Corona beer owner raises red flag about alarming consumer trend
Constellation Brands () , which owns top beer brands Corona and Modelo, has been struggling to attract customers over the past few months, and its CEO is calling out the source of the problem.
In Constellation Brands' first-quarter earnings report for 2025, it revealed that its net sales in beer declined by 2% year-over-year, while net sales in wine and spirits decreased by a whopping 28%.
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The sharp decline in sales contributed to the company generating only $714 million in operating income, which is 24% lower than what it earned during the same time period last year.In the report, Constellation Brands said that 'the current socioeconomic environment' contributed to weak consumer demand.
During an earnings call on July 1, Constellation Brands CEO Bill Newlands said the company saw a 'significant amount of consumer concern' during the quarter, especially among Hispanic and non-Hispanic consumers, which has prompted a sharp change in their spending habits.
'Both Hispanic and non-Hispanic consumers are concerned about inflation and about cost structure,' said Newlands. 'But I also would point out that the percentage of alcohol in the basket has remained constant, even though the basket has gotten smaller relative to what consumers are doing with consumer goods.'
This concern comes at a time when inflation remains high, and President Donald Trump's tariff policy has led to uncertainty about the economy, raising worries about a possible recession.
According to a recent survey from market research company Numerator, 64% of consumers are worried that tariffs will raise prices on everyday goods.Newlands emphasized that Hispanic customers reflect about half of Constellation Brands' business, and they still remain 'very interested' in beer. However, they are, like many other consumer groups, scaling back social gatherings to save money.
'So when [we] look at the fact that consumers are not going out to eat as much as they had; they're having less social occasions at home, [but] it doesn't change their interest in consumption of beer,' said Newlands. 'It simply has been that those occasions have been decreased.'
Constellation Brands recently conducted a survey of both Hispanic and non-Hispanic consumers and found that 70% of consumers are concerned about their personal finances.
In response to these worries, consumers said that they have scaled back social gatherings with friends and family in public spaces and at homes over the past three months. They are also shopping less at convenience stores or gas stations, two of the top places to purchase alcoholic beverages.
To help combat this alarming consumer trend, Constellation Brands is making a few tweaks to its pricing.
'I would point out where we're spending a lot of time is in price pack architecture....it's an area where as the consumer may be more concerned about inflationary trends, it would be important to have the right pack set at the right price points, so that no matter what the consumer has available to them to spend, we have a product available,' said Newlands.
The weak consumer demand also comes during a time when many Americans are changing their tune about alcohol consumption.
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A survey from Gallup last year found that 45% of Americans believe drinking one or two alcoholic beverages a day is harmful to one's health. This is a six-percentage-point increase, compared to results from last year, and a 17-point increase compared with responses in 2018.
Amid this change in attitude, beer, wine, and spirit sales in the U.S. declined in 2024.
In addition, then-U.S. Surgeon General Dr. Vivek Murthy released an advisory in January that highlights a direct link between alcohol consumption and increased cancer risk. The advisory may make it extra challenging for the alcohol industry to experience a quick recovery in sales.Corona beer owner raises red flag about alarming consumer trend first appeared on TheStreet on Jul 5, 2025
This story was originally reported by TheStreet on Jul 5, 2025, where it first appeared.
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