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VinePair Podcast: Why Did the Entire Beer World Sleep on Modelo Especial?VinePair

This week on the “VinePair Podcast,” hosts Adam Teeter, Joanna Sciarrino, and Zach Geballe discuss the meteoric rise of Modelo Especial. After listing what they have been drinking recently — including some unusual skin-contact wines and Spanish-inspired rosé blends — our hosts dive into a discussion about the second-most popular beer in America, in light of an article written by VinePair senior staff writer Tim McKirdy.

Teeter points to the work of Constellation, the parent company behind the lucrative marketing campaigns that have propelled the beer to new heights. Sciarrino explains how Modelo Especial bucks the growing trend of low-calorie, “better-for-you” beer. Also, Teeter and Geballe discuss the role Latinx communities have played in its sensational rise. Finally, our hosts wrap up their discussion by pondering how media influences trends across the beverage alcohol industry.

If you have any thoughts on the rise of Modelo Especial or any other trends, please send your ideas to podcast@vinepair.com.

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Adam Teeter: From VinePair’s New York City headquarters, I’m Adam Teeter.

Joanna Sciarrino: And I’m Joanna Sciarrino.

Zach Geballe: And in Seattle, Washington, I’m Zach Geballe.

A: And this is the VinePair Podcast.

Joanna and Zach, how are we doing?

J: Great.

Z: Doing good.

A: Come on, don’t answer at once. It is still so weird to be doing these remotely where we can’t really see each other but we never could see you, Zach.

Z: That’s true, lucky you.

A: It is just so funny.

Zach, what have you been up to recently? I see you got some press for your wine club. Congratulations.

Z: I did, thank you.

A: And it wasn’t from VinePair.

Z: No, from the good ol’ Seattle Times.

I think I mentioned this before, but one of the coolest and yet strangest things for me has been to see how much I really enjoy and missed pouring wine for people because it was a big part of my life before the pandemic. I knew I missed that but I don’t think I realized how much I had missed it until I started doing it again. As much as I love doing the podcast, writing about wine, and even teaching wine classes, there is nothing that’s quite as enjoyable as being able to say, “Here is something that I find delicious and interesting, but now you can try it.”

I don’t have to talk at you about it or write about it. Again, I like doing those things, too, but there’s something about the immediate feedback of someone trying and saying, “Yeah, this is really good,” or “Well, the next one may be better.” In that vein, one of the things that I had recently and that I really enjoyed was a rosé, or as it’s labeled here, a Rosado from a Washington winery that was founded by a guy who’s from the Rioja region and has two wineries.

One focuses on more conventional varieties here in Washington and then his other label, which I think is his passion project, focuses on Spanish varieties here in the state. The Rosato is a blend of Graciano, Garnacha, and Monastrell, so a classic-ish blend, but not something you would see all that often in Spain with a dominant Graciano wine. Yet, it’s really good. It shows a different side of what most people expect from rosé. It’s very savory and has an earthy, terracotta quality that I really enjoyed.

It’s fun to pour that for people and get to show off things in that setting where you can do that thing where you say, “Here, try a taste. You don’t have to buy the bottle, you don’t have to buy a glass, you can just taste it and hopefully you like it.” That piece of experiencing beverage is something that I really miss dearly and it’s very nice to get back to it.

A: Very cool.

Z: With someone besides my immediate family.

A: Yeah.

J: And how is the wine club going?

Z: It’s going.

I mean, it’s such a weird venture for me. I was actually just talking to someone else about this today, with one of my wine reps. One of the hardest things for me, though, in transitioning into focusing my buying on a wine club as opposed to really buying for a restaurant, is with a restaurant, I know exactly the setting in which people will be drinking the wine. They’ll be drinking it in the restaurant with food, so that drives a lot of the thought process behind what I would buy and considering how it works with the menu.

With a wine club, you can offer people suggestions but the wine is out of your hands once someone picks up their wine or you deliver it. They may drink it later that day or they might throw it in their freezer for an hour and then drink it. For me, it is hard to let go of some of that control but also be thoughtful on selections when it comes to wines that have a lot of different applications because I do think it’s important for this to pick wines that might not need food, because some people don’t want to drink wine only with food.

There’s a big culture of that here in the U.S. of wine after dinner or wine in the middle of the afternoon with nothing. I respect that and don’t want to create a club and select wines that only work if you’re having a full meal because I think that won’t be doing people the service that I hope to provide. It’s required additional mental gymnastics on my part but that’s good, it keeps me somewhat sharp.

A: Very cool.

J: Nice.

A: Hopefully, it’s continuing to grow, which is awesome and it’s a fun project to be working on for sure.

Z: Yeah, it’s nice to have that tangible piece of my work life.

A: Totally. Joanna, what about you?

J: I feel like I’ve been drinking quite a bit in the past week. Anyways, last week Evan and I celebrated our anniversary.

A: Congratulations.

J: Thank you.

It also happened to be the last week of service at one of our favorite restaurants, Racines. We went there for dinner and it was lovely, as it always is. They were absolutely slammed with a skeleton staff and I felt terrible but it was really exciting to be there. We had some wonderful wines. We had a few glasses: skin contact Muscat, and a lovely Aligoté. But we also had this really special bottle of wine that they recommended. It was a 2012 Hegoxuri from Maison Arretxea in the Irouleguy appellation, which is a very small appellation in southwest France, in the French Basque country. It was a white blend of Gros Manseng, Petit Manseng, and Petit Courbu. It was wonderful. It was really potent, floral, and aromatic but also really savory, as you were saying before, Zach. I really enjoyed that.

Z: Very cool.

A: That’s really cool.

They’re only closing because the chef is leaving, is that the deal?

J: Racines as the restaurant won’t exist anymore, but they’re reinventing themselves as something else in the fall of this year because the chef is leaving. As I understand it, Pascaline will be there and the rest of the wine program along with the drinks program will be there as well.

A: OK, cool. That would have been a bummer if everything else was gone.

J: What about you, Adam? What are you drinking?

A: I got to go out last week and have a pretty fun dinner with Josh, VinePair’s co-founder.

J: We’re familiar with Josh.

A: Josh and I used to like Lure Fishbar and we went on Thursday. We had a meeting there as well. We got this 2006 Chablis from Daniel-Etienne Defaix.

Z: OK.

A: It was really awesome and I never had a Chablis that old. It’s 100 percent stainless steel. Then, he ages it in the bottle forever, so this is the current vintage on the market, the 2006.

Z: Wow.

A: It was really cool. Josh, as it has been documented before, is very much a Chablis lover or just like white Burgundies in general. We said, “Oh, let’s get a bottle.” This bottle was on the list. I asked Josh, “Have you ever had a Chablis this old?” He hadn’t and I don’t really think I ever had either so we tried it and it was super cool. It was still really beautiful and refreshing but then there were these characteristics that you get with aged white wine. Those almonds and stuff were starting to come out and it was very crazy.

I was talking to the sommelier and I said, “Why is this the current vintage?” They said, “This winemaker’s crazy but this is what he likes to do and that is how he likes his Chablis.”

J: I love that.

A: That also shows you what you can do if there’s a wine that has been in your family for generations. You can afford to hold the 2006 vintage until 2021 and make it the current vintage.

Z: Yeah, and we’ve talked about this before, Adam, about how it’s one of those things that you see in some places in Europe. It’s almost impossible to imagine happening here in the States or in a lot of other New World regions where someone holds a vintage to release in 15 years when they think it’s ready. Unless you’re making bourbon, no one is doing that.

A: Yeah, not at all, but that was a pretty fun night.

Then, over the weekend, I went to a beer garden which was great. We went to this beer garden on Sunday afternoon after we went and saw some exhibits at the Brooklyn Museum.

J: Nice.

A: It was fun and I hadn’t done that before. I just had a pint of pilsner and I thought, “Oh, this has been a while. Also, I have one other thing.

I went to my favorite restaurant in New York City, which is Miss Ada. It’s amazing and it’s just the best. Tomer, the chef, was there and we got to catch up, which was nice. They also always have just really cool wines. I had a really amazing orange wine that I did not take a picture of or write down so I cannot tell you what it was. I also had a really cool cocktail that was a riff on a Gin Fizz, but it had arak in it.

Z: Oh, nice.

A: It was really interesting and when I ordered it, the server asked, “Do you know what arak is?” I said I did and she said, “OK, this is a very polarizing cocktail because it has such a strong anise note. I’m like, “Whoa, whoa, what is this?” Yet, it was really fun and really delicious so that’s what I’ve been up to.

So, what we want to talk about today, which I think is really interesting, is if you polled the majority of American drinkers and you asked them what the No. 2 most popular beer is in America, they probably wouldn’t be able to tell you. Most if you asked them what is No. 1, I assume would guess Bud Light and they would be right. If you ask them, No. 2, I think you’d hear a range of beers. You would hear Budweiser, Coors Light, Miller Light, maybe even Corona.

However, the beer that is actually the No. 2 most popular beer in America and the No. 1 import, which is surprising to a lot of people, is Modelo Especial. We published an article last week about this written by Tim McKirdy, who is on our editorial team. What is so interesting about this is it allows us to look at how everyone missed this, right? This is a beer that’s been growing in popularity for the last decade but most Americans are still unaware that it’s so huge.

Now, there are a few reasons for that. Part of what makes it huge is that it’s just massive in certain regions. Its massive popularity allows it to be No. 2 because it’s No. 1 in so many places. I think it’s also that we just don’t look at certain beers seriously enough. I’m curious, how did you both react when you heard that Modelo was No. 2? And do both of you drink Modelo?

J: Well, I certainly drink Modelo. I don’t buy it often but I’ve had it before. I edited Tim’s piece that went up last week and I was pretty surprised. Somebody could have mentioned that it was popular and I would have said it’s popular in dive bars or dive specials. Yet, the data backing this up was very surprising to me.

Z: Yeah, totally.

For me, without the data, I would have lumped Modelo Especial in with Pacifica or some of the other widely available and recognizable Mexican lagers that are imported into the U.S. I would have bet an alarming sum of money that Corona would be by far the No. 1 imported Mexican beer in the country and I would have been totally wrong. What’s interesting to me about this, in addition to that fact and also something that Tim highlighted in his piece, is that it’s not necessarily a new phenomenon. Modelo has been on this upward trajectory for a really long time. Maybe it is because I don’t see it advertised as much. Part of my perception of Corona is driven by the fact that they advertise it very aggressively. Much more aggressively, at least in English, than they had advertised Modelo Especial.

Part of it is also that Modelo Especial is advertised on UFC, which is not something I watch personally, but obviously there’s a huge audience for it. A thing I want to get to at some point in this conversation is, what does this tell us about other things we might be missing?

On the specific topic of Modelo Especial, it’s funny to me when I think about this because it’s also true that when I have been to places to eat where your selection of beers tends to be that slate of imported Mexican lagers, Modelo Especial is what I would pick. It’s my favorite of those beers. I think it’s significantly better tasting than the others so it’s cool that, actually, everyone seems to agree with me.

A: I think what’s really interesting about Modelo Especial is that there has definitely been a marketing campaign. In the article, Tim talks about how the ground game was really good. Constellation, who basically has built the brand in the U.S., made it as huge as it is.

For those of you who aren’t familiar, when AB InBev bought Grupo Modelo and they basically took control across the world, our Justice Department said you can’t do that in America. You need to sell those brands to someone else in America, so Constellation bought Modelo, Corona, etc.

Constellation has done an incredible job of building this brand in these stores. I actually think what they’ve done, which is really interesting and that they were able to do because Modelo didn’t have a broad market awareness, is they were able to build it separate from Mexican restaurants. Corona has really become synonymous with the beach. If you’re out having Mexican food, you have a Corona with lime. Honestly, to some extent, Negro Modelo has become that as well. Modelo Especial has this position where it’s a really well-made imported Mexican lager, and it can be drunk everywhere. Basically, at any dive bar you go to, at this point in time, Modelo is one of the tap handles. It’s the new PBR.

Z: Yeah.

A: I think that is what has been brilliant about its growth, is that it’s not tied to specific occasions where you think, “Oh, I am going to the beach, I should pick up some Modelos.” Yes, you should and if you like Modelo, people probably do but it’s not the thing. Whereas, some people would say “Oh, we’re going to the beach, I guess we have to have Corona.” That has really allowed it to explode.

Z: Some of it is even things like the packaging —the foil has a little bit of an upscale vibe to it. I think the PBR comparison is a really fascinating one and I would be curious for both of your thoughts. PBR’s popularity, I think, was born out of this notion that it had both a combination of it being affordable, widely available, but it wasn’t as well known. It had the cachet of history behind it. It was this idea that here’s a beer that has been made for over a century. That’s not entirely the case with Modelo Especial but it’s been around for a long time. It’s not overexposed, so even if you’re drinking the No. 2 beer in the country, you don’t feel that way when you order it.

J: Yeah, I agree. I think it’s cheap, but not the cheapest. It’s not one of the biggest macro beers or light beers out there. I also find its success really interesting because it’s not one of the light beers and it bucks this bigger trend of low-calorie light beers and health and wellness in the space that I find just really interesting about this beer.

A: Yeah, I think it’s also interesting because it’s well regarded by lots of people and lots of people think it’s their beer. A lot of those who think it is their beer don’t think anyone else drinks it.

J: Right.

A: If you talk to a lot of people in the Latin community, they think it’s their beer. They think it’s not really consumed by many other people besides people who are Latinx. That is not true. I think there are lots of people, from brewers, winemakers, somms, who say it’s an industry drink. It is what you drink at the end of the shift for lots of cooks.

It’s funny that all these different communities feel like they own it and that it’s theirs, which I think is really special. Whereas the problem with PBR that I think hurt it a little bit was that it really did become labeled as the hipster beer. During the time of 2005 to 2013, it was really on fire. Brooklyn. The Strokes. It was that group of people that drank PBR. It’s a much more diverse group of people that drink Modelo Especial, which is also so incredible and just absolutely bonkers. Everyone drinks it in so many different formats. I’ve seen it in the bottles that you’re talking about, Zach. I do think the foil is a nice touch. I’ve also seen it in the cans, I’ve seen it in the tiny 7 ounces, I’ve seen it in the massive tallboys. It’s just across the board. Everyone drinks it and everyone loves it.

Z: Yeah, and of course on draft in a lot of places, too. That, I think, is another area where we mentioned before, another area that I think sets it apart a little bit. Corona is maybe its nearest competitor, even though they’re both owned by Constellation. It exists in other formats, but when people think of Corona, they think of the bottle of Corona with lime. If you are not drinking it that way, then how are you drinking it? Modelo, despite having all these other formats, which work, isn’t as tied to one specific packaging format so we can dominate on-premise, on tap, but also these various off-premise formats as well.

A: Totally, and I think it dominates because you don’t have to be at a bar that has fresh limes on hand to serve Modelo. Again, if I’m going to a tailgate and I’m picking up Modelo, I don’t want to also say, “Oh, I better pick up five limes to slice up.”

Z: Right, let me bring my cutting board and paring knife.

A: Exactly.

That is very different whereas you’re going to the beach and you bring Coronas, you better have limes. Joanna, why do you think this has been missed so badly by so many people? Much of the press, and just industry in general. How do you think we all miss this?

J: That’s a really good question. There is the data to back it up and it’s theoretically existed for years at this point. Possibly, it wasn’t trendy or it wasn’t in craft beer communities. There was just so much else going on that it was easy to miss. Then of course, there are the big macro brands that people are always talking about and what’s happening with them.

I also think it managed to fly under the radar. To your point, Adam, everyone thinks that it’s theirs without really acknowledging that other communities really love it. And then, as a result, it created this extreme growth for the brand. Also, I’ve been thinking about this during our conversation, and it’s something we’ve touched on in editorial meetings before, is the younger generation’s attraction to international brands and not American brands that I think also potentially could play a role in this conversation.

A: Interesting.

I think it’s interesting how imported brands, in general, become different things in our market. I actually don’t know, to be fair, where Modelo sits in its home market but I’ve always found it really interesting with a brand like Stella. In the U.S., we think of it as a fancy imported Belgian beer but especially in Great Britain and Tim loves to share this fact, it’s the cheap beer. It’s the cheap beer that everyone drinks when they’re out watching soccer because it has a little bit higher alcohol. It’s the party beer and it’s just funny that it came here as an import from Belgium and we think it must be fancy and we treat it very differently.

That is also interesting to me. I don’t believe there’s a treatment of Modelo by a lot of consumers that this is especially Mexican if that makes sense? I mean that in a more stereotypical way Americans tend to do things. The way we treat Corona, right? “You have your nachos, you better have Corona.”

Z: It’s not siloed off into that.

A: It really isn’t, right? And that is so fascinating to me.

Z: It’s one of the anecdotes that Tim shares in the story or data points, which is that it’s a huge beer at Buffalo Wild Wings. It’s one of their absolute best sellers and that makes sense pairing-wise. Of course, you want a light lager or a lager with your wings. It’s that exact point where you don’t see it dominating because it’s huge. In Mexican restaurants and things like that, it’s big in lots of places.

I also want to advance another thought on this and maybe talk about this question of why it’s been missed, especially because the data is so clear and so readily available? We are not the only people who get the sales data. I think that it’s a combination of two trends. One of them is what you hinted at the beginning, Adam, the success is driven by sales in the Southwest, in the Midwest, places that certainly have lots of people and lots of media of their own. Let’s be honest.  Drinks media and drinks ad agencies are mostly in New York. It’s not a huge beer in New York. Obviously, it is readily available and it sells quite well, but its dominance is driven by other markets.

A: It’s definitely not massive in New York, for sure. You see it, but you don’t see it. It’s not everywhere, even in the way that PBR was everywhere. It definitely isn’t in the same way.

Z: The other part is a reminder that those of us who are in this industry are professionals. I think our coverage is sometimes driven by these weird two competing polls. One is a desire to look for something new and trendy, which is totally understandable. Part of our job is to be aware of what is happening and inform people of it before it hits their market or before it’s everywhere, so that people can try something out if they’re interested and or be apprised of the situation.

On the flip side, I think it’s because of the way that the sale of the brands to Constellation was covered at the time. Everyone in the media said, “Oh, yeah. They got six brands… Corona, etc.” That’s understandable but it’s a good reminder to us to revisit and say, “Hey, this thing that we assumed eight years ago may not still hold true.”.

The data pointed that out to us and I think it’s great that we really looked at it and found the story here. I want to throw out a suggestion to both of you or a question to both of you: Do we sometimes think that trends are over before they are?

The one that occurred to me when I was planning for this is that I have seen a lot and heard a lot, both written and talked about, is the trend of pumpkin beer is over. I’m curious, and maybe we can dig into this for another episode because I don’t have the numbers in front of me, but I wonder if that is, in fact, true — that lots of people are making it now even though it’s early August. That’s the trend I wonder if we have already written off, but in fact is still really, really popular?

A: You know what my answer is.

Z: I’m not asking what you think about pumpkin spice beer. We’ve already been there.

J: I do not like it.

A: I hate it and I wish it was over.

Seriously, I think the trend is definitely not over. People wouldn’t keep making it if it wasn’t exactly popular. I think we have a tendency to do that in general and try to write things off, say things are over. I think one of the biggest lessons that this teaches us is there’s a lot of lifestyle coverage out there that really fails to look deeply at data. We’ve talked about this a bunch on this podcast, but I think data doesn’t lie. That’s what you learn in journalism school.

We’re talking about the coronavirus and we’re talking about vaccination rates. Those journalists are looking at data. They’re not just saying that vaccinations are low because they walked by a few vaccination sites and aren’t seeing lines. They’re saying it’s low because they’re literally looking at the data and they’re saying it’s slowing or increasing. I think that’s the same for drinks. It really is important to have a gut check where you say, “OK, what do sales numbers look like? Have they been declining year over year over year?”.

For example, wine under $10 has been declining in its popularity and in its sales for the last few years. It’s a shrinking category. While there are still some brands that are pretty decently sized in that category, the category is shrinking. It’s basically disappearing, which is great for American wine culture, in all honesty. We’d rather that everyone is drinking nicer wines, a little bit more expensive wines, and taking it a little bit more seriously. That’s good for wine culture but that’s supported by data. Twenty years ago, we could have said that and that would have been true.

Z: Exactly.

A: I think that’s how we miss a lot of this stuff. We declare trends or declare things dead without trying to look into what the numbers say?

Z: Do we, alternatively, declare things alive without the information? I am going to bring up something that was on Twitter the other day. I hate to do this but Bill Shufelt is the founder of Athletic Brewing, who I interviewed.

A: Oh, this is crazy.

Z: I love the brewery but his claim that, in five years, 20 percent of the beer industry will be nonalcoholic is incorrect. I get it, he has a very high stake in that coming to be true but we should not and do not obviously just take that at face value because someone said it. There’s data that you can look at that shows what the market share for a nonalcoholic beer or anything is. It is, frankly, a lot smaller than certain people would have you believe because it’s their beat or their passion or whatever. That’s fine. The person who makes it needs to believe in its potential. We, as journalists, do not need to take their words as gospel.

A: No, although a lot of people often do because everyone needs to file a story. Of course, 100 percent look at the nonalcoholic sales and separate it out. Truly separate out, as we talked about a bunch, from low-alcohol and it’s really small. When I interviewed the founder of Lyre’s, he was saying that they are a $50 million revenue company and they’re the biggest non-alcoholic spirits company in the world. That’s not a big market.

Z: No.

A: If $50 million makes you the biggest nonalcoholic company in the world, again, as you said, that’s within people’s interests. He’s a salesman. He has to say that. I think what is really amazing is we could have noticed Modelo, we just didn’t. I also think that maybe we just lumped it in, sadly. We failed to truly examine and say it is actually this one standing out above all others and when you do, it is like, holy s**t, it is.

J: I also think why this piece is pretty special is because if you do try to search for another piece on it, it doesn’t really exist. Even after all this time, we’re still the first one’s publishing this piece.

Z: It was hiding in plain sight and I think that point is very good. There was a fascinating story to tell here, that everyone either completely ignored or if they saw those numbers, assumed there was nothing to say, which is silly but hey, good for us.

A: Totally. Well, this is fascinating and I think I am going to go have a Modelo right now actually.

Z: Yeah, good call.

A: I’m really craving one.

Z: I want to say that if you guys are out there, and if there’s something that’s obvious in the beer category or other categories, let us know if there are things that we’re overlooking, specific drinks in particular, whether it’s a beer or wine.

J: Cosmopolitan.

Z: We’ve certainly covered that one, but yeah, those things are super fascinating to us. Sometimes we find out about them because of you guys. You tell us what we’re missing. It’s super helpful.

A: Totally. Well, that was a great conversation as always. See you next week.

J: Thanks.

Z: Sounds great.

Thanks so much for listening to the “VinePair Podcast.” If you love this show as much as we love making it, then please give us a rating or review on iTunes, Spotify, Stitcher, or wherever it is you get your podcasts. It really helps everyone else discover the show.

Now for the credits. VinePair is produced and recorded in New York City and in Seattle, Wash., by myself and Zach Geballe. He does all the editing and loves to get the credit. Also, I would love to give a special shout-out to my VinePair co-founder, Josh Malin, for helping make all this possible and also to Keith Beavers, VinePair’s tastings director, who is additionally a producer on the show. I also want to, of course, thank every other member of the VinePair team who is instrumental in all of the ideas that go into making the show every week. Thanks so much for listening, and we’ll see you again.

Ed. note: This episode has been edited for length and clarity.

The article VinePair Podcast: Why Did the Entire Beer World Sleep on Modelo Especial? appeared first on VinePair.

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