The data point: Constellation Brands expects to take a $20 million hit this fiscal year due to the Trump administration’s aluminum tariffs, CFO Garth Hankinson said on the company’s earnings call.

• The tariffs didn’t affect FYQ1 results but will shave roughly 20 basis points off margins going forward.
• That’s a significant expense for the company’s beer portfolio, which includes Modelo, Corona, and Pacifico, and it comes at a challenging time. Beer demand is weakening: Constellation’s beer sales fell 2% YoY this quarter.

Behavioral shifts: Constellation has also flagged shifting consumer behavior among a key demographic.

• Last quarter, CEO Bill Newlands said Hispanic consumers—who account for about half of its beer sales—were pulling back on discretionary spending due to concerns over the Trump administration’s immigration policy. This quarter, the company cited inflation-related pressures, with both Hispanic and non-Hispanic consumers dining out less and hosting fewer social gatherings at home.
• Still, Newlands added that while overall beer spending has dipped, beer’s share of the overall grocery basket has remained steady. That suggests while consumers are spending more cautiously, they haven’t lost their taste for beer.

Our take: Constellation Brands is one of the few companies openly acknowledging the real-time impact of the administration’s policies. With both hardline deportation rhetoric and tariffs hitting at once, the company faces a dual challenge that could weigh heavily on its performance throughout the year.

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