REPLACEMENT BEER:

A decade ago, Modelo wasn't even a top-10 beer, but it has climbed up the ranks. In 2018, Modelo was America's seventh-top beer in chain retail by dollars. By the beginning of this year, it was second.

A combination of factors have propelled Modelo forward in recent years, said Garrett Nelson, vice-president and senior equity analyst at CFRA Research, in an email, including "the growing popularity of imported beer brands, demographic changes, Constellation's capacity growth to meet the demand, and most recently, the demise of Bud Light."

As more Latino and Hispanic drinkers have reached legal drinking age, their preferences have shifted the overall mix of beer that's selling in the United States. The country's growing Hispanic population has boosted Modelo's growth.

"The Modelo brand over-indexes to un-acculturated Hispanic consumers," said Vivien Azer, a senior research analyst at Cowen, noting that in 2016 the company said 3 points of its revenue algorithm just comes from growth of the Hispanic population in the US. The Wall Street Journal points out that 70 percent of Modelo's consumers were Hispanic in its 2019 fiscal year.

It's also taken off with non-Hispanic consumers, which Constellation told WSJ now represent 45 percent of its base. The website Good Beer Hunting points out that more non-Hispanic households purchase Modelo than Hispanic households, but Hispanics consume more Modelo by volume than non-Hispanics.

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