In April 2024, Salvador Gutierrez got a big surprise.
The backdrop: As ICE activity heats up, Latino shoppers seem to be out and about less. According to a mid-May report from Kantar, a marketing data and analysis company, supermarket shopping among Latinos was down 11.3% in the first quarter of 2025, compared to the same time last year. Drug store visits were down 7.5%, and convenience store visits were down 9.7%. That’s compared to declines of 1.9%, 1.5% and 2.3% for of non-Hispanic shoppers, respectively. Meanwhile, more Hispanic shoppers are turning to online shopping instead of showing up in stores; online shopping has increased 7% among this group between the fourth quarter of 2024 and the first quarter of 2025.
“Modelo is over 50% Hispanic in terms of its demographic base,” William A. Newlands, President and CEO of Constellation Brands, said on an April earnings call. “So this decline in efforts to go to restaurants, to have social gatherings, things that are very much beer occasions, have softened in the more recent term. And it’s going to be key to watch as to how that impact continues, or doesn’t continue, as we go forward.”
Bud Light’s collaboration with trans influencer Dylan Mulvaney in 2023 resulted in an anti-trans backlash and a beer boycott, knocking Bud Light out of the number one spot among U.S. consumers. That left an opening for Modelo Especial to nab the top spot.
The company has been the growth powerhouse of the beer industry for well over a decade, Benj Steinman, president of Beer Market Industries, the leading trade publisher on the brewing industry, tells Fortune. Between 2014 and 2024, Constellation increased U.S. beer production by 137.9%, going from 13 million barrels to 31 million barrels over the course of the decade. In that same period of time, the company also jumped from a 6.1 market share to 15.8 market share, gaining almost 10 share points.
“Constellation had this strong Hispanic tailwind that’s absolutely one of the major factors in its growth,” Steinman says.
Gerald Pascarelli, managing director of equity research at Needham and Company, agrees. “Modelo would have overtaken Bud Light, just given the growth trajectory that they had,” he says. “Hispanics are typically a very good cohort to have exposure to.”
“It doesn’t necessarily appear to be that it is an economic concern that’s driving this behavior,” says Mary Brett Whitfield, a senior vice president at Kantar Retail. “We do see Hispanic shoppers holding back because of what’s happening in the broader socio-political environment. There are a lot of tension points for them.”
To be sure, business is still good for Constellation. Consolidated net sales are up 2.41% for the latest fiscal year, and beer sales are up 4.6%. Analysts are bullish on the company’s prospects, and Pascarelli calls the long-term buying power for Latinos in the U.S. “very favorable.” But Constellation still must weather this moment in time, he adds, and the “outsized pressure given to the demographic makeup of their portfolio.”
Newlands recently said at a company conference presentation that it had already diversified the customer base for brands like Modelo, and would continue to do so moving forward. “Modelo was 80% Hispanic several years ago. Today, it’s 55%. So we’ve spent a lot of time, a lot of energy, a lot of media dollars developing in that consumer marketplace. And I think we’re in a good position to continue to see that develop as time goes forward,” he said.
Executives at Constellation have also said they will continue to spend on marketing, something that industry-watchers say will be important. Paying attention to how shoppers are buying differently will also be key, according to Whitfield.
“I think part of the solution may be not focusing on trying to get Hispanic shoppers necessarily back into the store, but to keep Hispanic shoppers within the retailer ecosystem,” she says. “It may be an opportunity for retailers or brands to target those shoppers on apps…sell[ing] via online mechanisms…I certainly anticipate that brands will start to think about [that].”
Constellation seems to be thinking about this as a short term problem, and Newlands has referred to “near term headwinds” on a recent earnings call.
“We believe there’s still a lot of opportunity for our business going forward that most of what is going on is socioeconomic issues that we believe will moderate over time,” he said. “The question is, what’s that time horizon? That’s a bit of a difficult one to answer.”
