Modelo Brands Stumble on Gambrinus Price Increase

Supermarket share trends flatten, analyst writes.

The torrid growth of Grupo Modelo brands, led by Corona Extra, slowed during the first two weeks of October following a price increase by importer Gambrinus, Morgan Stanley analyst Bill Pecoriello wrote in a report Friday.

From the report:

In the first 2 weeks of October, Modelo pricing is up 4.3% vs. a 1.3% increase YTD… Because of the price increases, Modelo share trends have slowed from +50 bps YTD to flat in the latest 2 weeks.

Pecoriello notes that the price increase suggests few distributors have heeded the call by Crown Imports – which takes all over import duties next year – to swallow the price increase.

The Gambrinus price increase followed a period of time when Corona price increases lagged those of other imports and mainstream light beers.

Beer Marketer’s Insights Express (subscription only) reported Friday:

As Gambrinus price hikes went into effect in parts of East, avg Modelo prices in supers up 4-5% during first 2 weeks of Oct … And guess what happened? Yep, Modelo volume actually down 2% in latest week, following 4% gain in prior week. In last 2 weeks, Modelo gained less than 0.1 share in supers.