The Oxnard, California-based meals vendor, who made his residing promoting candy drinks known as Agua Frescas, acquired a brand new personalized avenue cart and $5,000 to raise his enterprise. The test got here courtesy of a brand new product line from the Modelo beer model, in keeping with a press launch from the corporate. “I started this business to make ends meet but what I wasn’t prepared for was the amount of love and support I received from my community. They rallied behind me to support my business and my dream,” stated Gutierrez, who thanked Modelo and stated he would use the brand new cart to “make my daughters proud.” Later that yr, Modelo created a ghost kitchen in New York Metropolis to commemorate Día de Los Muertos, that includes dishes like beer battered fish tacos and pollo asado in a beer citrus marinade. The entire dishes had been developed by Hispanic cooks to have fun the legacy of their family members who’ve died.
The efforts to achieve the Latino neighborhood and their wallets over time have paid off: In 2023 Modelo scored a serious coup, turning into the most well-liked beer within the U.S., beating out Bud Gentle. However there are indicators that Trump-era immigration nervousness and fears over ICE raids are altering the spending habits of Latino customers, spelling hassle for manufacturers that enchantment to that cohort. (Constellation Manufacturers, the corporate that controls Modelo within the U.S., declined Fortune’s request for an interview, and declined to remark for this story.)
Constellation, which additionally distributes Corona and Pacifico,is available in at Quantity 418 on the Fortune 500 record. Internet beer gross sales for the corporate remained comparatively unchanged for the fourth quarter of 2024. However shipments to retail clients had been down round 1%, largely pushed by decreases in Modelo Especial, Corona Additional, and the Modelo Chelada, in keeping with the corporate. Constellation has additionally lowered its beer internet gross sales development price outlook for fiscal yr 2026 to between 0% and three%, down from 4% to 7% for 2025.
The backdrop: As ICE exercise heats up, Latino consumers appear to be out and about much less. In keeping with a mid-Might report from Kantar, a advertising and marketing knowledge and evaluation firm, grocery store buying amongst Latinos was down 11.3% within the first quarter of 2025, in comparison with the identical time final yr. Drug retailer visits had been down 7.5%, and comfort retailer visits had been down 9.7%. That’s in comparison with declines of 1.9%, 1.5% and a couple of.3% for of non-Hispanic consumers, respectively. In the meantime, extra Hispanic consumers are turning to on-line buying as a substitute of exhibiting up in shops; on-line buying has elevated 7% amongst this group between the fourth quarter of 2024 and the primary quarter of 2025.
“Modelo is over 50% Hispanic in terms of its demographic base,” William A. Newlands, President and CEO of Constellation Manufacturers, stated on an April earnings name. “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.”
How Modelo took first prize
Bud Gentle’s collaboration with trans influencer Dylan Mulvaney in 2023 resulted in an anti-trans backlash and a beer boycott, knocking Bud Gentle out of the primary spot amongst U.S. customers. That left a gap for Modelo Especial to nab the highest spot.
An enormous issue within the model’s success has been its resonance with the more and more highly effective U.S. Latino shopper. Whereas Newlands has stated the shopper base for Modelo is round 50% Hispanic, government vice chairman and president of the beer division, James A. Sabia, stated on the firm’s convention presentation in Might that round 35% of its general gross sales quantity throughout all of its totally different manufacturers goes to Hispanic clients.
The corporate has been the expansion powerhouse of the beer {industry} for effectively over a decade, Benj Steinman, president of Beer Market Industries, the main commerce writer on the brewing {industry}, tells Fortune. Between 2014 and 2024, Constellation elevated U.S. beer manufacturing by 137.9%, going from 13 million barrels to 31 million barrels over the course of the last decade. In that very same time frame, the corporate additionally jumped from a 6.1 market share to fifteen.8 market share, gaining nearly 10 share factors.
“Constellation had this strong Hispanic tailwind that’s absolutely one of the major factors in its growth,” Steinman says.
Gerald Pascarelli, managing director of fairness analysis at Needham and Firm, 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.”
Round 19.3% of the nation identifies as Hispanic or Latino, in keeping with the U.S. Census, a bunch that has dramatically elevated its spending energy over the previous decade. The financial output of this cohort went from $1.6 trillion in 2010 to $4 trillion in 2023, in keeping with the U.S. Latino GDP Report launched by California Lutheran College and UCLA Well being. However the group has seen a major decline in year-over-year spending in comparison with non-hispanic consumers, in keeping with the Kantar report.
“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 chairman 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 make sure, enterprise remains to be good for Constellation. Consolidated internet gross sales are up 2.41% for the most recent fiscal yr, and beer gross sales are up 4.6%. Analysts are bullish on the corporate’s prospects, and Pascarelli calls the long-term shopping for energy for Latinos within the U.S. “very favorable.” However Constellation nonetheless should climate this second in time, he provides, and the “outsized pressure given to the demographic makeup of their portfolio.”
How Trump’s insurance policies are affecting companies
Constellation isn’t the one main model intently watching how Trump’s immigration crackdown impacts enterprise. A number of main consumer-facing firms, together with Keurig Dr Pepper, Walmart, and Coca-Cola, have publicly mentioned how immigration insurance policies might affect their backside line.
Newlands just lately stated at an organization convention presentation that it had already diversified the shopper base for manufacturers like Modelo, and would proceed to take action transferring ahead. “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 stated.
Executives at Constellation have additionally stated they are going to proceed to spend on advertising and marketing, one thing that industry-watchers say will probably be vital. Being attentive to how consumers are shopping for in a different way may also be key, in keeping with 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 appears to be interested by this as a brief time period downside, and Newlands has referred to “near term headwinds” on a latest earnings name.
“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 stated. “The question is, what’s that time horizon? That’s a bit of a difficult one to answer.”
