Constellation Brands has highlighted an ongoing softening of demand for premium beer in the US, particularly among Hispanic consumers, as economic concerns continue to weigh on household spending.
In commentary from CEO Bill Newlands and CFO Garth Hankinson accompanying the group’s Q2 fiscal 2025 results this week, Constellation said consumer sentiment remains “depressed” relative to last year, with temporary improvements in June and July giving way to a more downbeat tone in August. Its own consumer research found more than 80% of both Hispanic and non-Hispanic respondents expressed concern about the broader US economy, and over 70% were worried about their personal finances.
The group said these concerns are affecting both social and purchasing behaviour, with fewer gatherings and less shopping in convenience and gas channels. This has translated into lower buy rates for high-end beer compared to the previous quarter, with a sharper drop among Hispanic consumers.
Constellation said the trend has had a disproportionate impact on its beer business, which has higher exposure to the Hispanic demographic in the US than the wider market.
This has contributed to another concerning set of results in Constellation’s second quarter, where the brand owner’s total top line in the three months to the end of August finished down by 8% on the corresponding period a year earlier.
Despite subdued volumes, the company said its brand-health metrics “remain strong.” It reported “stable or increasing trends in … consideration for our top four beer brands” and continues to hold “the highest level of loyalty with Hispanic consumers relative to other major beer suppliers in the US”.
After releasing Q1 results in April, Newlands flagged a similar concern over the current consumer sentiment among the country’s Hispanic consumers and the ensuing impact on Constellation’s brands.
