Anheuser-Busch kicks Mexican beer battle up a notch

Anheuser-Busch bringing Mexico's Estrella Jalisco to US
Anheuser-Busch bringing Mexico's Estrella Jalisco to US   

As the summer beer drinking season draws closer, the battle of Mexican beer brands is starting to heat up.

The already competitive imported Mexican beer marketplace will get a new player with Anheuser-Busch InBev bringing the Estrella Jalisco brand to the United States. The 106-year-old Pilsner brand was first brewed in the city of Guadalajara, the capital and the largest city in the Mexican state of Jalisco, which is considered by many to be the cultural capital of the country.

"It celebrates the traditions and the heritage of what makes Mexican culture and Mexican art so special," said Jorge Inda Meza, marketing director, West region for Anheuser-Busch. "The fact it comes from Jalisco, the birthplace of mariachi, known for its folkloric dancing, for its food, it just makes it more authentic."

Estrella Jalisco
Source: Anheuser-Busch

Estrella Jalisco's packaging reflects its roots with the red, blue and yellow color scheme inspired by the flag of Jalisco, and the crest on the label inspired by the coat of arms of the city of Guadalajara.

"It's a really powerful statement. This is a brand that brings all the pride of Mexican culture, heritage and authenticity," said Inda Meza. "It is a piece of Mexico coming to the U.S."

Anheuser-Busch InBev is betting that as one of the largest beer brands in Mexico, Estrella Jalisco will find a ready audience among Hispanic consumers who will recognize and be familiar with the brew.

"We know they know this brand, and in many instances, they grew up seeing this beer or they used to drink it and then they moved to the U.S, or their parents moved to the U.S.," said Inda Meza. "It's a special memory and finally they can drink it again."

Company officials hope the brand and its appeal to Mexican pride and tradition will resonate with the growing number of drinking age Hispanic millennials in the U.S. The brand will be distributed in 10 states, including California, Texas, Illinois, New Mexico and New York.

"One of the largest demographics in the U.S is that second- or third-generation millennial Hispanic, and that group is getting more in touch with their roots," said Inda Meza. "They're interested and want to connect with the things of their parents and grandparents."

While imports from Mexico have been one of the the hottest trends in the beer business over the past few years — with dollar sales of Mexican Imports up 16 percent in 2015 alone, according to Chicago-based market research firm IRI — Anheuser-Busch InBev has been on the outside looking in.

As part of its deal in 2013 to acquire the 50 percent of Grupo Modelo it did not already own, it was forced to divest its U.S. rights to the Corona, Modelo Especial and eight other Mexican brands. Constellation took full ownership of those rights and hasn't looked back, increasing the portfolio's marketing spending and watching sales surge.

Modelo Especial has been a quiet contender in the beer business, continuing its recent growth trend with a volume sales increase of 24 percent in 2015, according to IRI. It's growth has led Constellation officials to refer to it as "the next Corona," while Corona itself, already the most imported beer in the U.S., posted its own double-digit volume sales gain of 12 percent in 2015.

Beer drinkers will be hearing a lot more about Modelo in 2016 as Constellation plans an increase in media spending centered around an ad campaign touting it as "the fastest growing beer in America."

Meanwhile, the Heineken-owned Dos Equis brand is also raising the stakes, recently retiring actor Jonathan Goldsmith from his iconic role as "The Most Interesting Man In the World."

Dos Equis is expected to update the "Most Interesting Man" campaign and will increase spending on the brand as it becomes the official sponsor of the college football playoff this fall.

Anheuser-Busch officials know they are entering a crowded and competitive market place, and Estrella Jalisco will not be the first time the company has tried to appeal to first- and second-generation Mexican-Americans by importing an established Mexican brand.

The company began limited distribution of Montejo, another beer from the Grupo Modelo portfolio, in 2014. Montejo was similarly positioned as "authentically Mexican," but the brand's largely regional status within Mexico limited its ability to catch on here in the U.S.

While Anheuser-Busch is not setting specific expectations for the Estrella Jalisco brand, they don't hide their conviction that a brand more widely known in Mexico, backed by a direct appeal built on Mexican pride and authenticity, will have a powerful effect.

"There are a number of players in the space, but there is no other proposition that truly celebrates the heritage and iconography of Mexico," said Inda Meza. "We think it's going to be one of the success stories across any category for this year."

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