Constellation Brands Serves Up Lukewarm Beer Sales

Americans aren’t cracking open enough cold ones for Constellation Brands. The Corona parent reported this week that its net sales slid 6% in the spring quarter as shoppers bypassed the alcohol aisle.

In recent years, Constellation’s beer portfolio — which includes America’s No. 1 brew, Modelo Especial — has made up for plunging sales in its wine and spirits segment. But not this time: Beer sales, which account for 80% of Constellation’s revenue, fell 2%. 

Big Booze is busy sussing out why Americans are cutting back. 

Priced Out of Drinking

Constellation CEO Bill Newlands blamed, in very CEO terms, “non-structural socioeconomic factors” for the company’s not-so-frothy sales. A survey from the company found that people are tightening their beverage budgets, hosting fewer social gatherings, and to paraphrase, simply aren’t party-rocking like they used to. 

However, Newlands said shoppers’ spending on beer relative to their total grocery bills hasn’t fallen, meaning Americans could be simply spending less overall — but are still interested in imbibing. A recent survey from market research firm IWSR may back that assumption up:

• More 21+ Gen Zers are drinking, with 73% telling IWSR they’d had a drink in the past six months, up from 66% two years ago. That’s the biggest increase of any generation, and IWSR said it shows Gen Zers weren’t abstaining by choice but because they weren’t making enough money; as they get older and earn more, they’ll spend more on booze.
• The sober-curious trend is often associated with health consciousness, but IWSR’s survey suggests it may be more about cost. That would be big for the booze industry, as it would indicate a trend tied to current events rather than a long-term societal shift. For now, global alcohol sales remain down, falling 2% in 2024. 

Cerveza Struggles: Constellation, which specializes in Mexican brews, is also coping with canned-beer tariffs that started in April, as well as higher aluminum duties. And last quarter, Constellation reported that beer sales had declined the most in areas with large Hispanic populations. Hispanic consumers make up about half of Constellation’s beer sales, the company said. Still, Constellation expects to make a modest comeback this year. The company maintained its full-year guidance this week, predicting sales will range between a 2% decline and a 1% increase from last year.