer but not responding/stating their position for our consumers in the midwest.
Bud Light disaster – AB gave away their core consumer. Significant percentage will not come back. No cost, no campaign for competition (MC, Constellation, Craft , wine and spirits) to have millions of consumers try competitive products.
Recent events have supercharged the need for portfolio diversification.
I told our team in the wake of the Bud Light storm. When you throw sh:! You get some on you and what Paul says about Peter often says more about Paul than it does about Peter.
“Other than the quality of our products, the only thing we have is each other.” August III
Put adults back in the room in NYC where marketing decisions are being made. Nobody over 40 would EVER support making a blue collar American heartland brand dive into politics.
The Bud Light issue will be studied for years to come in marketing classes as a worst case scenario and demonstrate how big brands need to do a better job of managing their marketing/influencers.
We were poised to have best year ever till April 1st
AB is shooting from the hip on their response to the crisis they created. Unfortunately they keep hitting their own foot.
Things were already slowing down in the first quarter then the Bud Light deal really hurt us in April.
Bud light gate will cost Abi wholesaler for next decade, some will not recover
LAST CHANCE: PLEASE TAKE OUR 5-MINUTE SUMMER WHOLESALER SURVEY. BBD wholesaler subscribers, please fill out this QUICK and ANONYMOUS survey benchmarking key trends and expectations as we head into the summer season. We will publish the results in the next week or so. We’ve already gotten some fascinating responses — if your organization hasn’t participated, please make your voice heard.
BREWPIC: Modelo Spiked Aguas Frescas is piloting in Las Vegas.
Until Monday,
Harry, Jenn, Jordan, Bianca
“It usually takes more than three weeks to prepare a good impromptu speech.” – Mark Twain
———- Sell Day Calendar ———-
Today’s Sell Day: 5
Sell days this month: 23
Sell days this month last year: 22
This month ends on a: Wed.
This month last year ended on a: Tues.
YTD sell days Over/Under: 0
