Constellation Brands, the powerhouse behind Modelo and Corona, is sounding the alarm over a notable slump in beer sales, and it’s pointing to mounting fears within the Hispanic community as a major factor.
“Our Hispanic consumer, which reflects roughly half our business …is very interested in beer,” CEO Bill Newlands shared during the company’s latest earnings call. But he noted a troubling trend: “Occasions on which beer is consumed have decreased …[they’re] not going out to eat as much as they had, they’re having less social occasions at home.”
The numbers show it. Constellation’s beer shipments dropped 3.3% last quarter, slightly worse than the 2.4% dip Wall Street anticipated. Modelo Especial still reigns as the bestselling beer in America, but sales momentum is slowing.
“A lot of Hispanic consumers are apprehensive to leave their house or …deviate from their routine or go out,” explained Dave Williams of Bump Williams Consulting. He attributed the shift to fears linked to “recent ICE raids or deportation scares,” noting that it affects consumers regardless of legal status.
Adding to the challenge, the construction sector—a key employment base for Constellation’s core customers—is seeing slower growth. Job expansion in the field fell to 1.5% in May, down from 2.8% a year prior.
Despite the slowdown, the company expects beer sales to grow between 0% and 3% this fiscal year, while wine and spirits are forecasted to drop as much as 20%.
