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From the beginning of his second presidential campaign, President Donald Trump expressed his commitment to cracking down on illegal immigration, and he has begun to enact his political agenda now that he is back in office.
Trump's policy changes and mass deportation plans have heightened the U.S. Hispanic community's concerns.
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And with such challenges emerging amid rising costs of essential goods and high Hispanic unemployment rates, these consumers have become more cautious in their spending.
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The Hispanic community makes up around 19.5% of the total U.S. population, representing the nation's largest racial minority and a large part of the economy. This has caused the softening in spending to begin trickling down, affecting companies that depend on those key consumers.
Constellation Brands wins a key audience
Constellation Brands (STZ) is a leading international producer and marketer of beer, wine, and spirits. This company has been serving millions of consumers since 1945 and rose to fame thanks to its renowned liquor brands.
Beer is one of Constellation Brands' biggest revenue sources. It owns popular brands such as Modelo, Corona, Especial, and Pacífico.
Although beer is consumed globally, the Hispanic community is loyal to these beer brands and takes the lead in demand, making up around 50% of Constellation Brands' overall beer business, according to the company.
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However, recent immigration policies and economic uncertainty have challenged the Hispanic consumer, contributing to the company's flat net beer sales and nearly 2% decline in shipments during the fourth quarter of fiscal 2025, as stated in its earnings report.
"Social gatherings, an area where the Hispanic consumer often consumes beer, are declining today as part of these overarching concerns they have," said Constellation Brands CEO Bill Newlands in an earnings call.
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Constellation Brands sees pullback in spending from its top customer
Despite the turbulent times, Constellation Brands believes that sales will improve once these issues have died down. So, to keep the business running and fight the slowdown, the company will focus on what it can control — distribution, innovation, and improving brand awareness.
"When you look at our awareness levels versus some of the competition, when you look at our shelf positions versus some of the larger competition, we still have a lot of runway to grow. We have a lot of expansion capability of reaching," said Newlands.