Trump’s policies on immigration are making it harder for the best American beer brands to sell
Hispanic consumers’ decreased social engagement due to worries about immigration enforcement is linked to a decline in beer sales, according to Constellation Brands.
The powerful company Constellation Brands, which owns Modelo and Corona, is warning of a sharp decline in beer sales and attributes it in large part to growing anxieties among the Hispanic community.
“Beer is very important to our Hispanic consumer, which makes up about half of our business,” CEO Bill Newlands said on the company’s most recent earnings call. He did observe a concerning pattern, though: “The occasions on which beer is consumed have reduced … In addition to having fewer social gatherings at home, people are also going out to eat less frequently than they used to.
It’s evident from the figures. Shipments of Constellation’s beer fell 3.3% in the most recent quarter, which was marginally worse than the 2.4% decline that Wall Street had predicted. Although sales of Modelo Especial are declining, it is still the best-selling beer in America.
As Dave Williams of Bump Williams Consulting noted, “many Hispanic consumers are afraid to leave their home or …deviate from their routine or go out.” Concerns about “recent ICE raids or deportation scares” are to blame for the change, he said, adding that it impacts customers regardless of their immigration status.
The problem is made worse by the slower expansion in the construction industry, which provides a significant number of jobs for Constellation’s main clients. In May, the field’s job growth slowed to 1.5% from 2.8% in the previous year.
While wine and spirits sales are predicted to decline by as much as 20% this fiscal year, the business anticipates beer sales to climb by 0% to 3% despite the slowdown.
