Constellation Brands CEO Bill Newlands said Friday that Modelo Especial beating Bud Light in sales dollars to become the top-selling beer in the U.S. came "a little sooner" than the company anticipated.
That happened in mid-June, when NielsenIQ data, previously provided to FOX Business by Bump Williams Consulting, showed Modelo Especial notched the title of No. 1 selling beer on a dollar basis for the four-week period ending June 3. More recent data showed Modelo held 8.4% of U.S. retail store sales for the month ending June 17, compared to Bud Light's 7.3%.
However, when looking at sales year-to-date, Anheuser-Busch-owned Bud Light is still the top-selling brand, FOX Business recently reported.
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Constellation Brands and the president of its beer division, Jim Sabia, have "often said that that was going to happen in the next few years, but obviously, it happened a little sooner than we had anticipated," Newlands said Friday.
He made the remark during the company’s fiscal first-quarter earnings call after an analyst had asked about the impact of Bud Light’s controversy on Constellation Brands’ business and any potential changes in connection to it.
"I think one of the things that you’re likely to see if some of that challenge continues is when we look at shelf sets in the back half of the year. You know, many retailers look at velocities as they are doing their re-shelf setting, which, again, often happens in the fall, and that always works to our advantage," Newlands continued. "I think when the retailing environment has gotten very, very sophisticated about seeing where the growth profiles are and the velocities against those."
He said the company was "particularly excited" in its beer segment "at the fact that the buy rate, both on our core as well as our high-end beer, including the Hispanic consumer, went up year-on-year during the first quarter."
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Newlands projected that would "continue to be positive," something that he said he thought would help Constellation Brands more quickly expand its share of shelf space. He attributed it partly to the "growth and velocities" of the company’s brands and partly to the decline "from some of our competitors."
The backlash that Bud Light and Anheuser-Busch have been experiencing started in early April, not long after the company created and sent custom beer cans to transgender influencer Dylan Mulvaney to mark "365 days of girlhood." Some beer drinkers reacted by swearing off Bud Light, negatively impacting the brand’s sales in recent weeks.
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Newlands also told analysts on Friday that the company’s beer business "delivered strong growth for the quarter." Modelo Especial, he noted, saw "double-digit dollar sales growth in tracked channels."
Constellation’s beer segment saw first-quarter net sales of $2.1 billion, a 10.6% increase from the $1.9 billion it reported in the same quarter the prior year that the company said "continued momentum" of Modelo and its related brands helped drive.
Total net sales for the company came in at $2.51 billion for the quarter, rising over 6% year-over-year. Quarterly net income was $135.9 million.
FOX Business' Eric Revell contributed to this report.
