If you thought that beer sales and the current president are completely unrelated topics, I have some news for you.
Drama and controversy eventually work their way into most aspects of life, and politics (and even alcohol) are certainly no exceptions.
Let’s unpack this a bit.
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You might not recognize the name, but you’ve likely heard of their popular brands: Modelo, Corona, and Pacifico.
Modelo took over the #1 spot for most-bought beer in the United States after a marketing controversy by Anheuser-Busch (maker of Bud Light) cost them that spot in 2023.
We’ll revisit that whole fiasco later, but first, let’s look at the issues Constellation Brands is facing.
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Earnings for Constellation Brands fell short of Wall Street predictions in its latest quarter. Not only that, but its beer sales fell by 2%.
What’s causing the top-selling beer brand in the United States to have shakier sales all of a sudden?
There are a few factors, and yes, some have to do with the current administration.
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Hispanic and Latino customers accounted for nearly a third of Constellation Brands’ consumer base in 2023, compared to only 13% for Anheuser-Busch (remember that stat for later).
Constellation Brands acknowledges the importance of demographics, with its executive vice president and managing director saying, “Hispanic consumers are the single most important consumer group for our beer business.”
Customers from these demographics are spending less in general, and that includes beer. The most obvious reasons also have to do with the political landscape…
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According to the CEO of Constellation Brands, unemployment among Hispanics has seen an uptick during the latest quarter, impacting spending and therefore the brand’s sales.
Tariffs on aluminum for the cans likely also play a role in the decline in sales, as they doubled from 25% to 50% earlier this year.
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Constellation’s CEO acknowledged the importance of Hispanics’ spending habits on their sales, but also pointed to financial uncertainty in general. “When you see a fair amount of change, both Hispanic and non-Hispanic consumers are concerned about inflation and about cost structure”, says the CEO.
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Another significant reason behind Hispanics and Latinos pulling back in beer spending is due to their concern over Trump’s immigration policy, ICE raids, and related potential job and financial uncertainty.
All of these factors are creating the perfect storm for Constellation Brands, which is threatening Modelo’s #1 spot as most-bought beer. Why did Bud Light lose that spot, anyhow?
Well, I hope you like controversy…
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On April 1, 2023, Anheuser-Busch made a marketing decision that cost Bud Light its previously held #1 spot for most popular beer in the United States.
Bud Light featured a social media promotion featuring transgender TikTok personality (Dylan Mulvaney), which did not sit well with a significant portion of its consumers.
Not only did it lose its #1 spot, but sales of Bud Light plummeted as some previously loyal consumers boycotted the brand.
And they lost quite a bit…
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According to CNN, the marketing fiasco led to a 10% drop in revenue in the U.S. and likely cost the brand 1.3 billion dollars in lost sales. The losses rippled into the following year, with sales down nearly 30% year over year in January 2025.
Bud Light’s vice president of marketing was put on leave following the marketing controversy. So yeah…things got messy quickly.
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It’s hard to say if Bud Light will rise to the top again, given the political and financial climate impacting a large part of Modelo’s consumer base.
Hispanics represent a big portion of Modelo’s customers, but economic uncertainty is everywhere, regardless of ethnicity.
According to Fortune, beer consumption fell to its lowest in over 20 years last year. There are a few hypotheses as to why Americans are drinking less beer overall…
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Not only is alcohol an additional strain on Americans’ budgets in a time of economic and financial uncertainty, but health considerations also factor in.
With many people becoming more health-conscious and making healthy lifestyle changes overall, beer isn’t as high on the priority list anymore.
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Time will tell if Constellation’s Modelo falls below the top spot as the most-bought beer as things continue to unfold in our country.
Even if they fall below #1, do you think Bud Light will recover enough to work its way back up the ranks?
Share your predictions in the comments!
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