Corona and Modelo sales plummet as Hispanic customers avoid social gatherings out of deportation fears
Beer giant Constellation Brands just revealed a shocking connection between Trump's immigration policies and your favorite Mexican beers.
A Brewing Crisis
The maker of popular Mexican beer brands Corona and Modelo is facing an unexpected challenge that has nothing to do with brewing techniques or competition.
Instead, it's political policy causing the company headaches.
Constellation Brands reported a troubling 1% drop in beer shipments last quarter, and the reason has raised eyebrows across both the business and political worlds.
The decline comes amid aggressive immigration enforcement measures implemented by the Trump administration since taking office.
These policies have included invoking rarely used wartime authorities and have led to some high-profile mistakes, including the erroneous deportation of a Salvadoran man in recent weeks.
Changing Consumer Behavior
For beer companies, the implications extend far beyond politics.
Constellation Brands CEO William Newlands addressed the situation directly during a Thursday analyst call, pointing to a dramatic shift in consumer behavior.
"A lot of consumers in the Hispanic community are concerned right now," Newlands explained. "Social gatherings, an area where the Hispanic consumer often consumes beer, are declining today as part of these overarching concerns that they have."
The company estimates that approximately half of its U.S. customers are Hispanic.
And they're not the only ones noticing the trend.
Wider Economic Impact
Several major retailers and consumer goods companies have reported similar patterns in recent weeks.
Burlington, Foot Locker, Colgate-Palmolive, and Monster have all noted sluggish sales among Hispanic customers.
John Faucher, vice president at Colgate-Palmolive, acknowledged the trend at a conference last month.
"There obviously is an impact on Hispanic demand, as we've seen, lower traffic from Hispanic consumers," he stated.
Market research firm Circana has found that discretionary purchases among Hispanic consumers have fallen at a faster rate than among non-Hispanic customers so far this year.
The Root Cause Revealed
The surprising reason behind this sales decline? Fear.
According to Constellation's CEO, Hispanic customers are actively avoiding social gatherings and public spaces where they might typically enjoy these popular Mexican beers.
Many are concerned about being swept up in deportation operations, even if they are legal residents or citizens.
This fear has transformed shopping habits as well.
In an interview with the Wall Street Journal, Newlands revealed that some Latino shoppers are now avoiding smaller convenience stores and bodegas that primarily serve Hispanic communities.
Instead, they're shifting their shopping to large retail chains where they can "blend into the crowd" and feel less targeted.
The sales decline was most pronounced at retailers located in neighborhoods with large Hispanic populations.
Analyst Nik Modi of RBC Capital Markets summed up the situation in a note to clients last week.
"A consistent theme we have heard over the last several months has been mounting pressure among [Hispanic consumers] stemming from concerns on immigration policy," Modi wrote. "This has manifested in pull back from retail."
This consumer pullback represents yet another economic pressure point alongside tariffs that analysts warn could contribute to a potential recession.
For now, companies like Constellation Brands are left to navigate this unexpected intersection of politics, immigration policy, and consumer behavior—with their bottom lines caught in the crossfire.
