Modelo and Corona are unexpected casualties of Trump’s immigration crackdown

By Nathaniel Meyersohn, CNN

New York (CNN) — Constellation Brands, the US owner of Modelo Especial and Corona, bet big on Latino customers for growth. But that strategy is unraveling under the Trump administration’s mass deportation push.

Many Latino consumers, both legal and undocumented, are fearful of venturing out in public to stores, restaurants and bars due to the immigration enforcement blitz, according to customer surveys, companies and market research. Big parties and celebrations where beer often flowed have been scaled back or canceled. Job cuts in industries with large immigrant workforces have squeezed finances, as has a broader cost-of-living crunch.

Constellation’s sales have plunged, Modelo lost its top-selling beer spot to Michelob Ultra, and its stock has dropped nearly 40% this year, making it one of the worst-performing companies on the S&P 500.

The company’s struggles illustrate how President Donald Trump’s immigration policies have ricocheted to unexpected corners of the economy and corporate America, upending years of wagers by some of America’s largest companies on the growing purchasing power of Latino consumers.

These pressures have hit Constellation harder than most companies because Latinos make up roughly half of Constellation’s beer customers – by far the largest concentration in the industry. California, home to the largest Latino population in America and a primary target of raids by US Immigration and Customs Enforcement, is also Constellation’s biggest market.

“Hispanic consumers are the single-most important consumer group for our beer business,” a Constellation executive said last year. They have “been the foundation of how we’ve been able to drive growth.”

Constellation declined to comment for this article. The White House did not respond to request for comment.

Becoming a beer giant

In 2013, Constellation acquired the sole US rights to distribute Grupo Modelo, the Mexican beer giant that brews Corona, Modelo, Pacifico, Victoria and other beers.

The deal transformed Constellation from a mid-sized wine seller in upstate New York into one of the largest alcohol companies in the world. It was also a bet on the long-term potential of Latino consumers, whose population in the United States has nearly doubled over the past 25 years to 68 million.

“Why we’re so confident about the future is our Hispanic consumers,” Constellation said in 2013 following the purchase.

The company launched new lines of Modelo based on popular drinks in Mexico; advertised in Spanish-language media; and saturated stores in heavily Hispanic markets in California, Texas and Florida. If an ad failed to test well with both Hispanic and non-Hispanic consumers, it didn’t run, the company said in 2023.

These efforts made Constellation a rare bright spot in a slumping US beer industry as consumers shifted toward non-alcoholic drinks and cannabis. Drinking has declined among White adults, according to Gallup polling, but it has remained fairly steady among people of color.

“Constellation has been on this wonderful ascent because they had such a strong Latino business,” said Martin Stock, who worked on Constellation’s beer brands for six years as CEO of advertising agency Cavalry. “They had brands that had a leg in Latino culture and they then broadened them out.”

Modelo overtook Bud Light as the top-selling beer in America in 2023, and Corona became the fifth-largest beer by sales.

“The beer business in general is having a brutal time,” Stock said. “Constellation was an exception. They ran counter to the beer trends up until about 10 months ago.”

‘Anti-our business’

The Trump administration’s sweeping deportation push has rattled companies of all sizes, particularly in immigrant corridors in Los Angeles; Chicago; Charlotte, North Carolina; and other major cities.

Nearly half of US small business owners say that increased immigration enforcement has had a negative impact on their business, according to a poll released in November by Small Business Majority, an advocacy group. In Texas, for example, restaurant owners say customer traffic has dropped and employees have quit, according to a survey last month from the Texas Restaurant Association, a trade group.

Other corporate giants are also hurting. Burlington, Wingstop, Colgate-Palmolive, PepsiCo and others have all reported sales declines at stores and restaurants in heavily Latino neighborhoods.

Constellation warned investors in its annual securities filing in April that changes in immigration laws and enforcement “impacting consumers, particularly Hispanic consumers,” are a risk to its business.

Its beer shipments to US retailers plunged 8.7% last quarter and are expected to decline by up to 4% in its 2026 fiscal year.

Latino customers have changed their shopping habits in ways that are “anti-our business,” CEO Bill Newlands said in October.

“The Hispanic consumer is very concerned at the moment,” he said. “The results that (we) are seeing in high Hispanic zip code areas is significantly worse” than in other markets.

Seventy-eight percent of Hispanic adults say economic conditions today are fair or poor, according to a Pew poll released in November. Hispanic consumers are more likely than other Americans to rate their current economic situation negatively, Pew found.

The big question for Constellation is if the pullback by Latino customers is fleeting – or if it represents a long-term threat to the company.

Some analysts say Constellation can mitigate the downturn because it has broadened the market for Mexican beers to non-Hispanic consumers. They expect Constellation to both expand distribution and marketing in areas with lower Latino populations and to roll out smaller, cheaper pack sizes to draw economically strapped shoppers.

But Constellation’s recovery hinges in large part on whether the Trump administration ramps up deportations, sending consumers further into hiding and shrinking the market.

The volatility is “unprecedented,” Newlands said. “We’re cautiously – and I would stress that word again – cautiously optimistic that we’ve hit the bottom here.”

The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.