Modelo and Corona owner Constellation Brands (STZ) is warning about the impact President Trump’s immigration crackdown is having on its beer business.
Executives said consumer sentiment deteriorated and socioeconomic headwinds increased during its latest quarter amid rising concerns among its core Hispanic consumer base.
“Our Hispanic consumer, which reflects roughly half our business … is very interested in beer,” CEO Bill Newlands said on a call with investors.
But, Newlands said, “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.”
Beer shipment volumes fell 3.3% in the quarter, Constellation said Tuesday. The company’s Modelo Especial is the bestselling beer in the US.
“A lot of Hispanic consumers are apprehensive to leave their house or … deviate from their routine or go out,” Dave Williams of Bump Williams Consulting told Yahoo Finance. “That results in fewer opportunities and occasions where beer would slot into the mix.”
“The abruptness of this slowdown … makes me feel like there’s a lot more of it tied to the cyclical aspect of these consumer behaviors due to the recent ICE raids or deportation scares, whether you’re legal or not … that’s on top of the other structural aspects that beer brands in general,” Williams added.
The company also highlighted that while “total population and Hispanic unemployment rates remained at similar levels as in the preceding quarter,” employment growth for consumers who tend to be its core audience, like construction workers, saw the sector’s growth decelerate “noticeably.”
According to the Bureau of Labor Statistics, construction job growth has slowed consistently this year, falling to a rate of 1.5% in May, down from 2.8% a year ago.
In Constellation Brands’ fiscal first quarter 2026 results, the company saw its volume growth for beer decline 3.3%, a tick more than the 2.4% drop Wall Street expected. Its revenue and adjusted earnings also just missed the Street’s expectations, coming in at $2.52 billion and $3.22 per share. The Street was looking for $2.55 billion in revenue and earnings of $3.32 per share.
For the fiscal year, the company reiterated that it expects organic net sales growth for its beer category to be in the range of 0%-3% growth; it expects wine and spirits sales to decline 17%-20%.
Williams said while Modelo Especial still holds the title of top beer brand in the US, it was “coming up against some size and scale challenges” compared to recent years of growth, especially after taking the top spot from Anheuser-Busch’s (BUD) Bud Light two years ago.
