Beer demand is brewing — and its boosting sales for booze giant Constellation Brands.
The Modelo maker reported first quarter earnings earlier this week that beat Wall Street’s expectations, largely due its beer business which lifted sales even as demand for its wine and spirits fell flat.
The beverage giant continues to see significant demand for beer brands, including Modelo Especial and Pacifico, its chief executive officer William A. Newlands, told investors during the company’s earnings call in July.
“Our Beer business continues to achieve strong volume growth, well above that of its category and total beverage alcohol,” Newlands said.
Depletions for Modelo Especial grew by almost 11% during the quarter. The Mexican lager extended its title as the leading beer brand sold nationwide since it earned the crown in 2023 after overtaking Bud Light.
Modelo Especial is continuing to cement its “household” namesake, Newlands later said. Meanwhile, its Pacifico beer brand reached 20% of depletion growth. Depletion refers to products sold to consumers at the retail level.
“The brand loyalty that exists with our consumers is second to none,” Newlands said in response as to whether there has been higher beer demand from low, middle or high-end consumers.
Looking ahead, Constellation Brands said it expects sales for its beer business to grow between 7% and 9%. That’s despite the foam beverage being pricer.
Meanwhile, for its wine and spirits division, the booze producer said it expects to continue to face “challenging dynamics,” particularly across most of its wine segments.
Nonetheless, its beer division is prompting the booze producer to make growth plans. The company said it plans to open a new brewery that will be operational towards the end of the next fiscal year or in the earlier part of fiscal 2027.