The sentiment among Hispanic beer drinkers in the US, concerned about the economy and immigration policy, is showing signs of improving, Constellation Brands has said.
Last month, the Modelo and Pacifico brewer said unease among Hispanic consumers in the US had put pressure on its sales of beer, with, for example, fewer visits to bars and restaurants. Constellation’s comments at the time were also echoed by Dutch brewing giant Heineken.
Speaking at the Goldman Sachs Global Staples Forum in New York yesterday (13 May), Jim Sabia, the president of Constellation’s beer business, said retail outlets had seen custom decline significantly in recent months but suggested the anxiety among shoppers was easing.
“I’ve been out of retail a lot recently going out to California, going to some of these accounts where two years ago at one o’clock it was packed,” Sabia said. “This year at one o’clock, very few people.
“There is a fear of the ICE [Immigration and Customs Enforcement] raids. There’s a fear out there, so these consumers are changing their behaviour. That’s in the off-premise trade. In the on-premise trade, they’re cutting back on social events. They’re cutting back on restaurants.”
Sabia said 35% of Constellation’s beer sales, when measured in volumes, were to Hispanic consumers. That increases to around 50% for Modelo Especial.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“We’re starting to see it get better,” Sabia said. “Even the day labourers we’re starting to see come out more. We’re confident that this is non-structural and our brands are healthy, consumers love our brands and we’re going to continue to do what we control.”
In Constellation’s current 2025/26 financial year, the company sees net sales from its beer business being flat at best up to 3% higher year on year.
Last month, the company also provided guidance to investors for its 2027 and 2028 financial years. The company sees its net sales growing by around 2-4% each year. Beer net sales are forecast to rise at the same amount, versus an earlier prediction of growth of 7-9%.
Sabia said Constellation was continuing to invest in advertising. “We spent more money in marketing last year,” he said. “We’re going to continue to do what we’ve done that has made us successful for the last fifteen years. When this consumer comes out and which we think they will – the Hispanic consumer but also the general market consumer – we’re going to be positioned in a really good spot.”
Bonnie Herzog, the Goldman Sachs analyst who hosted Constellation’s session at the event, asked if the company thought its beer business could “ultimately return to the high single-digit net sales growth” it had generated in recent years. “Is that just unrealistic given the base has become so large?” she asked.
“The base has gotten large, agreed,” Sabia said. “In 2010, we had, like, six [per cent market] share and now we have, like, a 19 share. However, if you think about our share, you think about convenience stores, usually 94% of beer is sold cold. We have about a 24 share of dollars.
“However, in grocery, we have 14, so there’s a nine-point spread from convenience to grocery. That’s the opportunity. You go to some of these markets and grocery stores have an assortment with a lot of craft and specialty and a lot of other brands where we’re starting to gain some traction, not just with Corona and Modelo but now we’re starting to see Pacifico, Victoria, Familiar, Sunbrew. We don’t think it’s the size of our portfolio and the volume. We just think this consumer needs to get healthy again.”
Sabia also outlined the opportunity he sees for Constellation to gain more on-trade listings for Modelo Especial on draught.
“On-premise is a huge opportunity for Modelo Especial. Draught handles are so incredibly important. We’re the fourth-largest draught handle in the country… but, as you move east, coming from California with Modelo Especial, as you go into Chicago and Texas and New York and New Jersey and Florida, Modelo Especial still has so much runway in terms of distribution.”
Nevertheless, Constellation has been seeing pressure on sales of Corona Extra and the company’s management was asked how it planned to return the brand to growth.
“The goal is to return it to growth, but it’s not mandatory to hit our guidance without it,” Sabia said.
He pointed to Corona Extra as “the number one beer brand” by volume in New York City and Miami but said there had been “cannibalisation” of sales in California by fellow Constellation brands Modelo and Pacifico. Price increases had weighed on sales, he added.
“Those are the drags but what are the drivers? The drivers are getting back to the essence of the brand and the marketing team did a great job of getting back to the beach, getting back to the essence of the brand,” he said. “And then, as we think about it, what are the [accounts] that we have to win in and do we take more of a regional approach? Always do some national overlays but take a more tactical regional approach.
“And then what do we do with price-pack architecture? There’s a lot we can do with Corona Extra, but making our plan short term, long term is not predicated getting back to flat.”
