The impact of President Donald Trump’s policies extends beyond tariffs, significantly affecting Constellation Brands.
CEO Bill Newlands highlighted on a recent conference call that along with the tariffs imposed on imports from Mexico, the administration’s stringent immigration policies have led to decreased beer sales among Hispanic consumers, a key demographic for the company.
Hispanic consumers account for approximately half of Constellation’s beer sales. However, the company has managed to increase sales overall, largely due to its strategic marketing efforts aimed at non-Hispanic beer drinkers, helping Modelo Especial rise to become the top-selling beer in the U.S.
Despite these successes, Hispanic individuals remain crucial to Constellation’s beer revenues, which represented 78% of the company’s total earnings in the most recent fiscal quarter.
“Many consumers in the Hispanic community are currently facing concerns,” Newlands stated. “More than half are apprehensive about immigration policies and their implications, with a significant number worried about job losses in sectors with high Latino employment.”
This climate of uncertainty has led to reduced spending in various categories among U.S. Hispanic consumers, including restaurants, clothing, and travel, as noted by Newlands.
“Beer might not be a primary concern, but it’s still impacted by the reduction of social gatherings, which is a common context for beer consumption in the Hispanic community,” he added.
In its quarterly report on Wednesday, Constellation provided a bleak outlook for fiscal 2026 and adjusted its medium-term forecasts downward, taking into consideration the effects of the new tariffs. Although Trump temporarily lowered reciprocal tariffs on all nations except China, Constellation’s canned beers imported from Mexico continue to face a 25% aluminum tariff.
Despite the disappointing forecast, the company reported earnings and revenues that surpassed expectations for the quarter. Moreover, Constellation announced plans to divest its lower-end wine brands to concentrate on more premium offerings.
Following this announcement, Constellation’s shares dipped slightly by less than 1% in afternoon trading on Thursday. Since Trump’s election, the stock has witnessed a decline of over 23%.
