🏈 On this day in 1920, seven people, including superstar athlete Jim Thorpe, met to organize a pro football league in Canton, Ohio.

The meeting led to what became the National Football League (NFL), whose current value (all 32 teams) is estimated to be north of $150 billion. In a couple of weeks, the league’s 104th season kicks off.

Today, we'll discuss something harmonious with football: beer. Specifically, Modelo’s rise to America’s top spot.

All this, and more, in just 4 minutes to read.

— Matthew

QUOTE OF THE DAY

"The business of life is the acquisition of memories. In the end, that’s all there is. Think about what you really want out of this life in terms of meaningful and memorable experiences."

— Bill Perkins

BROUGHT TO YOU BY

What’s the most precious resource in the world?

Your time.

So why would you spend it getting frustrated, confused, or bored by the news?

It’s slanted (this cuts both ways), dense, and negative - oh, so negative. It’s nearly impossible to read and not think humanity’s doomed.

🍩 That’s where THE DONUT comes in…

We turn the time-consuming, anxiety-ridden chore of staying informed into a jargon-free guilty pleasure that ensures you’ll be the most interesting person in the room.

Our goal is to deliver news that’s unbiased, quick, engaging, and easy to understand — did we mention it’s all 100% free? (Even though the cost of admission also includes access to our prodigious wit 😉 )

Join 100,000+ other less angry and more optimistic readers, for free.

WHAT ELSE WE’RE INTO

📺 WATCH: Inside the massive car loan market in America

🎧 LISTEN: Charlie Munger and the psychology of human misjudgment 

📖 READ: Why income is a key to financial success

KNOWLEDGE TEST

Scoring a perfect 5/5 on We Study Market's Weekly News Quiz reportedly feels like enjoying an ice-cold beer with friends on a hot summer day.

It’s that satisfying. Ace the quiz.

HOW MODELO BECAME AMERICA’S BEER

America's favorite beer is Mexican

America’s best-selling beer? A Mexican lager that dethroned Bud Light, which held the No. 1 spot for about 20 years.

Modelo Especial beer is known as a crisp, full-flavored Mexican pilsner that’s been flying off shelves for years. Regarding retail sales, it was the No. 1 beer in the U.S., outselling fellow imports Corona, Heineken, and Stella Artois, plus brands like Miller Lite, Coors Light, and Bud itself.

The U.S.’s steadily growing Hispanic population is only a part of the Modelo story. Americans seek more imported, expensive beers as the number of breweries (craft beer) has ballooned.

Consumers are buying more flavorful, expensive beers, Modelo included. In June, Modelo took the crown by getting about 8.7% of retail beer sales in the U.S. compared with Bud Light’s 6.8%.

Constellation Brands owns the rights to Modelo (and Corona and Pacifico) in the U.S. This summer, its CEO said this summer that Modelo’s rise surprised even himself, unseating Bud Light “sooner than we anticipated.”

Drinking less

Americans are drinking less beer. But when they do, they prefer more expensive, tastier beer. Craft beers and imports, like Modelo — and hard seltzers and canned cocktails — have taken off at the expense of traditional domestic beer like Bud Light.

A demographic shift has also contributed to Modelo’s success: Hispanic people made up 19% of the U.S. population in 2020, up from 13% in 2000, according to the Census Bureau.

Mexican products are gaining more appeal among non-Hispanic customers, from beer to tacos to tequila. The volume of tequila and mezcal, Mexican liquors, has jumped 273% from 2003 to 2022.

Mexico exports more beer to the U.S. than any other country by far. In 2022, it shipped in seven times the volume of the second-highest source of U.S. beer imports, the Netherlands (Heineken).

From 2013 to 2022, the amount of Mexican beer imports doubled, according to data from the Beer Institute.

Bud Modelo has had much greater success than other Mexican beers that sell in the U.S., including Tecate and Dos Equis, proof that merely having a Mexican beer isn’t enough.

Humble Mexican origin

Corona and Modelo were first brewed in the 1920s in Mexico City, founded by Spanish immigrant and entrepreneur Pablo Diez Fernandez. Modelo benefited from American Prohibition in the 1920s, when alcohol consumption declined. But Americans turned to Mexican beers because it was illegal to buy or sell beer in the U.S.

Fernandez had immigrated to Mexico from Spain, just as Mexican breweries were popping up and beer became more popular in the country as it industrialized.

Fernandez led Modelo for the next 46 years, distributing Corona nationally while acquiring regional competitors. He was savvy and prudent, elevating Modelo to become Mexico’s top brewer.

From the beginning, Modelo’s growth has been keyed by its refusal to take on debt, instead financing its expansion by reinvesting profits. That strategy has helped Modelo avoid financial turmoil amid Mexico’s frequent financial crises and currency devaluations.

Decades ago, a marketing tweak also aided Modelo’s growth: The company pitched its beer to young Americans. Early TV ads featured young people in tropical surroundings, under palm trees on sunny beaches.

Then executives targeted the millions of Mexicans living in the U.S. with Spanish-language ads that were recognizable to Mexicans. Adding to the appeal was a price above that of domestic beers but slightly less than Heineken and other imports.

Then there’s the flavor, as Modelo appears to more selective drinkers who don’t want a beer belly.

Steady growth

Since being introduced to the U.S. market in 1982, Modelo Especial has grown double digits in all but four years.

The 1990s were kind to Modelo, which transformed from a once-obscure Mexican beer into a global brand during the decade. The key was marketing to Hispanic people living in America. (Today, Constellation Brands says its customer base is about 50% Hispanic and 50% non-Hispanic.)

Promoting Modelo has been a balancing act of maintaining its authenticity to its Hispanic base while inviting new consumers.

For Modelo, savvy marketing, no debt, and quality taste has become the formula.

“Constellation is very good at selling Mexican imports,” said beer journalist Kate Bernot. “Once Americans began squeezing lime wedges into Corona longnecks, these brands became synonymous with relaxation, vacations, and a bit more attitude than the standard American lagers that had dominated for decades.”

Dive deeper

How another beer company, Sam Adams, helped launch the booming craft beer industry.

See you next time!

Enjoy reading this newsletter? Forward it to a friend.

Was this newsletter forwarded to you? Sign up here.

Advertise with us.

Follow us on Twitter.

Keep an eye on your inbox for our newsletters on weekdays around 6pm EST and on weekends. If you have any feedback for us, simply respond to this email.

You can also leave your comments/suggestions/feedback anonymously here.

How would you rate today's newsletter?

⭐️⭐️⭐️⭐️⭐️
⭐️⭐️⭐️
⭐️