Corona virus and the potential fallout on Corona beer

USA | It is probably bad taste and also highly dangerous to even think aloud how the corona virus will impact the other Corona. But still, will people, in years to come, think of sun, sand and beaches when picking up a Corona, or of that deadly virus that has afflicted the globe?

Since the 1980s, when Corona beer first made a splash in the US, it has been projecting an image of “fun, sun and beach”. Unlike branding for other beers, which merely invited drinkers to unwind, Corona offered an escape, says the Economist newspaper in a post on 5 May 2020.

And true, its global appeal has been amazing. Until 2019, Corona ranked as one of the most valuable beer brands world-wide.  

Blame it on the pandemic, that as of this year the word “corona” has ceased to be the exclusive property of marketers at AB-InBev (for Mexico and the rest of the world) and Constellation Brands (which sells the beer in the US). Both firms will secretly worry if the associations with carefree living will outlive the onslaught of images of hospital beds and body bags.

What’s in a brand?

Using or buying a brand doesn’t just solve a function problem for the consumer – like thirst or hunger. It usually triggers a range of associative memories, emotions and phantasies, which fall under the heading “hedonistic consumption”.  

Experts in marketing psychology are sceptical that the two sets of associations can be kept separate, says The Economist. The term “corona” will probably become less repellent with time. It may help too that Corona beer is drunk mostly by the young, many of whom regard the pandemic as a nuisance rather than a trauma.

The first indication that Corona beer was triggering non-hedonistic associations came in February, when internet searches for corona+beer+virus exploded. Initially, it was easy to shrug them off (as I did) by saying that some consumers are just plain stupid.

Nevertheless, Constellation’s social media team for @coronaextrausa stopped tweeting on 28 February, and only took it up again on 9 April, when it announced a USD 1 million donation to the Restaurant Employee Relief fund. Its next tweet for the Cinco de Mayo celebrations (5 May is a major public holiday in Mexico) featured a benefit concert for restaurant employees which was live streamed.

In order to reassure shareholders, Constellation’s CEO Bill Newlands, on 3 April, told CNBC that Corona’s sales were “superb” in March, although some of that must have been stockpiling ahead of the lockdown.

More reasons to worry

But Corona’s woes this year go beyond its name. On 21and 22 March, residents voted against the completion of Constellation’s brewery in Mexicali, a city on Mexico’s border with California. Opponents said the brewery would use too much water in a draught-ridden area. Constellation had already spent USD 900 million on the USD 1.4 billion project, and is now unsure where, or whether, to build a replacement.

Worse was to come for Corona in early April, when the Mexican government put all non-essential businesses under lockdown, which meant that AB-InBev, Heineken and Constellation had to stop beer production. Within weeks the domestic supply of Corona dried up. AB-InBev was more fortunate than Constellation. It could shift some of Corona’s exports volumes to be produced in China, the UK, Belgium, Brazil and Colombia instead.

So what is Corona to do about its biggest headache – the association with the scary images? For the time being, AB-InBev and Constellation are keeping shtoom.

Rebrand Corona to Coronita?

Would they be willing to change the brand’s name, The Economist wonders? Tinkering with a multi-billion dollar brand could be dangerous and should not be undertaken lightly. “It would not only undo decades of hard work, but also destroy the beer’s sense of authenticity and history, which customers also prize”, the magazine argues.  

“But if damage to the brand is unavoidable, its owners could do worse than pick Coronita, the beer’s name in Spain.” There, Corona is branded Coronita because Spanish winemaker Bodegas Torres has owned the trademark for “Coronas” since 1907. Outlandish as it may seem at this stage, a rebrand could “preserve the brand’s identity, and it might just be enough of a change to get drinkers’ imaginations back on the beach, where they belong,” The Economist concludes.

 As always, we shall see.