Constellation Shines Bright

October 22, 2021
Constellation Brands has harnessed simplicity, authenticity and consistency to secure their place as a top supplier in the industry
 
A peaceful night, a whistled carol and a palm tree illuminated with colorful lights – Corona’s iconic “O Tannenpalm” ad has signaled the beginning of the holiday season for over 30 years.
 
“The longevity of Corona’s ‘O Tannenpalm’ spot can be attributed to its simplicity, as well as the consistency of our authentic brand message over the years,” says Ann Legan, Vice President of Brand Marketing, Corona. “The [O Tannenpalm] spot is a testament to the resilience and cultural resonance of the Corona brand.”
 
Simplicity, authenticity and consistency are the watchwords of not only Corona, but also of Modelo, Pacifico and Corona Hard Seltzer. By staying the course, the company has crafted a portfolio of some of the biggest and most beloved brands in the segment. Constellation Brands has the third-largest market share of all major suppliers in the country and is showing consistent growth, with net sales growing 14% in Q2 of this year.
 
Constellation’s Brightest Stars
 
Corona has reigned supreme in beer for years – especially in our region, where it ranks #2 in total beer sales. In 2021, Corona once again earned the title of most valuable beer brand from global brand valuation consultants Brand Finance, and consumers continue to rate Corona as the #1 most loved beer brand in the U.S. It’s all thanks to their premium products and consistent, fun marketing, from the Snoop Dogg bobbleheads that Philly locals found irresistible to the iconic “O Tannenpalm” spot. This year, the holiday spot is supported by Corona’s Feliz Navidad campaign, which encourages consumers to “Unwrap and Unwind” with Corona. And this fall, Corona Extra’s 12 oz. can packages will be transitioning to slim cans to reinforce the premium nature of the brand and align with other Corona can offerings.
 
While Corona continues to dominate in the import category, Modelo Especial has quietly become the #2 most popular beer in America and the #1 import, leading some to call the beer a “sleeping giant.”
 
Greg Gallagher, Vice President of Brand Marketing, Modelo says, “The brand was built over many years with our core Hispanic drinkers, who appreciate the brand’s authenticity.”
 
Hispanic drinkers continue to represent more than half of Modelo’s volume, and the brand is still growing volume, penetration and buy rate with this demographic. However, Modelo has seen significant brand share gain with non-Hispanic consumers as well, growing sales by more than 25% over the past 2 years, proving that Modelo’s message of the Fighting Spirit has universal appeal across consumer groups.
 
“Modelo continues to have tremendous runway,” says Gallagher, “and we’ve only just begun to tap the brand’s potential with general market drinkers.”
 
Modelo and Corona continue to lead the way in terms of dollar sales, but don’t forget small yet mighty Victoria, which Brand Finance named the strongest beer brand of 2021, based on metrics evaluating marketing investment and business performance. As the official beer of WWE’s tentpole event, SummerSlam, Victoria can only grow stronger.
 
And Pacifico, Constellation’s Mexican pilsner-style beer beloved by Gen Z, is posting numbers that show that the brand is one to watch.
 
“When you look back at the growth trends and how Modelo Especial got started [and] you look at the trends of what Pacifico’s doing… they look pretty similar in terms of how the brand is developing,” Constellation CEO Bill Newlands told Beer Business Daily. “We think this has potential to be our next big brand. [Pacifico] almost crosses over into that sort of pseudo-craft space as a brand.”
 
Reaching New Heights with ABAs
 

Constellation has also made forays into categories beyond import lagers, while staying true to their roots. In 2013, it launched Modelo Chelada, an RTD single inspired by the michelada, a Mexican beer cocktail. The line has taken off in the convenience channel, especially Mango y Chile, a top 10 c-store SKU which was up 175% YTD in July

 
“Modelo Cheladas are built on cultural relevance and authenticity and appeal to a young, multicultural consumer base with strong purchasing power,” says Gallagher. “And while our drinkers skew Hispanic, our Cheladas appeal to non-Hispanic buyers because consumers everywhere are looking for authentic experiences and new flavors.”
 
Corona has also launched several ABAs (alternative beverage alcohol) offerings in recent years, including Corona Refresca, a full-flavored, slightly sweet malt beverage that will receive a renewed focus. Corona Hard Seltzer, launched in 2020, quickly posted impressive sales thanks to its tropical flavors. And 2021 saw the launch of Corona Hard Seltzer Limonada, a variety pack that offers consumers an authentic Mexican take on hard seltzer.
 
“With Refresca, Hard Seltzer and Limonada, our goal was to build on [Corona’s] authentic Mexican heritage,” Legan says. “Corona is known for being refreshing, and Refresca, Hard Seltzer and Limonada deliver flavors that show consumers we’re playing in the hard seltzer and FMB space, but in a way only Corona can.”
 
Constellation plans to further capitalize on flavor by introducing singleserve 24 oz. cans of Corona Hard Seltzer Pineapple and Corona Hard Seltzer Limonada Strawberry in November, not to mention the much-anticipated Modelo Cantarito, a 100-calorie lager made with real grapefruit, orange and lime juice in March of 2022.
 
Selling Beer in the Digital Age
 
The company is focused on supporting sales with a three-tiercompliant eCommerce strategy. With consumers fully embracing the convenience of online shopping, establishing an industry-leading online presence is a top priority for Constellation.
 
“Winning in eCommerce is an investment made to differentiate Constellation’s brand portfolio with the consumer,” says Wayne Duan, Vice President eCommerce. “After all, we want to ensure our brands are worth reaching for no matter how the consumer shops: in real life or digitally.”
 
U.S. consumers spent $710 billion on digital commerce last year – up 18% – totaling 15% of all retail sales nationally. According to Constellation, the beer category is leaving nearly $1 billion in retail sales on the table by leaving digital commerce underdeveloped. And that’s not even accounting for the influence of eCommerce on in-person retail sales. Consumers are increasingly using online resources to research a product before purchasing, and Constellation estimates that by 2023, 30% of food and drink sales will be digitally influenced and that by 2027, digitally influenced sales of beer could be worth $25 billion.
 
Constellation is determined to be a world-class, three-tier-compliant eCommerce organization. Part of the project includes an eCommerce “center of excellence” to track consumer insights, particularly among Hispanic consumers. When completed, this effort will nearly triple the company’s sales and marketing capabilities.
 
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