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What U.S. Brewers Could Learn From Mexican Beer

PORTLAND, Ore. (TheStreet) -- Before the World Cup kicked off earlier this month, U.S. team captain Clint Dempsey lent his image to just two beer ads -- produced by Anheuser-Busch InBev (BUD), one was for U.S. Soccer and World Cup sponsor Budweiser and another for Mexican brand Modelo Especial.

Guess which one is seeing sales explode in the U.S.? We'll give you a hint:

Budweiser has lost about 30% of its sales since the earliest days of the economic downturn in 2007. It has slipped to the No. 3 beer brand in the U.S. with less than 8% of the overall beer market and fewer than 17 million barrels of production. That's massive when compared to the roughly 3 million barrels produced by a small brewer like D.G. Yuengling & Sons, but disappointing compared to the 50 million barrels and 25% market share Budweiser boasted in 1988. Modelo Especial, meanwhile, poured only roughly 3.6 million barrels worth of its beer into the U.S. last year, but that's a 64% increase from 2010 and includes double-digit percentage point increases for every year since.

It's far from alone, either. Stablemate Corona Extra has seen its U.S. production rise slowly but steadily from 7.17 million barrels in 2010 to 7.26 million last year. That's more beer than Yuengling and Samuel Adams producer Boston Beer Company (SAM) sell in a year combined and is just shy of Heineken's entire U.S. portfolio, which includes Mexican brands Dos Equis, Bohemia, Sol and Tecate. Throw in 435,500 barrels of Pacifico -- which is equivalent to a craft brewer roughly the size of Bend, Ore.-based Deschutes Brewing and Petaluma, Calif.-based Lagunitas combined -- and that makes parent company/importer Constellation Brands the third-largest player in the U.S. beer market. Only A-B InBev and SABMiller/MolsonCoors (TAP - Get Report) joint venture MillerCoors produce more, though each of those two has seen U.S. sales -- and sales of their light lagers in particular -- fall steadily since the recession.

That success helped push A-B InBev to purchase Grupo Modelo for $20.1 billion last year, but it also prodded the Justice Department into preventing it from importing those products to the U.S. and distributing them here. That task fell to Constellation Brands, which took over a new Modelo brewery near the U.S. border and rode its newfound riches to a nearly $2.3 billion spike in sales.

So what's the takeaway here? Every brewer in the U.S. has something to learn from their large, lager-brewing Mexican counterparts. As we mentioned about a week ago, lager is still a dominant style here and Mexican brewers have managed to expand its popularity while sales of every U.S. lager short of Coors Light and Pabst Blue Ribbon tank. Even craft beer has embraced lager to an extent, but not with nearly as much fervor as the Mexican brewers.

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