Constellation Brands warns beer sales under pressure as Hispanic consumers cut back

By Neil J Kanatt

Jan 8 (Reuters) – Constellation Brands executives said on Thursday beer sales could remain volatile and under pressure as economic uncertainty and high unemployment among Hispanic consumers, its core customer base, continue to weigh on spending.

Alcohol sales have weakened as Hispanic consumers pulled back on purchases amid the Trump administration’s crackdown on immigration and a broader economic uncertainty driven by volatile trade policies and rising living costs.

Constellation’s beer portfolio, which includes brands such as Corona and Modelo Especial, has long benefited from strong demand among Hispanic consumers, who account for nearly half of the company’s U.S. beer sales.

“The beer category overall, it still remains challenged, and it’s largely around the Hispanic consumers,” CEO Bill Newlands said on a post-earnings call.

Newlands said 75% of the Hispanic consumers are concerned about the socioeconomic environment. The community’s shoppers are spending more on essentials, as unemployment rates remain elevated relative to the rest of the country.

The company’s shares, however, rose about 4% on Thursday, a day after it reported third-quarter sales and profit above muted analyst expectations. The stock has fallen nearly 40% in 2025.

Depletion volumes, the rate at which products are sold, declined for the third consecutive quarter for the beer segment, down 3%. It continues to see a 2% to 4% drop in annual beer sales.

“We’re cautiously optimistic that we’re on the sort of the plateau of where business will be, but it’s been really tough to judge,” said Newlands.

Constellation will look to position itself well for the demand lift given the upcoming 2026 FIFA world cup that tends to over-index in Hispanic community and in social gatherings that favor beer consumption, Morningstar analyst Dan Su said.

Separately, British retailer Associated British Foods also issued a profit warning on Thursday, blaming weaker U.S. demand for food ingredients, particularly among Hispanic shoppers.  

(Reporting by Neil J Kanatt and Koyena Das in Bengaluru; Editing by Shilpi Majumdar)