Packages of Michelob Ultra are displayed at a BevMo store on December 16, 2024 in Larkspur, California.

Justin Sullivan | Getty Images

Michelob Ultra has overtaken Constellation Brands‘ Modelo Especial as the best-selling beer in the United States.

Michelob Ultra claimed the top spot as the best-selling beer in retail channels in the 52 weeks ended Sept. 14, parent company Anheuser-Busch announced Monday, citing data from Circana. The light lager is also the top seller in bars and restaurants, according to Nielsen IQ data for the 52 weeks ended July 12.

For brewer AB InBev, Michelob Ultra’s triumph reverses the company’s struggles from two years ago. Modelo Especial unseated Bud Light in the wake of conservative backlash over the flagship beer’s partnership with transgender social media influencer Dylan Mulvaney. Bud Light had previously held the title as the top-selling beer in the U.S. for more than two decades.

Modelo’s declining popularity comes as Constellation faces key challenges to its business, including tariffs on aluminum and Mexican imports and weaker demand from Hispanic consumers.

Historically, Hispanic beer drinkers have accounted for roughly half of Constellation’s customer base, although growing demand from non-Hispanic consumers helped fuel Modelo’s rise. Executives have said that President Donald Trump’s immigration policies and related job losses have weighed on Hispanic consumers’ spending.

Earlier this month, Constellation cut its forecast for the fiscal year, citing a “challenging” economy. The company expects net beer sales will fall 2% to 4% due to lower volumes and additional tariff impacts. It previously anticipated sales would range from flat to up 3%.

So far this year, AB InBev’s stock has climbed more than 16%, while shares of Constellation have tumbled 39%.

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Packages of Modelo Especial beer are displayed for sale in a grocery store on June 14, 2023 in Los Angeles, California. 

Mario Tama | Getty Images

Shares of Constellation Brands fell 3.5% on Tuesday after President-elect Donald Trump announced plans to place a 25% tariff on Mexican imports once he’s inaugurated.

Constellation imports all of its beer from Mexico, including Modelo and Corona. Beer accounted for 86% of Constellation’s sales in the first half of its fiscal year.

Shares of Constellation have fallen more than 3% this year, including Tuesday’s move. The brewer has a market cap of about $42 billion.

If implemented, Trump’s proposed tariff would raise Constellation Brands’ cost of goods sold by roughly 16%, according to a research note from Wells Fargo Securities analyst Chris Carey published on Tuesday.

To offset the tariffs, Constellation would likely raise prices. The brewer has some pricing power, even with inflation-weary consumers. Last year, Modelo Especial overtook Bud Light as the bestselling beer in the U.S.

It’s unlikely that Constellation would move its beer production out of Mexico. Thanks to an antitrust settlement between Anheuser-Busch InBev, Grupo Modelo and the Department of Justice in 2013, AB InBev had to sell Modelo’s U.S. business to Constellation. That agreement requires Constellation to produce those beer brands where AB InBev makes them, according to a research note from Roth MKM analyst Bill Kirk.

In recent years, Constellation has spent billions of dollars to expand its Mexican production capacity.

It’s unclear if Trump will actually enact his planned tariffs. In his previous term, he proposed a 5% tariff on Mexican imports, with plans to escalate the levies up to 25%, but those tariffs weren’t implemented.

In 2020, Trump signed a new trade agreement with Mexico and Canada into law.

In the Monday night post on his social media platform Truth Social, Trump also threatened to implement an additional 10% tariff on goods from China and a 25% levy on Canadian imports.

Shares of automakers, including General Motors and Stellantis, were also trading lower on Tuesday on tariff fears.

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