Two brewing giants have expressed their concerns over the current consumer sentiment among the Hispanic population in the US and the ensuing impact on their brands.
Constellation Brands and Heineken have announced their quarterly results this month, with the former booking a 1% sales rise in the three months to the end of February last week and Heineken reporting a flat calendar-Q1 performance earlier today. In a subsequent call with analysts, Constellation CEO Bill Newlands said that “a lot of consumers in the Hispanic community are concerned right now” in the US, while Heineken also referenced the current mood among the market’s Hispanic consumers.
Noting that Hispanic consumers account for “roughly 50%” of Constellation’s beer business (which operates only in the US), Newlands added: “Over half are concerned relative to immigration issues and how those impact [them]. A number of them are concerned about job losses in industries that have a high Latino employment base.
“That has tended to mean that the [Hispanic] consumer has pulled back on spending on a number of categories. The single biggest one, interestingly, is restaurants… . Beer is quite a way down the list, but it’s certainly on the list because things like social gatherings – an area where the Hispanic consumer often consumes beer – are declining today as part of these overarching concerns that they have. Therefore, all of that has had impact on our business.”
The chief executive caveated, however, that “the Hispanic consumer continues to show extraordinarily loyalty to our brands”.
Meanwhile, Heineken’s ‘Americas’ region delivered a 2.1% sales slip due in part to the later Easter break this year (Easter last year fell at the end of March). At the same time, “market weakness” was observed in the US where “Hispanic consumers” are exhibiting “weak sentiment”, the company said.
Elsewhere in the region, Mexico was up by low single digits for the group, while Brazil was down by mid-single digits on the cycling of price increases implemented in April last year.
