Constellation EVP and beer division president Jim Sabia shed light on the company’s 2025 strategies last week during Beer Marketer’s Insights’ annual fall seminar in New York City.
Here are some of the highlights from the conversation:
Constellation Continuing to Support Core
Constellation Brands continues to post the strongest growth among top beer vendors, supported by the strength of its core portfolio, including Mexican import brands Modelo, Corona, Pacifico and Victoria.
“A lot of the competitors have talked recently about going back to the core, and we’ve been fortunate that our core is healthy,” Sabia said. “Because when your core is not healthy, what do you do? You introduce a lot of stuff and … there’s a lot of churn in that stuff.”
Constellation, the second largest beer vendor by year-to-date (YTD) dollar sales, increased dollar sales +6.1% and volume, measured in case sales, +4.6% YTD in NIQ-tracked off-premise channels, according to data shared by 3 Tier Beverages (ending November 2).
Constellation’s growth is in spite of a bumpy summer for the beer category, which had vendors checking one- and two-week scan data more than ever, Sabia said. Trends improved in October, but “it’s going to be bumpy again in November,” he added.
Modelo remains the No. 1 brand by YTD dollar sales, and No. 2 brand by volume. Sabia projected that Modelo could be the No. 1 volume brand in the next 12-18 months, but “that’s not the goal.” Instead, the company is more focused on advertising, demand, displays and retailer sentiment, Sabia said.
That advertising will not include a Super Bowl commercial, for now, but “never say never,” Sabia said.
‘All In’ on the On-Premise
Support for Constellation’s core includes increased support for its brands’ on-premise business – specifically draft over packaged products.
“You can call me old school, but I truly believe in the power of on-premise to build brands,” Sabia said. “We know when the consumer walks into a bar, the very first thing they look at is the handles. … You don’t start looking over the bar and seeing if it’s in the cold box down there. You look at the handles.”
Constellation is “all in” on the on-premise, and has tasked “one of our next executives” Robert van Witzenburg to lead the efforts. The company is prioritizing draft for Modelo Especial, Pacifico and Corona Premier.
Constellation’s on-premise business has consistently stayed between 10 and 12%. The company is less focused on changing that percentage, and instead focused on account volume and sampling, Sabia said.
“It’s really not about the mix so much for us,” Sabia said. “It’s more about the volume and the sampling and the branding of the brands.”
Beer can ‘Market Our Way Out’ of Negative Trends
Sabia said beer is lacking its connection to “culture,” particularly in its marketing efforts.
“We were the category that was more part of culture when it came to our advertising,” Sabia said. “There’s an opportunity for the beer business, the beer marketers, to develop that advertising that’s emotional and effective, that gets back to where beer was 10, 15, 20, 30 years ago.”
Instead of beer, insurance companies are creating the advertising that is most integrating itself into “culture,” Sabia said.
“There’s an opportunity for this category to continue to build consumer demand with world class, culturally relevant advertising,” he continued. “That’s a way to market our way out of this.
“I think we will – I honestly do believe that.”
‘Will Never See’ Spirits-Based Modelo Extensions
Constellation has intentionally avoided adding many brands to its portfolio, instead innovating with extensions of its core.
Extension performances have varied, with Modelo Chelada recording slow growth, introduced in 2010 as a single 24 oz. can offering, and now extending to six 24 oz. flavors, a variety pack and a single-flavor 12-pack. Meanwhile, Corona Hard Seltzer and Corona Refresca “did not sell,” and the hard seltzer is now available in “a couple markets,” while Corona Refresca was pulled from the market.
“We try to line extend our existing brands, because those brands have so much equity,” Sabia said. “However, innovation is hard, and sometimes it doesn’t work. Instead of just continuing to push and spend dollars against those initiatives that don’t work, you have to make a tough call, and you just have to then discontinue.”
Sabia added that consumers “will never see one of our Modelo brands with spirits in it,” as the company’s Mexico facilities are not licensed to produce spirits, and Constellation will not move production of the brand.
Constellation is looking at other opportunities to participate in segments such as ready-to-drink cocktails (RTDs), but participation requires a “long-term investment,” Sabia said.
“There are some limitations to what we can and cannot do with our current Mexican portfolio,” Sabia said. “So as we look at this space for growth, naturally, we may have to go outside of that if we want to participate in that category.”
Constellation has already started to look outside its portfolio to participate in other segments, including partnering with Coca-Cola to produce Fresca Mixed, a spirits-based RTD leveraging the company’s citrus soda brand, already a popular mixer for cocktails. The brand launched in September with vodka- and tequila-based cocktails.