Modelo beer, a popular Mexican lager in the United States, has an interesting ownership structure that might surprise many beer enthusiasts.
In the U.S., Constellation Brands owns the brand license for Modelo with exclusive rights to import, market, and sell the beer. However, outside the United States, Modelo belongs to a different company altogether.
Outside the U.S., Modelo is owned by Anheuser-Busch InBev, the same parent company that owns Bud Light. This split ownership happened when AB InBev purchased Grupo Modelo in 2012, and the Justice Department required them to sell the U.S. rights to prevent monopoly concerns. This decision has led to an interesting market situation where the same beer brand competes against itself under different corporate umbrellas.
The beer has seen tremendous growth in recent years, even surpassing Bud Light as America’s top-selling beer in certain periods. This success shows how complex beer ownership can impact market performance and consumer preferences.
Key Takeaways
- Constellation Brands owns Modelo in the United States with exclusive and perpetual rights to the brand.
- Outside the U.S., Anheuser-Busch InBev (AB InBev) owns Modelo through its acquisition of Grupo Modelo.
- Modelo has achieved significant market success, becoming one of America’s top-selling beer brands despite its dual ownership structure.
History of Modelo
Modelo beer has an interesting journey from a small Mexican brewery to becoming one of America’s most popular beers. Its ownership has changed hands several times throughout its nearly century-long existence.
Founding and Early Years
Modelo was established in 1925 in Tacuba, Mexico by a group of entrepreneurs including Pablo Díez Fernández. The founders had a clear vision – to create a “model” beer using traditional German brewing techniques.
The brewery aimed to craft a premium product that stood out from other Mexican beers of the time. They brought in skilled German brewmasters to help develop their recipes.
Modelo Especial, their flagship product, was created to be a perfect balance between flavor and refreshment. This pilsner-type beer quickly became popular in Mexico.
During these early years, the company operated as Grupo Modelo, establishing itself as a quality beer producer in the Mexican market.
Expansion and Growth
As Modelo gained popularity in Mexico, the company looked to expand its reach. The beer began to cross borders, particularly moving into the United States market.
In a significant development, Constellation Brands acquired the rights to distribute Modelo in the United States. This partnership helped introduce the Mexican beer to American consumers on a large scale.
The brand continued to grow through the late 20th century and into the 21st century. In 2012, a major change occurred when Anheuser-Busch InBev (AB InBev) acquired Grupo Modelo.
However, due to antitrust concerns, AB InBev had to sell the US rights to Modelo to Constellation Brands. This is why today, Modelo is brewed by Grupo Modelo (owned by AB InBev) in Mexico, but distributed by Constellation Brands in the US.
Ownership Structure
Modelo’s ownership has changed hands over the years through several corporate deals that have shaped its current structure. The brand operates under different ownership depending on geographic location, with major corporations having significant stakes in its global distribution.
Grupo Modelo’s Merger and Acquisitions
Grupo Modelo, the Mexican brewing company behind Modelo beer, has a complex ownership history. The company was founded in 1925 and remained under Mexican ownership for decades. In 2013, however, it underwent a major change when Anheuser-Busch InBev (AB InBev) acquired Grupo Modelo in a deal worth approximately $20.1 billion.
This acquisition brought Modelo under the umbrella of AB InBev, a Belgian multinational drink and brewing company that is one of the world’s largest beer producers. The deal faced regulatory challenges in the United States due to competition concerns.
To address these concerns, AB InBev had to make significant concessions. The company agreed to sell certain assets to ensure the deal would be approved by regulators who were worried about potential monopolistic control of the beer market.
Role of Constellation Brands
When AB InBev acquired Grupo Modelo, U.S. antitrust regulators required a special arrangement for the American market. As a result, Constellation Brands owns the Modelo brand in the United States, while AB InBev maintains ownership in the rest of the world.
Constellation Brands paid approximately $4.75 billion for the U.S. rights to Grupo Modelo’s beer portfolio, including Modelo and Corona. This deal gave Constellation the exclusive rights to import, market, and distribute these Mexican beer brands in the U.S.
This arrangement has proven extremely profitable for Constellation Brands. In fact, Modelo has grown significantly under Constellation’s management in the U.S. market, recently achieving a milestone when it surpassed Bud Light as America’s top-selling beer in 2023.
Current Ownership Overview
Today, the ownership structure of Modelo follows a dual system. Outside the United States, Grupo Modelo is owned by AB InBev, and its ownership ultimately ties back to AB InBev’s shareholders.
In the United States, Constellation Brands has exclusive rights to the Modelo brand. This separation of ownership by geography is unusual in the beverage industry but was necessary to satisfy antitrust concerns.
Despite having different ownership in different markets, Modelo maintains consistent brand identity worldwide. The beer continues to be brewed in Mexico, preserving its authentic Mexican heritage and brewing traditions.
AB InBev remains one of the world’s largest brewing companies with a diverse portfolio of global beer brands, while Constellation Brands has benefited greatly from the growth of Mexican import beers in the U.S. market.
Brands and Products
Modelo offers a variety of beer products that have gained popularity in the U.S. market. The brand has established itself with distinctive flavors and packaging that appeal to many beer enthusiasts.
The Modelo Brand
Modelo is a well-known Mexican beer brand with significant presence in the United States. In the U.S., Constellation Brands owns the brand license for Modelo, making it part of their impressive beer portfolio. This licensing arrangement has helped Modelo achieve remarkable success in the American market.
The brand has recently gained even more attention after Modelo Especial surpassed Bud Light as America’s top-selling beer. This milestone occurred despite both Modelo and Bud Light having connections to Anheuser-Busch InBev globally.
Modelo’s marketing typically emphasizes its Mexican heritage and quality ingredients. The brand often uses the tagline “Brewed with a Fighting Spirit” in its advertising campaigns.
Varieties of Modelo Lager
Modelo offers several popular lager varieties that cater to different taste preferences:
Modelo Especial: This is the flagship product – a rich, full-flavored pilsner-style lager with a crisp, clean finish. It’s typically sold in distinctive gold-foil wrapped bottles.
Modelo Negra: A darker Munich Dunkel-style lager with slow-roasted caramel malts for a slightly sweet, medium-bodied taste.
Constellation Brands has been expanding the Modelo lineup with innovations like Modelo Oro, a light beer option with 90 calories, and Modelo Especial Chelada varieties that blend beer with tomato, salt, and lime.
The brand also offers seasonal and limited-edition releases that have helped broaden its appeal beyond traditional lager drinkers.
Market Presence
Modelo has established itself as a powerhouse in the beer industry with significant reach both in the United States and globally. The brand has experienced remarkable growth in recent years, changing the competitive landscape of the beer market.
Domestic Market Dominance
Modelo has achieved something remarkable in the US beer market. In a major milestone, the Mexican lager beat Bud Light to become America’s top beer. This is particularly interesting since both brands have connections to the same parent company, though their US ownership differs.
In the United States, Modelo is owned by Constellation Brands, not Anheuser-Busch InBev. This ownership structure resulted from regulatory requirements when AB InBev purchased Grupo Modelo in 2012.
The brand has built strong loyalty among American consumers. Its marketing strategy often emphasizes Mexican heritage and authenticity, which has resonated well with diverse customer groups.
International Reach
Outside the United States, Modelo’s global presence is managed differently. Anheuser-Busch InBev controls the Modelo brand in international markets as part of its acquisition of Grupo Modelo.
This dual ownership creates an interesting market dynamic. The brand benefits from AB InBev’s elaborate global distribution network while maintaining its distinct identity in different regions.
In Mexico, Grupo Modelo maintains significant operations and cultural importance as a national brand. The company continues to brew its products locally, preserving traditional brewing methods.
Modelo has expanded its reach to numerous countries across Latin America, Europe, and Asia, adapting its marketing approach to suit different cultural preferences while maintaining its Mexican identity.
Modelo’s Business Performance
Modelo has shown impressive growth in the market. They became a dominant player in the beer industry through strategic acquisitions and strong sales performance.
Financial Highlights
Modelo has experienced significant financial success in recent years. The brand has shown remarkable growth, even dethroning Bud Light to become the top-selling beer in the US. This achievement marks a major milestone for the Mexican beer brand.
The financial value of Modelo became especially evident when Anheuser-Busch InBev acquired the company in 2013 for a substantial $20.1 billion. This acquisition highlighted the brand’s market worth and potential for future growth.
Constellation Brands, which owns the U.S. licensing rights to Modelo, has seen tremendous success with the brand. Their portfolio of Mexican beers, including Modelo, Corona, Victoria, and Pacifico, has been described as “on fire” in terms of market performance.
Strategic Business Moves
One of Modelo’s most significant business decisions came through antitrust requirements. When AB InBev sought to acquire Grupo Modelo completely, they were required to sell Modelo’s U.S. business due to competition concerns.
This led to Constellation Brands acquiring the U.S. rights to Modelo, which proved to be a brilliant strategic move for both companies. Constellation has leveraged these rights to build Modelo into a market leader in the United States.
In global markets, AB InBev has continued expanding Modelo’s reach. They appointed Anheuser-Busch as the importer of Modelo brands in China, showing their commitment to growing the brand internationally.
After completing their combination with Grupo Modelo, AB InBev owned approximately 95% of Grupo Modelo’s outstanding common shares, fully consolidating it into their business structure.
Corporate Responsibility
Modelo’s parent companies demonstrate their commitment to social and environmental initiatives through various programs. These efforts focus on sustainability practices and meaningful community engagement projects.
Sustainability Efforts
Modelo, through its parent company Anheuser-Busch InBev, has embraced several sustainability initiatives. The company has committed to reducing environmental impact across its brewing operations.
These efforts include water conservation programs in their brewing facilities. They’ve also implemented energy efficiency measures to reduce carbon emissions throughout their production processes.
Packaging sustainability is another focus area, with initiatives to increase recycled content in bottles and cans. The brand has set ambitious goals to reduce waste and increase recyclability of their products.
Their brewing facilities have also incorporated renewable energy sources to decrease reliance on fossil fuels. This shows a long-term commitment to environmental stewardship within their business model.
Community Engagement
Modelo has demonstrated a strong commitment to giving back to communities. During the COVID-19 pandemic, Modelo committed $500,000 to #FirstRespondersFirst. This supported healthcare workers on the frontlines.
The brand’s parent company, Constellation Brands, has incorporated these donations as part of broader COVID-19 relief efforts. This shows their dedication to supporting essential workers during crisis situations.
Modelo’s parent company AB InBev has launched the Global Smart Drinking Goals initiative. This initiative is aimed at reducing alcohol harms by 10 percent. This demonstrates their commitment to responsible consumption.
The brand also supports various community development programs in regions where they operate. These include educational initiatives, economic development projects, and disaster relief support when needed.
