Trump’s immigration enforcement blitz is having an unexpected, but logical effect on the sales of imported beers. Particularly Mexican brands favoured by folks of Latin American extraction. Modelo and Corona are tanking thanks to ICE…
Modelo and Corona – well known across north America – say their sales have tanked since the ICE-administered deportations began.
Fear and loathing
Recent customer surveys, market research and the companies themselves confirm that Latino con-sumers are hunkering down, avoiding cantinas and restaurants – even their local bedegas – for fear of being picked up in ICE sweeps. Observers say they’re even avoiding, or scaling back, the usual family and cultural celebrations.
“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,” writes on CNN.com. “Big parties and celebrations where beer often flowed have been scaled back or can-celed. Job cuts in industries with large immigrant workforces have squeezed finances, as has a broader cost-of-living crunch.”
Unprecedented ‘unpopularitry’
Modelo Especial started this year as the America’s top-selling beer. But over the past few months it’s slipped out of the lead, with it’s stock dropping more than 40 percent. It’s now one of the worst-performing companies on the S&P 500.
Industry observers say Modelo’s plunge is a clear indication of the actual effects of US President Donald Trump’s immigration policies on ‘unexpected corners of the economy’, voiding ‘wagers’ by some of America’s largest companies on the growing purchasing power of a continually growing Latino community.
“Hispanic consumers are the single-most important consumer group for our beer business,” a brewery executive told CNBC last year. They have, “been the foundation of how we’ve been able to drive growth.”
A Constellation of troubles
What many average folks don’t know is, both Modelo and Corona are owned by Constellation Brands, a major world player in the beverage alcohol space.
It was a minority power before its 2013 purchase of the sole US rights to distribute Grupo Modelo, the Mexican beer giant that brews Corona, Modelo, Pacifico, Victoria and other beers.
They made the investment, the company said in a statement at the time, “[because] we’re so confi-dent about the future is our Hispanic consumers.”
Rise and Fall
Modelo overtook Bud Light as the top-selling beer in America in 2023. At the same time, Corona had become the fifth-largest beer by sales.
“Constellation has been on this wonderful ascent because they had such a strong Latino business,” said Martin Stock, CEO of former Onstellation advertising agency Cavalry. “They had brands that had a leg in Latino culture and they then broadened them out.
My take
“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.”
There are more than 68 million residents of Hispanic heritage in the US today. And it appears most of them are laying low. We have not heard of any impact similar to that on Constellation in the food space or elsewhere. But it seems logical that, if Hispanic Americans are trying to stay below ICE’s radar, other market sectors must be suffering too…
~ Maggie J.