Modelo cans have become part of the fabric of events for Rio Riojas’ family and community in Lansing, Michigan.

The 35-year-old often finds himself opting for the brand at grocery stores or bars. The beer has become, in his words, “synonymous” with gatherings, ranging from small hangouts to birthday parties.

“It’s definitely the choice of the people,” said Riojas, a stand-up comedian. “When you’re at a quinceañera and you see everybody you know enjoying a couple beers at the table, it’s usually going to be a Modelo.” 

Riojas is part of a base of Hispanic consumers that has become a focal point for Constellation Brands’ beer business, which also includes products such as Corona and Pacífico. What the company describes as an authentic relationship with this cohort of shoppers has boosted demand — and is part of why Modelo has become the best-selling beer brand in the U.S.

Recent data illustrates how Constellation has pulled ahead in the broader market by homing in on Latinos.

Hispanic- and Latino-identifying customers accounted for 32.5% of Constellation Brands’ sales in 2023, according to data from consumer research firm Numerator and investment bank Jefferies. This is despite the group comprising just 19.5% of the American population that year, as government statistics show.

Continued loyalty from these shoppers is partly responsible for Modelo hanging onto its spot as the most-bought U.S. beer by dollar share, the company said. Modelo was first able to eclipse Bud Light last year as the Anheuser-Busch-owned brand faced backlash following its marketing campaign that featured a transgender influencer.

“Hispanic consumers are the single most important consumer group for our beer business,” said Mallika Monteiro, executive vice president and managing director for Constellation’s beer brands. “It has been the foundation of how we’ve been able to drive growth over the last 14 years.”

Constellation’s connection to these brands started with importing them to the U.S. from Mexico. The company officially acquired the U.S. beer business of Groupo Modelo, which included Modelo and Corona, from Anheuser-Busch in 2013.

These brands have a natural pull among Hispanics given their roots in America’s southern neighbor, said Alexandra Aguirre-Rodriguez, an associate professor at Florida International University’s business school. But Constellation’s marketing and social responsibility efforts have helped the New York-based company maintain this relationship over time, she said.

Constellation’s Monteiro said the emphasis on the Hispanic community has taken root in the company’s focus on building a diverse workforce. The company also touts a multiyear donor relationship with UnidosUS, which is billed as the largest civil rights organization focused on Hispanics in America.

With the rights to market in the U.S., Monteiro said Constellation has focused on an “authentic” reflection of these brands as Mexican imports. After several years of advertising in Spanish-language programming, she said the company in more recent years brought its Modelo marketing campaigns to English-speaking media.

One popular spot focused on the role of “abuelas,” or grandmothers, in caring for and feeding their families. An ad released this year highlighted the work of California women who build low-rider cars.

Modelo’s “fighting spirit” tagline offers positive representation in media for Hispanics specifically, said FIU’s Aguirre-Rodriguez, whose research centers on the intersection of identity and branding. It can also resonate more broadly with immigrants coming to America in search of a better life, or their descendants — regardless of their origin country, she said.

“Time and time again, you see that there’s that strong bond that consumers form emotionally with brands,” Aguirre-Rodriguez said. “The self is a very important part of consumers’ decision-making.”

This connection can help Constellation weather a tough economic backdrop that’s been defined by a “choosy” consumer, according to Jefferies analyst Kaumil Gajrawala.

Gajrawala said one might expect Constellation to face trouble as consumers face economic challenges such as inflation and high interest rates. But he said the company is in a better spot than others in a similar position.

That’s because the Hispanic base is likely to reduce spending elsewhere in order to keep picking up boxes of Modelo or Corona, given their loyalty, he said.

“The business is more resilient than it may appear,” he told clients in June.

Constellation hasn’t been completely immune from economic headwinds. CEO William Newlands said on the company’s earnings call earlier this month that an uptick in Hispanic unemployment can help explain softness seen during the second quarter.

Potential tariffs on imports are another overhang for the company heading into the presidential election. But Tom Fullerton, a professor at the University of Texas at El Paso focused on trade in the Americas, said consumers should continue to shell out under these circumstances, though they would likely see price increases as a result.

Constellation is one of multiple companies vying for the attention of Hispanics as their financial power becomes more apparent. A study released last month found that if U.S. Latinos were an independent country, they would have the fifth-largest gross domestic product and the second-fastest-growing economy.

Looking ahead, Constellation is expecting a rebound in Hispanic employment that should bode well for spending. On the business end, Monteiro said the company is expanding into flavors that particularly resonate with this group, such as the Modelo Agua Fresca line she said is inspired by drinks at Mexican street markets.

At a recent gathering of Riojas’ family, a decked-out tray included cans of Modelo adorned with finger foods and shrimp. Attendees could use those items to make a “Michelada,” a cocktail that typically mixes the Mexican beer with juice and toppings.

For Riojas, a box of Modelo has also become a staple gift when going to events. He said the company’s commitment to uplifting Hispanic heritage has struck a chord within his community. 

“It was awesome to see us represented,” he said. “It’s definitely a good mark of the culture and a good representation of our ‘fighting spirit.'”

Modelo and Corona brewer Constellation Brands is a tale of two businesses. One of them — beer — is stealing market share left and right. The other — wine and spirits — is an anchor on the stock. Nothing in the company’s fiscal 2025 second-quarter results on Thursday changed that narrative. But the next two quarters might.

With a potential strike at ports up and down the East Coast and along the Gulf Coast set to begin after midnight Monday, logistics executives tell CNBC the remaining hours are critical in moving out as much trade as possible before a shutdown that will do serious damage to the functioning of the U.S. economy.

Based on data from ImportGenius, which tracks the bills of lading — the digital receipts of cargo containers — a total of 54,456 twenty-foot equivalent units (TEUs) arrived on Friday at the 14 ports operating under the master contract between the International Longshoremen’s Association and the U.S. Maritime Alliance (USMX) which expires at midnight Monday. The approximate value of that freight was upward of $2.7 billion, based on an MDS Transmodal estimate of $50,000 per container. For the weekdays between Sept. 23-27, a total of 273,417 TEUs were imputed through customs at these ports with a value of approximately $13.67 billion.

Alan Baer, CEO of OL USA, said the enormity of the freight volumes arriving Friday alone shows the scramble logistics companies are in to get the containers off the dock by close of business Monday. “Importers, in coordination with their logistic partners, should try to clear as many of their containers off open terminals where possible to avoid possible delays in acquiring their inventory,” said Baer.

On average, it takes one week to clear out one day of a port closure. As much as 43% to 49% of total containerized goods entering the U.S are processed through ports on the East Coast and Gulf Coast. 

Michael Kanko, CEO of ImportGenius, tells CNBC the economic importance of the ports impacted by an ILA strike is profound. “As our data shows, a strike of even a week will block the flow of hundreds of thousands of containers into the U.S.,” he said. “These ports are also a major gateway into the U.S. for refrigerated produce. Time isn’t on the side of importers.”  

“Every importer, exporter, and even domestic shippers should be watching developments very closely this week because the impacts of a port strike on the U.S. East Coast and Gulf Coast ports could potentially impact all modes if there is a strike, and if it lasts longer than a few days,” said Brian Bourke, global chief commercial officer of Seko Logistics.

The ILA is North America’s largest longshoremen’s union. The union said in a statement sent to the press on Monday morning that USMX “continues to block the path toward a settlement on a new Master Contract by refusing ILA’s demands for a fair and decent contract and seems intent on causing a strike at all ports from Maine to Texas beginning in almost 12 hours.”

“The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject,” the ILA said. 

The ILA has said its 85,000 members, “joined in solidarity by tens of thousands of dockworkers and maritime workers around the world,” will hit the picket lines at 12:01 a.m. on Tuesday, Oct. 1, and strike at all Atlantic and Gulf coast ports from Maine to Texas.

Approximately 50,000 ILA union members work at the ports of Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Virginia, Charleston, South Carolina, Savannah, Georgia, Jacksonville, Florida, Tampa, Florida, Miami, New Orleans, Mobile, Alabama, and Houston.

No negotiations were underway and none were planned before the Monday deadline, according to a Reuters report.

In recent days, top Biden administration officials including Transportation Secretary Pete Buttigieg, acting Labor Secretary Julie Su and Director of the National Economic Council Lael Brainard spoke separately with USMX and ILA representatives urging the parties to come to a fair agreement quickly. The Biden administration has stated on several recent occasions that it will not use federal powers to force dock workers to remain on the job. “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” White House officials have said.

The Taft-Hartley Act, passed in 1947, was a revision of U.S. law governing labor relations and union activity that granted a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or safety” are at risk.

The union suspended talks with the USMX in June over issues including use of automation at ports and wages, and the ports ownership group has said in recent weeks that the ILA continues to “strongly signal” that it has already made the decision to strike.

A ports strike could threaten the recent gains made in bringing down inflation and the prices paid by consumers across a wide range of goods, and could give former President Donald Trump another talking point over the key voter issue of the economy in the final month of campaigning.

Based on prior port strikes, ocean carriers normally profit from soaring freight rates based on demand for other ports as well as detention and demurrage fees on containers stranded during a ports shutdown. Analysts have been warning ocean spot rates could increase by 20%-50%. UBS forecast that 20% of Maersk’s total volume would touch a U.S. port that would be impacted by the strike. Maersk is on the board of USMX. UBS estimated that if freight rates increased 30% over two quarters, a revenue tail wind of more than $1 billion would be generated.

Meanwhile, union support is a critical issue for the Democrats, and President Joe Biden recently emphasized to reporters he “did not like” Taft-Hartley.  

Business trade groups across sectors of the economy have urged the Biden administration to step in.

The U.S. Chamber of Commerce released a poll on Monday morning showing that a majority of both registered voters (58%) and the general population (54%) support the Biden administration intervening and ordering the union to work and negotiate through the use of Taft-Hartley. Roughly 20% of respondents said they were opposed to federal intervention.

On Monday, the U.S. Chamber officially called on President Biden to invoke the Taft-Hartley Act.

In a recent video featuring ILA President Harold Daggett played for rank-and-file union members, who voted unanimously to authorize a strike, he threatened an intentional worker slowdown in moving containers if the Biden administration forces the union workers back to the docks using the Taft-Hartley Act. “You’re better off sitting down and let’s get a contract and let’s move on with this,” he said.

U.S. Customs data showed a wide variety of products still arriving at the Port of New York/New Jersey, the largest port on the East Coast, on Friday — containers holding cosmetics and perfume from Estee Lauder and L’Oreal, auto parts and tires, and electrical materials and circuit breakers from automation and electrical leader ABB.

Hundreds of containers came in over the past week for retailers from Walmart to Walgreens, filled with winter clothes, food, electronics, towels and holiday items, from Disney Halloween pieces to Christmas string lights.

Walmart is the largest importer across all of the threatened ports, according to ImportGenius data.

A spokesman for the Port Authority of New York/New Jersey said it is closely monitoring developments. The port began preparations for a strike two weeks ago.

“We are coordinating with partners across the supply chain to prepare for any potential impacts,” the spokesman said. “For the over 600,000 regional jobs our port supports and the $240 billion in goods moved through here each year, we urge both sides to find common ground and keep the cargo flowing for the good of the national economy.”

Depending on the length of a strike, the toll on the U.S. economy could reach into the tens of billions of dollars. A one-week strike could cost the U.S. economy $3.78 billion, according to an analysis by The Conference Board, and cause supply chain slowdowns through mid-November. In all, the ports threatened with strikes handle $3 trillion annually in U.S. annual international trade.

“There’s no easy Plan B. While shippers have already begun diverting some cargo to the West Coast, capacity for such alternative options are limited,” said Erin McLaughlin, senior economist at The Conference Board, in its report.

For the Port of New York/New Jersey, the economic impact could run as high as $641 million per day; while in Virginia, an economic impact of $600 million per day is possible, according to an analysis from Mitre.

East Coast ports in the U.S. are forecast to handle 2.3 million TEUs in October. That translates to 74,000 shipping containers per day, and a value of daily freight upward of $3.7 billion.

Steve Lamar, president of American Apparel & Footwear Association, recently told CNBC that a disruption to the East and Gulf coast ports would have major impacts on the cost and availability of apparel, footwear and travel goods, as more than half of all apparel, footwear and accessories move through these ports.

German footwear giant Birkenstock had more than 32,000 packages and cargo imported and processed at the Port of Virginia in Norfolk between Sept. 23 and 27.

Amazon.com Services, a subsidiary of Amazon.com that provides e-commerce services for third-party sellers, had more than 26,000 mini smart cameras and other products arrive and clear customs between Sept. 23 and 25.

Ace Hardware had more than 64,000 items in 57 containers processed through customs between Sept. 23 and 26.

Anheuser-Busch InBev was also among major importers with product cleared through customs in recent days.

Paul Brashier, vice president of global supply chain for ITS Logistics, said conversations with clients on freight pickup strategy have been taking place over the past two weeks.

“If shippers waited until Monday to bring on additional trucks to pick up their freight, I feel it may be too late to get available containers out of the terminals so they can avoid excessive demurrage charges during the strike,” Brashier said. “Shippers should not be lulled into a false sense of security during the strike, as just like during Covid, the breakdown in the supply chain did not occur until after operations resumed after shut down,” he said.

In a recent advisory to clients, the Georgia Ports Authority recommended import delivery “well before October 1 to minimize any disruptions.”

In addition to apparel, the Port of Savannah saw on Friday thousands of LED panels, Keurig Coffee brewers and wine for Constellation Brands. In the Port of Houston, Tempur-Pedic mattresses and products for Home Depot and Ikea were identified as arriving Friday.