Modelo Especial owner Constellation Brands’ beer sales are taking a hit as demand from Hispanic populations in key states slows down amid Trump’s crackdown on immigration, company executives said Thursday.
President Trump has kicked off a sweeping immigration crackdown after taking office in January, ratcheting up pressures on the Hispanic consumers burdened by higher prices of food and other essentials as well as elevated unemployment rates.
Modelo Especial is made exclusively in Mexico, and is imported and marketed in the United States by Constellation Brands.
The brand has enjoyed huge popularity in the past couple of years, overtaking Bud Light as the top-selling beer brand in the US in 2023.
However, the momentum is now waning, with Constellation noting a sizable demand slump in its top sales states and zip codes with larger Hispanic populations.
After markets close on Wednesday, the brewer projected a smaller-than-expected annual adjusted profit, expecting steep tariffs to weigh on its business.
Latino customers, who represent roughly half of Modelo’s customer base, have pulled back on social gatherings — a key occasion for beer consumption, according to Constellation Brands’ CEO Bill Newlands.
“Efforts to go to restaurants, to have social gatherings, things that are very much beer occasions, have softened in the more recent term,” he said during its fourth-quarter earnings call.
Constellation Brands’ beers enjoy the highest level of loyalty among Hispanic consumers relative to any other major beer supplier in the US, the company said in its prepared remarks.
Newlands said the company’s research also found that Hispanic consumers were under pressure from job losses in industries with a high Latino employment base.
“We think the quick change in tone/outlook at least partially reflects the likely reality that the company was benefiting over the past number of years from loose immigration policy,” JPMorgan analyst Andrea Teixeira said in a note.
Meanwhile, a 25% levy on aluminum and other broader tariffs under the Trump administration also threaten to lead to price hikes for these beers.
