In a music-filled day of presentations accompanied by a band, Constellation Brands Beer Division chief customer officer Bill Renspie compared the company’s two biggest brands – Modelo Especial and Corona Extra – to Bruce Springsteen.
Renspie had just seen Springsteen and the E Street Band in concert two weeks before taking the stage at Constellation’s Gold Network Summit in Las Vegas this week.
“The guy is unbelievable, and the crowd – young, old – crosses demographics, crosses everything. You see grandparents and grandkids. It is truly what you should build a brand against,” he said. “And for us, we’re very fortunate. A lot of people want to attain this, but few do.
“We have the two generational icon brands, the biggest in the industry: Corona and Modelo Especial,” Renspie continued.
As the nation’s No. 2 and No. 4 beer families in off-premise sales, the brands have boosted Constellation to lead the beer category in growth. Last year, the company’s beer portfolio added 34 million case equivalents in incremental shipments (sales to wholesalers), and $684 million in dollar sales growth.
Continuing the musical metaphor, Renspie likened Pacifico and Moldelo’s Chelada line to Taylor Swift, who is “probably the biggest artist right now, and definitely will be a generational icon.”
“All she needs is some time,” he continued.
Modelo Oro, which is about to launch nationally, is a band that’s “practicing in a garage somewhere right now,” Renspie said.
Marketing executives shared 2023 plans for Modelo, Corona, Pacifico and Victoria. Funky Buddha and Four Corners, Constellation’s craft brands, were not mentioned, nor was Two Lane, the lager Constellation produces with country star Luke Bryan.
Modelo: Media Spend +15%, New Creative; Oro is ‘Biggest Innovation Bet This Year’
Not content to rest on Modelo’s laurels as the country’s No. 2 beer brand, Constellation aims to continue to raise consumer awareness, which increased +43% in 2022, VP of brand marketing Greg Gallagher said.
“We have a ton of room to grow and we’ll have to continue to find new ways to attract more drinkers,” he said. “This business is enjoying incredible momentum, but we cannot get complacent. We have to continue to think differently and meet the ever-changing needs in the marketplace.”
To accomplish this, Constellation plans to drive Modelo Especial “to its fullest potential” through a robust national media program, including new ads in its Fighting Spirit campaign; brand pillars in college football, soccer and UFC; and the return of the Modelito 7 oz. bottle package format.
Modelo’s household penetration and buy rate among Hispanic drinkers “exceed our nearest non-Constellation competitors by more than 60%,” Gallagher said. The creative in Modelo’s new commercials reflects this, including an ad featuring a young woman and her grandmother enjoying beers after spending a day making tortillas from scratch for their family.
Modelo has the largest share of voice in national media and the company plans to increase its spend by +15% in 2023, with a heavy emphasis on live sports, which accounts for 75% of its TV spend. Almost 45% of that is invested in NFL and NCAA football. As “the media landscape continues to fragment,” Modelo’s investment in digital/social ads is nearly double what it was two years ago, Gallagher said.
To support Modelo Oro, which will launch nationally this month after succeeding in test markets last year, the company is investing in national TV and digital media with two ads, plus a sampling campaign, out-of-home advertising and point-of-sale merchandise.
“The early data shows the volume is two-thirds incremental and demographic data indicates it resonates strongly with both Hispanic and general market drinkers,” Gallagher said. “Across the board, consumers love the taste of Oro. It blew away all of our active standards of consumer testing and achieved a statistical advantage to Michelob Ultra in willingness to pay more.”
Modelo Oro’s national rollout is “by far, our biggest innovation bet this year,” as it gives Modelo an entrant that can play in the large light beer segment.
“Light beer drinkers make up a huge portion of the category,” Gallagher said. “As a brand with a long history of brewing delicious high-quality lager, we had the opportunity to deliver a light beer not just with less calories, but with more character.”
The Modelo Chelada line is getting a new flavor in Sandía Picante (watermelon with chili peppers), which 80% of consumers surveyed said they were likely to purchase after tasting, Gallagher said.
Last year, the Chelada family sold 20 million cases and accounted for 58% of the small but growing michelada style. To continue its momentum, Constellation is increasing its media investment by +60%, and increasing its spend in English language media by +76%. In addition, Cheladas will be included in Modelo Especial’s sponsorships and retail programming.
Modelo’s foray into beyond beer will continue as the company adds two new markets, Idaho and Montana, for Modelo Ranch Water, which launched in Texas and New Mexico last year. The company is also trialing a line of spiked Aguas Frescas in Las Vegas. Modelo Spiked Aguas Frescaes are available in a 12 oz. can variety 12-pack featuring pineapple, cucumber and lime, watermelon, and hibiscus.
Corona: New Non-Alc for 2023; Renewed Focus on Premier as Lighter Offering
Constellation plans to continue Corona’s momentum through a combination of new products, new faces in its commercials and a renewed push on consumer education for its Premier brand.
Last year, Corona sold 156 million case equivalents, gained share for the third year in a row and was the category’s fourth-largest brand family, VP brand marketing, Corona family Alex Schultz told wholesalers.
“This is an incredible portfolio with significant runway,” she said. “We have the right brands and the right momentum to meet consumers’ needs whatever the occasion.”
Corona’s newest news for 2023 is the introduction of Corona Non-Alcoholic, which Schultz said will be 84% incremental to the portfolio. The company will highlight it during key periods such as Dry January, Sober October, and Seis de Mayo, an invented holiday to keep the festivities going with Corona NA for revelers who fiesta-ed too hard on Cinco de Mayo.
“For consumers seeking balance without sacrificing taste, we’re excited to announce that we will be bringing the fine life to them with the launch in spring of Corona Non-Alc,” Schultz said.
The new offering joins a small but growing segment. In the first two months of 2023, NA beer’s dollar sales increased +32.7% at off-premise multi-outlet grocery and convenience stores (MULO) compared to last year, according to market research firm Circana (formerly IRI). NA beer still accounts for less than 1% of MULO beer category dollars, but reached 2.05% in grocery stores for the period.
2023 will be the “year of Premier,” Schultz said, as Corona Premier – Constellation’s low-calorie, low-carb Michelob Ultra challenger – still has “huge unlocked potential.” Both Corona Premier and Corona Light will be included in all national retail programs, but Premier will receive extra support through media, activation, refreshed packaging and point-of-sale materials as the company has “two key objectives in mind: education and acceleration,” she added.
New commercials, boosted by a +33% increase in media budget, will reinforce Premier’s status as a light beer. Constellation will use relationships with 400 influencers to underscore Premier’s three brand pillars: lifestyle, golf and a partnership with Major League Baseball.
With Premier, the company is hoping to capture some of the $150 million in consumer spending that flowed back to traditional beer from hard seltzer in 2022, Schultz said.
Depletions (sales to retailers) of flagship Corona Extra increased +4% last year, to 123 million case equivalents, and the brand was a top-three contender in 14 markets, Schultz said. Constellation will maintain its No. 2 share of voice on TV, where it broadcasts ads 48 weeks of the year, and increase its investments in streaming ads (+55%) and digital/social ads (+15%). The majority of Corona’s TV ads will run during live sports events.
Corona Extra ads will retain their star-studded roster of spokespeople, including Snoop Dogg, Andy Samberg and Eli Manning, who made an appearance at the summit. New to the lineup this year is award-winning reggaeton singer Karol G.
On-premise, the brand has seen “compounding momentum,” Schultz said. Last year, it was the No. 1 import brand in the channel and grew +33%. The company is focusing on Corona Premier as its key draft offering.
Corona Refresca, the flavored malt beverage (FMB) the company launched in 2019, is being restyled as a hard tropical punch. A new mango flavor will take the place of coconut. Constellation will target Black and Hispanic women with a digital-first campaign titled “Let Flavor Reign.”
For the Corona Hard Seltzer brand, which launched in 2020 and has recorded double-digit declines in dollar sales and volume, the company “will continue to assess our portfolio and make bold decisions to where needed to drive growth,” Schultz said. She asked wholesalers to prioritize the brand’s berry variety pack, which now includes two new flavors: Raspberry Lemon and Blackberry Citrus.
Pacifico: Double-Digit Growth Across the Board in 2022
Pacifico added more than 4 million case equivalents last year, Pacifico and Victoria senior director of marketing Ryan Anderson said. The brand is Constellation’s bridge to millennial and Generation Z drinkers and is “one of the most exciting, distinctive and hottest brands in all of beer,” he added.
In the 52 weeks ending February 26, Pacifico increased off-premise dollar sales +35.2%, to $279.3 million, and case sales by +28.8%, according to market research firm Circana.
“That’s more than double the amount we’ve ever grown in one single year,” Anderson said. “I can genuinely say that every single person in this room is contributing to this momentum, because every single channel was up double-digits. Every single SKU was up double-digits and every single state was up double-digits.”
To build on last year’s growth, Constellation is increasing its marketing spend for 2023 by 65% over its 2021 budget. The brand will focus on its dog-friendly yappy hour campaign and activations involving adventuresome sports such as paddle-boarding and e-biking. Pacifico is debuting a new tap handle this year featuring a rotating anchor to capture drinkers’ attention in the on-premise.
Pacifico is concentrated in the West, where it’s a top six brand in California and has “strongholds” in Colorado and Utah, Anderson said.
Victoria Goes on Tour With Grupo Firme in 2023
Thirteen years after its U.S. debut, Victoria posted “a record-setting year in 2022, accelerating growth by 40% and shattering the 4 million case mark for the first time,” Anderson said.
Victoria is “the only brand in our portfolio entirely focused on Mexican-Americans,” and Constellation is increasing its marketing investment by +25% for 2023, he continued.
The brand’s major activation for 2023 is a partnership with Mexican band Grupo Firme, who will launch a nationwide tour later this spring. The partnership includes visibility at concert venues and will extend to off-premise retail.