Constellation Brands is facing declining U.S. beer sales as Hispanic consumers cut back spending due to President Donald Trump's hardline immigration policies and ongoing trade tariffs. According to Bill Newlands, CEO of the company, the Hispanic customer base—accounting for around 50% of its beer sales—has grown increasingly concerned about job security and immigration enforcement, reducing their discretionary expenses, including beer purchases.
Modelo Especial, brewed in Mexico and imported exclusively by the company, has been a market leader since it overtook Bud Light in 2023. However, the brand’s momentum is now faltering. Sales have dropped significantly in U.S. states and zip codes with large Hispanic populations. Reduced spending on social gatherings and restaurant visits—key occasions for beer consumption—has further weakened demand.
The company's beer division contributed 78% of total revenue in the most recent fiscal quarter. While a broader marketing strategy aimed at non-Hispanic consumers helped boost visibility, it has not fully compensated for the drop in core customer spending.
The situation is compounded by a 25% tariff on aluminum, which impacts canned imports from Mexico. Although the president temporarily reduced reciprocal tariffs on all countries except China, the tariff burden on beer packaging remains a challenge for the importer. This was reflected in the company’s revised guidance, which forecast lower-than-expected earnings for fiscal 2026.
Despite beating quarterly revenue and profit expectations, the company’s shares dropped by nearly 1% following the announcement and have declined more than 23% since the president’s re-election. In an attempt to streamline operations, the firm is divesting its lower-cost wine portfolio to focus on premium labels.
According to a note by Andrea Teixeira, analyst at J.P. Morgan, the company may have benefited in recent years from more lenient immigration policies, and the current environment marks a stark reversal.
