Prime Highlights:
- Michelob Ultra has overtaken Modelo Especial to become the best-selling beer in the U.S.
- The shift marks a comeback for AB InBev, after losing ground when Bud Light was unseated two years ago.
Key Facts:
- AB InBev’s stock has risen over 16% this year, while Constellation’s shares have dropped 39%.
- Constellation Brands cut its sales forecast, expecting a 2–4% decline due to lower volumes and tariff impacts.
Key Background:
Michelob Ultra has claimed the top spot as the best-selling beer in the United States, surpassing Modelo Especial, according to recent data from Circana. The light lager, produced by Anheuser-Busch, also ranks as the leading beer in bars and restaurants, Nielsen IQ reports for the 52 weeks ending July 12.
This milestone marks a significant turnaround for AB InBev, whose flagship Bud Light lost its long-held position two years ago following controversy over a marketing partnership. At that time, Modelo Especial unseated Bud Light, ending its more than two-decade dominance in the U.S. beer market.
Modelo’s decline comes amid challenges for its brewer, Constellation Brands. The company has faced tariffs on aluminum and Mexican imports, as well as weakening demand from Hispanic consumers, a historically key segment for Modelo. Hispanic beer drinkers have traditionally made up roughly half of Constellation’s customer base. Executives say that economic and policy issues, like job losses linked to immigration rules, have reduced spending among these consumers.
Even with these challenges, Modelo’s growth was previously supported by increasing demand from non-Hispanic consumers. However, Constellation recently revised its fiscal year forecast, expecting net beer sales to fall between 2% and 4% due to lower volumes and the impact of tariffs. The company had earlier projected flat to slightly increased sales.
AB InBev’s stock has risen more than 16% this year, showing confidence in Michelob Ultra’s success, while Constellation’s shares have dropped 39% due to worries about falling sales.
The success of Michelob Ultra demonstrates that the American population is altering its taste in beer, and the brands should follow. In the case of AB InBev, it is a comeback to challenges encountered in the past, whereas in the case of Constellation, it is struggling to bring its core customers back.
As people’s preferences keep changing, experts expect more competition among big beer brands, making the race for the top spot closely watched in the U.S. beverage market.
