When beer drinkers soured on Bud Light following a controversial promotion with transgender influencer Dylan Mulvaney, it was clear Bud Light’s closest rivals — Coors Light and Miller Lite — would benefit. But before long, it was a Mexican lager on everyone’s lips.

In the weeks following Bud Light’s dramatic decline, Constellation Brands’ Modelo Especial surged to the top of the list, ending Bud Light’s two-decade reign as America’s best-selling beer. But the overnight sensation is not an overnight success.

“Modelo has certainly been a rising star in the beer industry for a number of years,” Brewers Association Chief Economist Bart Watson said.

There’s a new ‘rey’ of beers

Watson said Modelo Especial has been on Bud Light’s tail for some time, but most in the industry thought a takeover of the throne was at least a few years away, if not half a decade.

“I think the timing surprised everyone,” he said. “The changes in the last six months have been pretty dramatic and not something we’ve really seen before in the beer industry. But the overall trend was clear that Mexican imports, particularly Modelo, have been on the rise for a while, and premium lights have been slowly declining as they’re displaced by higher-priced beers.”

Since 2000, Americans are steadily drinking less beer per person. U.S. adults on average went from drinking more than 31 gallons of beer per year in 2000 to less than 25 gallons per year by 2022, according to data from the Beer Institute and Census Bureau compiled by the Brewers Association.

But while the amount of beer consumed is shrinking, imported beer is on the rise, with Mexican imports doubling from 2013 to 2022, pulling business away from premium lights like Bud Light.

Bud Light’s long decline

“I don’t think that it’s any secret that Bud Light has been in decline for a number of years now,” former Anheuser-Busch executive Anson Frericks said. “But they were still the No. 1 brand and there’s no reason that they couldn’t be the No. 1 brand and turn the company around.”

Frericks was president of Anheuser-Busch Sales and Distribution Co. before leaving in 2022 to start the anti-ESG asset management fund Strive with now-Republican presidential candidate Vivek Ramaswamy. He said Bud Light’s marketing efforts failed to find the right recipe for growth.

“What it takes is having great people, great marketing campaigns talking about what the brand is, making sure you hold onto the loyal customers that you do have and make Bud Light approachable for a new generation as well,” Frericks said.

Bud Light’s promotional stumble in April cost the brand a chunk of its loyal customer base.

“It’s pretty clear there’s been a permanent share loss here,” Watson said.

A taste of opportunity for Modelo’s maker

Bud Light parent company Anheuser-Busch moved to buy Grupo Modelo in 2012, but in 2013, the Department of Justice sued to block the sale, claiming it gave Anheuser-Busch too much control of the U.S. beer market.

To quash the antitrust complaint, AB InBev agreed to sell Modelo’s U.S. business to Constellation Brands, giving the wine and spirits producer control of Modelo, Corona and Pacifico in the U.S.

“So Constellation was handed this brand that really had a lot of momentum already. You had a lot of Hispanic customers that were coming into the U.S. Those Hispanic consumers, they knew Modelo from being in Mexico, so they had a lot of underlying tailwinds,” Frericks said. “So they benefited from those tailwinds but then also started advertising that brand to people outside that traditional Hispanic consumer base.”

Remember Frericks’ formula: Hold onto the loyal customer base while expanding advertising and distribution to a new audience.

“They started seeing the brand show up at their grocery stores, convenience stores, because it was distributed more broadly. A lot of the marketing campaigns they did were very good,” Frericks said.

But no one could have anticipated the free advertising Modelo Especial would get week after week with Bud Light’s tailspin.

“People have talked about it being the largest brand now in the U.S. That’s something that traditionally would not be covered within the business realm and now, all of a sudden, every single week, people are talking about Modelo, its growth,” Frericks said.

The question now is whether Constellation Brands can turn a summer of success into sustained beer supremacy. Modelo may be winning the summer, but Bud Light is still America’s best-selling beer for the year.