Constellation Brands’ recent volume woes are only temporary, beer division president and EVP Jim Sabia assured distributors this week during the National Beer Wholesalers Association’s (NBWA) Annual Convention in Las Vegas.
Sabia sat down for a fireside chat with outgoing NBWA chair Rebecca Maisel to discuss the company’s Mexican import beer brands (Modelo, Corona, Pacifico and Victoria) and how Constellation is switching up its playbook to address recent headwinds.
“Usually in our fiscal year, we don’t do very much,” Sabia said. “We execute the plan and we get ready for the next fiscal.
“Well this year, unfortunately, what’s happening in market with our depletions, we had to change playbooks. We’re doing a lot of things that we probably wouldn’t have done in previous years.”
The decision comes after two consecutive quarters of depletions (sales to retailers) declines, which broke a 59-quarter growth streak. In the company’s latest quarter (Q2 fiscal year 2026), shipments (sales to wholesalers) declined 8.7% year-over-year (YoY), while depletions were down 2.7%.
Year-to-date (YTD) through September 6, Constellation’s off-premise dollar sales are flat, while volume is down 1.7% in NIQ-tracked off-premise channels, according to data shared by 3 Tier Beverages. However, the company has recorded the largest total beer dollar sales (+0.6 points) and volume (+0.5 points) growth among all beer vendors YTD.
Joining Constellation’s book of new tricks will be “price pack architecture packages” across its beer brands.
“You’re going to see a lot more from us in terms of more SKUs, more packages,” Sabia said. “We’re not going to go crazy, we’re not going to throw stuff against the wall.”
Constellation historically prided itself in having about 150 SKUs, averaging $50 million in net sales per SKU. However, the company has realized it has “to evolve,” Sabia said.
The company also recently repositioned Corona Premier and Modelo Oro, realizing the premium price point of the better-for-you positioned products created too large of a “barrier” for consumers. The brands were 55% more expensive than competitor brands such as Anheuser-Busch InBev’s (A-B) Bud Light and Molson Coors’ Miller Lite and Coors Light, and well above 63% of total beer sold, Sabia said.
After feedback from distributors that the brands were “priced pretty high,” Constellation restructured. Now, the beers are still considered “high end,” but now with a more competitive price.
Sabia encouraged distributor partners to continue to share feedback and “local knowledge.” The company’s network is made up of about 450 distributors, with the majority Molson Coors houses (70%), compared to A-B (20%) and others (10%).
“You all know your market and your consumer and what’s going on better than we do,” he said. “Your local knowledge is so, so important … more importantly now [and] going forward.”
Sabia also addressed the economic health of Hispanic consumers, which remain “very very critical” for not just Constellation, but all beer.
“They love beer, that’s their beverage of choice,” Sabia said.
Hispanic consumers make up between 35% and 40% of Constellation’s total consumer base, and account for roughly 50% of the drinker base of its largest brand family, Modelo. The biggest threat to that consumer base and their purchasing habits is the state of the economy, Sabia said.
“It’s going to turn,” he added. “They love all of our beers, they drink a lot of our beers, and we need that consumer to come back.”
Sabia declined to address Immigration and Customs Enforcement (ICE) raids, but said 86% of Hispanics are legal U.S. residents.
Sabia noted that the state of the consumer is more of a “cyclical” change than “structural,” and not the first time Constellation has tackled major consumer headwinds – harkening back to the start of the COVID-19 pandemic, when it was referred to as “Coronavirus” and “38% of Americans thought you could get COVID [by] drinking Corona.”
“If we can get through that, we can get through a lot,” Sabia said.
“We will get out of this. I truly believe this.”