USA: Craft and Mexican beers are US beer industry’s best stories
Heading into Cinco de Mayo, craft beer and Mexican beer brands are the U.S. beer industry’s best stories — and Constellation Brands knows that all too well, MarketWatch reported.
Before 2013, however, Constellation Brands Inc. didn’t brew a drop of beer. Sure, its Crown Imports subsidiary has had exclusive U.S. distribution rights to the Grupo Modelo brands — including Corona, Modelo, Negra Modelo, Pacifico and Victoria — since 2007 and had been distributing them in the Western U.S. since buying Chicago-based distributor Barton Beers in 1993. However, Constellation — a Victor, N.Y.-based purveyor of beer, wine and spirits — hadn’t produced a beer of its own until after the Department of Justice ruled that Anheuser-Busch InBev’s NV’s 2013 purchase of Grupo Modelo for $20.1 billion violated U.S. antitrust laws.
Constellation was awarded the U.S. rights to the Grupo Modelo brands and, after sealing a $4.75 billion deal with AB InBev in June 2013, began producing beer for the U.S. market at a facility in Nava, Mexico. By the middle of 2015, with a whole lot of help from Constellation’s beers, Nielsen noted that Mexican beer sales made up 7.8% of all U.S. beer sales by volume. Though their 10.2% growth from the same period a year earlier matched that of U.S. craft beer, Mexican brands’ cut of the beer industry was greater than craft’s 7.6%.
However, with the former Grupo Modelo brands succeeding, Constellation Brands’ brewery in Nava expanding, the entire operation growing to a second brewery in Mexicali and the revenue piling up, Constellation decided to see what it could do with craft beer as well. In November, it announced plans to buy 20-year-old San Diego brewery Ballast Point for a staggering $1 billion. That was a whole lot to throw at one craft brewery, but Heineken NV — whose Dos Equis and Tecate Mexican lager brands already square off against Constellation in the import category — set that bar when it bought half of Lagunitas Brewing Co. of Petaluma, Calif., for a reported $500 million just a few months earlier.
Like Heineken, Constellation Brands saw a few more similarities between Mexican and craft brands than just market share and growth. Untappd, a free mobile app that allows users to “check in” the beers they’re drinking and receive alerts about where their favorites are being sold, has 3 million users who tend to favor craft beer brands. However, Untappd co-founder Greg Avola sent over data from the last year showing that, even with those craft leanings, Corona Extra was checked in nearly 205,000 times compared with 222,000 for Ballast Point’s Sculpin IPA.
“Usually our users are centered around craft, but the top checked-in beers on Untappd are usually Bud Light or Coors Light and all the macro beers,” he says. “It’s all about availability, right? It’s about where the beers are available and the bigger beers are global.”
Also, as Avola notes, that doesn’t account for the seasonal differences between Mexican beers and their U.S. lager or craft competitors. In December and January, Avola says the Mexican brands scarcely register a blip, whereas during the summer their numbers jump significantly. During the past 52 weeks, for example, the Constellation and Heineken beer brands were checked in just 45,000 times in January. In May of 2015, they were checked in 108,000 times. Even during their second-most-popular month in July, the Mexican brands were checked in only 78,000 times.
“It’s an almost 30% increase from July and it jumps almost 50% from April to May and only decreases around 30% from May to June,” Avola says. “Summer’s obviously a big time for these brands with the warmer weather and Corona’s always marketing toward the people who are in their bathing suits and on the beach.”
Unsurprisingly, these brands also benefit heavily from climate change. Last fall, when unseasonable temperatures lead the National Beer Wholesalers Association to point out a slight decline in seasonal craft beer sales, the sale of Mexican brands surged. While Untappd check-ins for Mexican brands fell from nearly 41,000 after Labor Day’s last hurrah in September 2014 to roughly 37,500 in October, they swelled to 51,000 amid September 2015’s warmer temperatures and held at nearly 45,000 in October.
Even better for the folks brewing them, the Mexican brands don’t necessarily feel out of place or out of season when they drift into those fall months, either. Though the same can’t be said about the malty harvest ales and pumpkin ales they’re competing with, Untappd notes that they’re making a strong argument for craft seasonals to be considered a year-round — if not especially fresh — proposition.
“Over the last couple of years, we’ve noticed that seasonal releases of [craft] beers tend to come out earlier and stay on later,” Avola says. “Putting out a beer earlier in a season is keeping it on later. Southern Tier, for example, will put out a pumpkin beer in July and nobody will be drinking it in July, but they’ll be drinking it in January and February the following year a lot more than they have in prior years.”
Meanwhile, U.S. craft has been just as curious to discover Mexican brands’ secret. Mexican beer traces its roots to Hernán Cortés in the 1500s, but takes its current cues from the Germans and Austrians who arrived during the Second Mexican Empire under Maximilian I in the 1800s. The Vienna malt that gives Vienna Lagers including Negra Modelo and Dos Equis Amber their hue also helps make Mexican lagers slightly sweeter than their German- and Czech-influenced U.S. counterparts.
That’s exactly the flavor that Longmont, Colo.-based Oskar Blues goes after when it brews its Beerito, what San Francisco’s 21st Amendment seeks when it cans El Sully and what Milwaukee’s Lakefront Brewing attempts to replicate when it made its Evan “Mexican-Style Dark Lager.” Granted, there is no one particular “Mexican style” — though one could argue that “Vienna Lager” could use some renaming here on the continent — and even those craft knock-offs aren’t indicative of some of the more creative beers coming out of Mexico today. But there is enough passion among the fan bases of both traditional Mexican brands and craft beers that neither small brewers nor larger firms can really be blamed for trying to bring the two together.
05 May, 2016
