In the U.S., Hispanic consumers have shown loyalty to Modelo and Corona maker Constellation Brands through their choice of beverages.

• In 2023, data from Numerator and Jefferies reveals that 32.5% of Constellation Brands' sales came from consumers who identified as Hispanic or Latino.
• The continued loyalty of these shoppers is a significant factor in Modelo maintaining its position as the leading U.S. beer brand by revenue share.
• According to Mallika Monteiro, executive vice president at Constellation Brands, Hispanic consumers are the most crucial consumer group for their beer business.

Lansing, Michigan's Rio Riojas family and community have embraced Modelo cans as a staple of their events.

The 35-year-old frequently chooses the brand at grocery stores or bars, describing it as "synonymous" with gatherings of all sizes.

"A quinceañera is typically a time when people enjoy Modelo beers, according to comedian Riojas."

Modelo's success as the best-selling beer brand in the U.S. can be attributed to its authentic relationship with a base of Hispanic consumers that includes Riojas, Corona, and Pacífico.

By focusing on the Latino market, Constellation has gained a competitive edge in the broader market, according to recent data.

In 2023, 32.5% of Constellation Brands' sales came from customers who identified as Hispanic or Latino, even though this group made up only 19.5% of the American population that year, according to data from Numerator and Jefferies.

The continued loyalty of these shoppers has helped Modelo maintain its position as the most popular U.S. beer by dollar share, despite facing criticism over its marketing campaign featuring a transgender influencer.

""Our beer business has grown significantly over the past 14 years due to the importance of Hispanic consumers as our key customer group," stated Mallika Monteiro, executive vice president and managing director for Constellation's beer brands."

The 'fighting spirit'

The U.S. beer business of Groupo Modelo, which included Modelo and Corona, was officially acquired by Constellation in 2013, marking the start of the company's connection to these brands.

The relationship between Constellation and Hispanics is maintained over time due to the company's marketing and social responsibility efforts, said Alexandra Aguirre-Rodriguez, an associate professor at Florida International University's business school.

The focus on building a diverse workforce has led to the emphasis on the Hispanic community at Constellation, as evidenced by the company's multiyear donor relationship with UnidosUS, the largest civil rights organization for Hispanics in the US.

Monteiro stated that with the right to market in the U.S., Constellation has concentrated on portraying these brands as authentic Mexican imports. For several years, the company advertised in Spanish-language programming. Recently, Monteiro revealed that Constellation shifted its Modelo marketing campaigns to English-speaking media.

An ad this year emphasized the contributions of California women who construct low-rider vehicles. Meanwhile, a well-liked location has been the focal point of "abuelas," or grandmothers, in caring for and nourishing their families.

FIU's Aguirre-Rodriguez stated that Modelo's "fighting spirit" tagline provides a positive representation in media for Hispanics specifically, and can also resonate more broadly with immigrants coming to America in search of a better life, or their descendants, regardless of their origin country.

"Aguirre-Rodriguez stated that consumers develop an emotional bond with brands and that the self plays a crucial role in their decision-making process."

'A good mark of the culture'

According to Jefferies analyst Kaumil Gajrawala, this connection can aid Constellation in navigating a challenging economic climate characterized by a discerning consumer.

Gajrawala stated that although consumers may encounter economic difficulties such as inflation and high interest rates, which could potentially cause trouble for Constellation, the company is in a more advantageous position compared to others in a similar situation.

Given their loyalty, the Hispanic base is likely to reduce spending elsewhere in order to continue purchasing Modelo or Corona.

In June, he informed clients that the business was more resilient than it seemed.

During the second quarter, Constellation experienced softness due to an increase in Hispanic unemployment, as CEO William Newlands stated on the company's earnings call earlier this month.

The potential tariffs on imports are a concern for the company heading into the presidential election, but Tom Fullerton, a professor at the University of Texas at El Paso, advised consumers to continue to pay despite the price increases.

As their financial power grows, multiple companies are competing for the attention of Hispanics. A recent study revealed that if U.S. Latinos were an independent country, they would have the fifth-largest GDP and the second-fastest-growing economy.

In the future, Constellation anticipates a surge in Hispanic employment, which could positively impact spending. On the corporate level, Monteiro stated that the company is expanding into flavors that appeal to this demographic, such as the Modelo Agua Fresca line, which is inspired by drinks sold at Mexican street markets.

During a recent family gathering, a tray filled with Modelo cans and finger foods was presented. The attendees could use these items to create a Michelada, a traditional Mexican cocktail made by mixing the beer with juice and toppings.

When attending events, a box of Modelo is now a common gift for Riojas. He stated that the company's dedication to celebrating Hispanic heritage resonated with his community.

"It was great to see us represented," he said. "It's definitely a positive reflection of our culture and our 'fighting spirit.'"