Corona Extra’s year of reckoning

USA | You would have thought that Corona Extra, the number one imported beer brand, with a near 5 percent share of the market, can do no wrong. But in 2018, after more than a decade of growth, the brand swung into decline.

However, the Corona family of brands grew 7.5 percent in 2018, it was reported, thanks to the launch of two line extensions: Corona Premier, a lower-calorie light lager; and Corona Familiar. Another Constellation Mexican import, Modelo, also posted a big year, with sales up 12.1 percent.

Undauntedly, Constellation Brands, which brews Corona in Mexico for import into the US, will roll out another Corona variant, Corona Refrescas, nationally this year.

There are so many Coronas out in the market these days that consumers can be forgiven for getting confused. With all the new lines screaming for their attention, punters perhaps unwittingly contribute to cannibalising Corona Extra’s sales.

Constellation’s executives have said that they are happy with the performance of the Corona umbrella brand, but analysts are beginning to worry about the health of the flagship brand. Could it be suffering from an affliction known as “core brand dilution”?

Beer Marketer’s Insights, a trade publication, recently raised the question, if Corona Extra and Corona Light’s declines in 2018 will continue into 2019 due to further cannibalisation from within?

Robert Ottenstein, an analyst with Evercore ISI, was quoted as saying: “Why shouldn’t we be concerned about trends for Corona Extra, which represents (about) 40 percent of [Constellation’s] beer volumes?” He also wondered whether rising sales of Corona Premier and Corona Familiar are starting to cannibalize Extra at a rate higher than the company would like?

Constellation has said that it will continue to invest behind Corona Premier and Corona Familiar in 2019, while also hiking its marketing support for Corona Extra and Corona Light.