Bud Light was the king of beers for a long time in the United States. Sure, its sibling brand, Budweiser, had the formal title, but based on sales, the lighter lager was on top for decades. A couple of years ago, in the face of a cultural firestorm and changing consumer tastes, Bug Light lost its crown. Mexican-made Modelo took its place as the top-selling beer in America in retail, becoming the new rey of beers, if you will. Now, politics may be scrambling the beer space again, and not in Modelo's favor.
To back up a bit, 2023 was tough for Bud Light. That spring, it sent Dylan Mulvaney, a transgender influencer, a handful of beer cans as part of a marketing campaign, and all hell broke loose. The incident sparked an enormous backlash among conservatives, including widespread calls for boycotts. While most of the time, these types of consumer upheavals are ineffectual and short-lived, that wasn't the case for Bud Light. It saw a meaningful decline in sales.
The same year, Modelo surpassed Bud Light as the best-selling beer in the US. While the Bud Light dustup may have accelerated the flip, Modelo's advance had been coming for a while. Bud Light had been experiencing declines for years. Meanwhile, Modelo was growing consistently, riding the wave of growing consumer interest in imported beers and America's growing Hispanic population, which likes Modelo, in particular.
Whereas 2023 was a rough ride for Bud Light, 2025 might be similar for Modelo. The brand is still going strong, but political developments like tariffs and immigration crackdowns may be a blip that could, once again, accelerate ongoing consumer trends in the beer industry. That doesn't mean Bud Light will vault back to the top — one of its sister brands, Michelob Ultra, is giving everyone a run for their money. As Kate Bernot, the lead analyst at Sightlines, which researches the alcohol industry, puts it, "Michelob Ultra has just been quietly doing its thing and killing it."
Dave Infante, who writes a Substack about drinking called Fingers, tells me that given what happened a couple of years ago, the beer industry is likely building in "contingency plans for these major shifts" and steeling itself for more upheaval.
"The industry just saw a major tectonic shift in 2023 and understands that if such a thing happens again with Modelo, opportunities are going to ripple out from it," he says.
Executives at Constellation Brands, the company behind beers such as Modelo and Corona, have been open about the fact that the policies emanating from the White House are creating some serious what-ifs.
First, there are tariffs. While Mexican-made beer isn't being hit with an import tax, the cans it comes in are, thanks to a 25% tariff on aluminum.
"They basically brew all their beer in Mexico and they sell it in the US," Garrett Nelson, an equity research analyst at CFRA Research, says. "Thirty-nine percent of their beer is shipped in aluminum cans, and that's still subject to the 25% tariff."
The industry just saw a major tectonic shift in 2023 and understands that if such a thing happens again with Modelo, opportunities are going to ripple out from it.TD Cowen estimated that the aluminum tariffs could cost Constellation $1 billion annually. In its most recent earnings call, Constellation disappointed investors with its guidance outlook. Most analysts I spoke to for this story, however, say the tariffs as they currently stand won't be a killer for Constellation or its customers. The aluminum tariffs will hit its competitors who import the material as well, Bernot says, and the company can likely absorb the cost hit without customers seeing a massive spike in Modelo's price.
And if Constellation does need to raise prices, their consumers will probably be OK paying some of that increased cost.
"They're confident enough in the grip of their brands that they can increase prices a little more easily without consumer pushback than, say, a Bud Light or some other domestic brand," Nelson says. Part of Bud Light's problem has been that it's pretty easy for consumers to swap out for a Coors Light or a Miller Lite. Modelo's loyal drinkers are a little stickier.
Kaleigh Theriault, an associate director of beverage alcohol thought leadership at NIQ, points out that amid post-pandemic inflation in 2022, domestic beer brands raised prices more than imports, giving imported brands like Modelo a little more room now.
"Domestic beer has taken up price so much over the past two years that consumers and shoppers have sort of turned away, or they've recognized how much domestic beer prices have increased, and that might be influencing their purchase of imports or that might be kind of the reason that they're slowing down their purchasing of domestic beer or just beer overall," Theriault says.
While the outlook isn't too scary now, President Donald Trump's trade war and tariff tactics have been volatile. He's threatened to put tariffs on all goods from Mexico in the past, and while the liquid in the beer cans isn't subject to tariffs now, there's no guarantee that won't change.
Modelo's headaches may be more acute when it comes to the president's immigration crackdown and the anxieties it's causing. Immigration raids and the Trump administration's hostile approach to foreigners living in the United States may be putting some Hispanic consumers on edge. They're worried about shopping, in case they're asked to show ID, staying home more, and may be pulling back on spending in the event someone from their household is detained. And like many consumers across demographics, they're under pressure economically.
"They're afraid to go shopping, whether they're here illegally or they're here illegally, that Hispanic shopper is afraid to go out," Bump Williams, an alcohol industry consultant, says. He recently conducted a survey of about 200 Hispanic families, and two-thirds of them said they had changed shopping behavior or were concerned about going shopping. Williams also says retailers in heavily Hispanic markets have reported declines in foot traffic. Jefferies analysts recently wrote in a note to clients that there appears to be a correlation between encounters at the Mexican border and consumption trends.
Hispanic consumers represent about half of Constellation's overall beer business. In the company's most recent earnings call, the company's CEO, Bill Newlands, said that two-thirds of Hispanic consumers were "concerned about higher prices on things like food, gas, and other essentials," and over half were "concerned relative to immigration issues." They're also worried about job losses in industries with a high number of Latino employees.
"What does that do? That has tended to mean that the consumer has pulled back on spending on a number of categories," Newlands said. Beer is quite a ways down the list compared to other areas of spending, such as on restaurants, he added, "but it's certainly on the list, because things like social gatherings, an area where the Hispanic consumer often consumes beer, are declining today as part of these overarching concerns that they have."
Constellation Brands and AB InBev did not respond to requests for comment for this story.
Current troubles for Constellation and its brands, such as Modelo and Corona, aren't likely to be a full-blown disaster. But they may represent an opportunity for competitors, including Anheuser-Busch InBev, to make some inroads.
Bud Light has done a lot to try to claw back consumers from its 2023 snafu, including becoming the official beer sponsor of the UFC in 2024 and generally trying to keep its marketing as uncontroversial as possible. Still, it's been on the downswing for a while — its volumes peaked in 2008.
"Bud Light's not going to be the comeback winner on this one," Williams says. While the brand has managed to stop much of the bleeding from 2023 and 2024, it's still declining. "It's got a very slim chance to reclaim the title of the No. 1 brand in the country."
Recent data from the National Beer Wholesalers Association and Fintech, a payments company in the alcohol space, found that in the first quarter of the year Bud Light saw the biggest loss of market share in on-premise purchases (think restaurants and bars) as well as off-premise retail purchases (think grocery stores or gas stations) of the top 10 alcohol brands it tracks. While Bud Light remains quite popular, it's not on the growth track. The opposite is true for another AB InBev brand, Michelob Ultra. Per the NBWA and Fintech, Michelob had the biggest share gain during the first quarter of the year.
"Michelob Ultra now, for all intents and purposes, is Anheuser Busch's flagship beer, its star beer," Bernot says. "It's a really strong brand."
Michelob's gains may not necessarily be Modelo's losses — the latter remains the No. 1 imported beer, has a loyal customer base, and, as mentioned, may have some room to push up prices if it needs to. Modelo's customers aren't switching brands; some of them may just temporarily be buying less of it. In contrast to Bud Light, Michelob has a better-for-you air to it. It's marketed as low-carb and low-calorie and leans into a health angle, as an option that can be part of a fit lifestyle. To many consumers, Bud Light feels more regular and generic, even if it's also a light beer.
The three brands may be locked in a tight race for America's beer crown, but that's because Modelo, Bud Light, and Michelob all appeal to a wide array of consumers. If Hispanic consumers are pulling back on Modelo purchases, that probably means they're buying less Bud Light and Michelob, too. If their customers do start to switch up habits, it's not clear they'll be swapping one for the other. If you give up on Bud Light, you're probably going to go for a Coors Light or Miller Lite first. If Modelo gets too pricey, you may look for another premium or import brand.
To a large extent, these brands' fates are in their own hands. Bud Light is trying to get back drinkers it lost and attract new ones. Modelo has a pretty unique appeal that is very much at the center of its US parent company's overall strategy.
"That brand is able to command that premium price point because of long-standing American consumer attraction to the exoticism and the vision of paradise that marketers have really been able to shape around the Corona and to some extent the Modelo brands," Infante says. "And Modelo also has a really compelling marketing campaign that it ran for many years about the 'fighting spirit' that really resonated."
Beer overall is just having a tough go of it in general.As for Mich Ultra, its image as the healthier option boosts its appeal — it's for after-work drinks, but also after-run drinks or an afternoon on the golf course. In fall 2024, Michelob Ultra Zero was introduced, a nonalcoholic option meant to capitalize on the growing NA trend. It's a marketing opportunity for the flagship brand to generate excitement, solidify the wellness-conscious halo around it, and take up more store space with both alcoholic and nonalcoholic options.
The analysts I spoke to were mixed on whether this meant Michelob could depose Modelo. Thierault thinks it's unlikely Michelob will become first anytime soon. Williams, on the other hand, says Michelob Ultra "has a really good shot at surpassing Modelo Especial as the No. 1 beer brand in the United States this year."
Ultimately, it may be long-term structural trends that are more important, just as they were when Modelo surpassed Bud Light in 2023. In that scenario, Modelo continues to grow, despite hurdles, just like Michelob. Bud Light remains quite popular, especially in draft and at bars, but its overall fortunes don't appear to be on track to reverse.
The beer industry's leaderboard could shift again, depending on politics, perception, and pricing power. But if and when that happens is still TBD. In the meantime, beer as a sector is not having a blockbuster year anyway.
"Beer overall is just having a tough go of it in general," Bernot says. "It's important to put any certain brand declines or struggles in the larger picture of beer is just not doing great."
Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.
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