Our business depends upon consumers’ consumption of our products, and sales of our beer brands in the U.S. represent the vast majority of our business. Consumer preferences, behaviors, perception, and sentiment may shift due to a variety of factors, including changes in taste preferences and leisure, dining, and beverage purchasing and consumption patterns, U.S. demographic trends, changing market dynamics, including consumer-led premiumization, moderation, and betterment trends, pricing, perceived value, branding, marketing, and reputational considerations, geopolitical events and tensions, trends involving environmental sustainability and CSR matters, and other negative trends impacting our products, business, and the entire beverage alcohol industry, such as elevated product supply or inventory levels. Further, a limited or general decline in consumption in one or more of our product categories has occurred before and could occur again in the future due to a variety of factors, including:
- reduced consumer discretionary income, subdued overall consumer spending, and value-seeking behavior among consumers as well as elevated unemployment;
- new or increased tariffs, import and excise duties, or other taxes on or impacting beverage alcohol products, including raw and packaging materials;
- uncertainty, instability, or a general decline in economic or geopolitical conditions;
- impacts from inflation, including reduced consumer spending and increased costs, such as for commodities;
- consumer spending shifts, including to other consumer discretionary sectors, such as online gambling;
- concern about the health consequences of consuming beverage alcohol products, including moderation and betterment trends and the impacts of alcohol-related health warning recommendations, such as cancer risk warnings, and about drinking and driving or other safety considerations;
- reduced consumption of beverage alcohol products, including as a result of consumers participating in fewer social occasions, stricter laws, such as those relating to consumption or driving while under the influence of alcohol, or consumer dietary preference changes, weight loss regimens and pharmaceuticals, including GLP-1 drugs, or consumers substituting legalized cannabis or hemp-derived or other similar products in lieu of beverage alcohol;
- activity from governmental entities, anti-alcohol groups, or other bodies, such as the World Health Organization, advocating measures or guidelines designed to reduce or eliminate the consumption of beverage alcohol products or require more stringent labeling or warning requirements;
- restrictions on beverage alcohol advertising and marketing;
- increased regulation restricting the purchase or consumption of beverage alcohol products;
- changes in immigration laws, regulations, policies, and enforcement impacting consumers, particularly Hispanic consumers;
- the ability of our wine and spirits business to achieve long-term growth, including through portfolio repositioning, operational efficiency initiatives, and expansion of brands by leveraging global, omni-channel capabilities as well as ongoing wine and spirits category headwinds; or
- wars or military conflicts, including the conflict in the Middle East, disease outbreaks or pandemics, quarantines, severe weather events, and natural or man-made disasters, including wildfires, droughts, floods, extreme heat, and/or late frosts.