AB Inbev Urges Mexicans Not to Cross Border and to Sell Beer Instead

Anheuser-Busch InBev will urge Mexicans who plan to cross the border into the U.S. to become undocumented workers to stay -- and become small business owners running beer stores.

AB-owned beer giant Grupo Modelo was looking for a way to turn Modelorama, its neglected retail chain, into a powerful national brand when Donald Trump's rants about building a wall between the U.S. and Mexico struck a chord.

"We said 'that's a great opportunity,'" says Daniel Haskell, business unit head of Modelorama. "Why don't we launch the brand through an initiative that lets people know in an impactful way that they don't have to go to the other side of the wall to find opportunity?"

Grupo Modelo has 8,000 Modelorama beer stores across Mexico and is opening two or three a day, which amounts to 900 so far this year and 873 in 2016. It costs between $4,000 and $20,000 to be smuggled into the U.S. from Mexico, but only about $5,000 to become a Modelorama franchisee, Haskell says.

Modelorama's new agency Anonimo dispatched well-known documentary filmmaker Juan Carlos Rulfo to the border to make a short film to be distributed online that illustrates the plight of workers who leave their families behind for years because they don't believe there are economic opportunities in Mexico for them. One interviewee talked about being deported after eight years in the U.S. The four-minute film includes interviews with AB executives and with franchisees as they set up and run new stores. It ends with Modelorama's message about turning the American Dream so many pursue into the Mexican Dream: "Our objective is to keep creating opportunities so fewer people have to leave their families and cross the border."

The branding effort got off to an unlikely start. Daniel Haskell was working at AB's headquarters in New York when he was asked to help turn Modelorama, a legacy business AB decided to keep when it bought Grupo Modelo in 2013, into a real brand. His first reaction was "'I don't speak Spanish, I've never been to Mexico, and I don't know what Modelorama is,'" he says.

It was such a neglected product that no one even remembers when the first Modelorama opened. For a while, the name was changed to Corona, Modelo's flagship beer. Some outlets used both names, in an excess of confused branding. Haskell arrived last year, hired Anonimo, and says the Mexico City agency's founder Raul Cardos recognized immediately that the vision for rebranding Modelorama "speaks to immigrants."

This is how it works: AB provides the infrastructure, including the simple but bright and cheerful store premises, and electricity. The franchisee, called an empresario, buys the beer and runs the Modelorama store, often as a family operation. AB's beer portfolio, composed of Bud Light, Corona, Modelo Especial, Stella Artois and Victoria among other brands, accounts for about 90% of what is sold in the stores. The remaining products come from a few partnerships, with Coca-Cola, Nestle water brands and PepsiCo's Sabritas snack line.

Besides recruiting new store operators to keep up the fast pace of growth, AB wants to raise awareness of Modelorama as a retail beer brand. Modelorama's first-ever brand campaign kicks off next week in social media, with its first tagline "Sabemos de Cerveza" ("We Know Beer"). The documentary will be added to the social media mix a week or two later.

Haskell has big ambitions for Modelorama, which contributes about 15% of Grupo Modelo's sales in Mexico. Modelorama Premium beer boutiques, with more artisanal and craft beers and premium brands like Stella, will open in Mexico's fanciest neighborhoods. The first Modelorama Premium started in Mexico City a year ago and there are now 10. Haskell expects up to 15% of Modelorama outlets to eventually be under the Modelorama Premium banner; the rest will be Modelorama Classics.

There's also a pilot program in Mexico City with Uber Eats, usually used for restaurant deliveries, to deliver beer for Modelorama. "The first week, we sold out of beer," says Haskell.

But don't expect to see Modelorama opening in the U.S. Mexico is a very different beer market, where consumers stop at their local store daily for a bottle or two, while U.S. shoppers buy six-packs to keep in their big American refrigerators. Plus the AB-owned concept wouldn't be allowed in the U.S., where a three-tier system separates beer makers, wholesalers and retailers.