The potential of a pair of Constellation Brands‘ Mexican beer brands in the US is still to be recognised with the group’s CEO admitting to trying “not to be giddy”.
Late last week, Constellation, which owns the Modelo portfolio of beers in the US, posted a 3% lift in sales from the 12 months to the end of February. In a subsequent conference call, CEO Bill Newlands warned that the company’s beer business, which grew its 12-month sales by 10%, still has a brace of other future success stories outside of the Corona beer brand.
When asked about Modelo Especial, Newlands said he sees “no end in sight for its double-digit growth profile”. While the beer established itself in the US by initially targeting Hispanic consumers, Newlands noted: “When you think about the penetration increasing in the non-Hispanic community by 25% over the last couple of years, we’re barely scratching the surface.
“We really only started to advertise outside the Hispanic community over the last few years. The upside, we think, is tremendous.”
Two years on from describing Pacifico as an “up-and-comer”, Newlands last week said there is “much to be excited about” for the brand.
“Consistently, we’re seeing four-week trends in IRI [for Pacifico] that are up in the 30-plus per cent range,” he told analysts on the call. “The core business in Southern California continues to do extremely well and it’s developing across the country. Again, we’re really just scratching the surface of building out with this brand.
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“[Investor relations senior VP] Patty [Yahn-Urlaub] always warns me about being too giddy, but it’s tough not to be giddy when you look at some of the results around Pacifico.”
Just over 70% of Constellation’s group sales come from its beer division, which is present exclusively in the US.