MW Corona's parent is looking for more beer drinkers. Why Budweiser could be the buzzkill.

By Bill Peters

TD Cowen analysts see more potential competition between Constellation and Budweiser maker AB InBev in areas where both are trying to grow

This year, Constellation Brands Inc., the company that sells Modelo and Corona in the U.S., has seen its beer business suffer, as ICE raids and inflation kept its massive segment of Hispanic consumers from going out.

But as Constellation (STZ) tries to make up for lost business, an analyst on Tuesday said one of its main paths to do so faces a major obstacle: A resurgent Anheuser-Busch InBev.

That analyst, TD Cowen's Robert Moskow, said Constellation could sell more beer in more parts of the country - something it's already trying to do. The only problem, he said, was that AB InBev $(BUD)$, the parent of Budweiser and Bud Light, was essentially trying to do the same thing.

"Our analysis indicates that Constellation has a path to offset economic pressure on its base of Hispanic consumers by continuing to expand beer distribution (especially in lower Hispanic-index markets) and extending into more pack sizes and price points," Moskow said in a research note on Tuesday.

"However, with market leader [AB InBev]'s investments in the U.S. market gaining traction, we foresee a tougher fight for shelf space ahead," he continued.

Hispanic consumers make up around half of Constellation's beer business. Amid President Donald Trump's sweeping deportation efforts, advocacy groups have accused the U.S. government and the agents carrying out arrests of racial profiling, particularly in southern California, where protests over the raids took place in Los Angeles and elsewhere. The government has denied those allegations, telling NPR, in a story last month, that "officers do their due diligence."

During Constellation's investor day in 2023, the company said it wanted to make its beer available in 500,000 new distribution points for its main brands over five years. In January this year, management said it had "secured more than half" of those locations. Moskow, in Tuesday's note, said much of that growth, so far, appeared to come from the Midwest, helped in no small part by Modelo Especial.

He said that in the next phase of that distribution expansion would likely rely more on Pacifico, and that the company would likely try to sell more beer where the Hispanic population is lower.

"Geographically, we expect most of the gains to come from the general market in the Midwest, Southeast, and South where the Hispanic population index is lower," Moskow said. "In addition, we expect them to introduce a wider array of pack sizes to help distributors expand Modelo's retail footprint."

He noted, however, that after the 2023 Bud Light boycott, Anheuser-Busch InBev has staged something of a rebound this year, following investments in marketing and faster-growing beers. Its market share has ticked higher, with big gains in parts of the Midwest and South - the same areas where Constellation would need to grow.

"If ABI's success in these markets continues, Constellation may need to capture shelf space from different competitors (e.g., Molson Coors) or states (e.g., Florida and Illinois) to reach its targets," Moskow said.

Analysts have said that beer demand has suffered as some younger and more health-conscious consumers stay away from alcohol. Molson Coors Beverage Co. $(TAP.UK)$ on Tuesday cut its full-year earnings outlook, as consumer caution endures and Trump's aluminum tariffs threaten to drive up the cost for beer sold in cans.

However, shares of Molson were up nearly 1.8% on Tuesday, as Chief Executive Gavin Hattersley suggested the current industry malaise wouldn't last.

"Drinking-age consumers continue to engage with beer at similar levels across all generations, and compared to historical levels," Hattersley said. "It's the occasions that are left."

Shares of Constellation were up 1% on Tuesday. The stock is down 22.2% on the year.

-Bill Peters

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August 05, 2025 14:30 ET (18:30 GMT)

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