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Dead Brand Walking?: The Epic Branding Dilemma of Corona Beer

History tells us that this leading beer brand will face an existential branding crisis in the face of the coronavirus pandemic that could be fatal. How can the brand be saved?

By David WyldPublished 4 years ago 12 min read
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Photo by Glen Carrie on Unsplash

“Coronavirus fear has gripped the United States. Unfortunately for one of America’s favorite beers, that fear has extended to its brand even though the illness has nothing to do with the adult beverage.”

---- Graeme Bruce, YouGov Brand Analyst, February 2020

Introduction

You know when you’re halfway through the movie and it becomes obvious who the killer is. You know when you’re watching a sporting event (yeah, that will happen again) and you know with 99% certainty who is going to win. You know when you should have gone to the doctor for that “thing” because you know what it is, but you just didn’t want to really admit it and/or deal with the consequences of hearing the news.

Well, the very same things happen each and everyday in the world of business. The vast majority of the time, these “Captain Obvious” moments deal with small matters. However, every once and awhile, big things do happen. And while many corporate executives might never admit to being wrong (i.e. see Trump, Donald), in retrospect, the unforeseeable could be seen and therefore should have been talked about, though about, and maybe even planned for.

And so imagine what was happening early in 2020 in the corporate offices of the folks in charge of marketing Corona Beer. From all outside indications, the brand was riding pretty high at the time. They had high name recognition, a loyal and growing customer base, the marketing power of the beverage and spirits colossus - Constellation Brands - behind them, and oh yes, they had a winning ad campaign featuring former NFL quarterback turned star NFL analyst Tony Romo.

Corona - the brand - had become “cool” - being featured on everything from t-shirts and clothing, koozies, coolers, barware, etc…. Basically anything one could want!

Source: https://www.coronausastore.com/Browse/accessories

For a brand that used a slogan "Fresh limes, good times," life was good...and likely the bonuses and “thatta boys” back slaps and high fives (back in the “good old days” when touching was socially acceptable...) were most assuredly flowing like the beer!

Source: https://www.coronausa.com/

In fact, according to USA Today’s most recent rankings of beer brands (from 2019), Corona Extra (commonly referred to as simply “Corona”) was the top imported beer in the U.S., and it had a 4.2% share of all beer sold in America.This made Corona the 6th best-selling beer in America! The brand was selling the equivalent of over 8.5 million barrels annually, and it ranked sixth of all the many - and as we know, ever-growing lists of beer brands sold in the United States! And while most of the “stalwart” domestic brands have been trending downward in sales, Corona was trending upward. Additionally, it’s newer Corona Light brand was ranked 24th in sales in the U.S. - and growing! And branching out from beer, Corona Hard Seltzer was - purely coincidentally - just launched to initial strong sales in early March (yes, the same month when that "other corona" hit the U.S. in a big way)!

Table 1 - U.S. Beer Brand Rankings and Market Share - 2019

1. Bud Light (14.3%) - 5 Year Sales Trend: -20.7%

2. Coors Light (7.2%) - 5 Year Sales Trend: -14.9%

3. Miller Lite (6.1%) - 5 Year Sales Trend: -7.9%

4. Budweiser (5.5%) - 5 Year Sales Trend: -25.2%

5. Michelob Ultra (4.3%) - 5 Year Sales Trend: 114.6%

6. Corona Extra (4.2%) - 5 Year Sales Trend: 20.8%

7. Modelo Especial (4.0%) - 5 Year Sales Trend: 121.4%

8. Natural Light (3.3%) - 5 Year Sales Trend: -11.8%

9. Busch Light (3.0%) - 5 Year Sales Trend: -3.9%

10, Busch (2.0%) - 5 Year Sales Trend: -21.6%

Source: USA Today, “What are the biggest beer brands in America?” June 2019, (https://www.usatoday.com/story/money/2019/06/19/beer-brands-americas-31-most-popular-beers/39490347/)

So, by any objective measure - the Corona brand and brand name was positioned well - and it would seem as if the beer’s sales trajectory was set on a course for continued growth, unless....

By CDC on Unsplash

Corona and the Coronavirus

Then, as we all know, it happened. The world was hit by the COVID-19/coronavirus pandemic. And yes, suddenly, a beer brand that was widely known and had been marketed well to become the most popular Mexican beer in the United States suddenly faced a branding crisis. When your brand is linked with the news of the day, it can cause a lift in sales. One can point to any number of examples in recent history, from athletes seen using your product to politicians mentioning your brand name. However, when your brand name is suddenly synonymous with a deadly disease that is not just in the news, but is the news - all of it - you have a nuclear-level brand crisis! And such has been the case for Corona beer - making this a real-time case study on how to react to a very real and even possibly existential branding crisis!

Even worse for the Corona folks is the way that the disease - and the threat posed by the virus - was talked about and written about, not just in traditional media, but even more so on social media. Suddenly, saying things like “You got Corona?” had nothing to do with beer, but something far more serious, even deadly!

And yes, the humorists among us - both the pros....

and many millions and millions out there on social media - started poking fun at the beer brand.

And so yes now, we have people using Corona beer as a “prop” - a symbol to show in their graduation pictures in 2020 what was going on at the time - a simple, visual cue as to why there would be no graduation ceremony possible in the time of the coronavirus pandemic!

Their brand was on fire - but not in a good way. Suddenly, Corona (the beer) was in a 5 alarm branding crisis thanks to corona (the virus).

By Nathan Dumlao on Unsplash

A Brief Pre-Corona History of Branding Confusion

Throughout the history of business, we have examples of companies whose product names can get “lost in translation” between languages and cultures. We have classic examples such as the Iranian Barf detergent, which in Farsi means “snow” - leading Adweek magazine to famously run a headline that once read “People Wash Their Clothing in Barf Every Day.” And yes, we can all laugh at products that fail in translation, including such very real items as: “Fart Bars,” “Pee Cola,” and “Wack Off Insect Repellent” (and yes, if you want to learn more about these products, see: “8 Disastrous Product Names”).

There are indeed other examples from marketing history - really not so long ago - where product names unfortunately became associated with other diseases (such as SARS Cola from Australia - yes, the same as that other coronavirus pandemic!) and yes, world events (such as when a startup maker of a payments app, ISIS - yes, same as THAT group - chose to rebrand as Softcard in 2014 when ISIS - the terrorist group - began dominating the news). It turned out to be a wise choice, as the company was acquired by Google a year later! Then ISIS CEO (the app company, not THAT group!) Michael Abbott explained the company’s sudden, forced rebranding decision in 2014, stating:

"We have no interest in sharing a name with a group whose name has become synonymous with violence and our hearts go out to those who are suffering. Changing a brand is never easy, but we know this is the right decision – for our company, our partners and our customers."

While the saying goes that there really is no such thing as bad publicity, I do think that there should be a pandemic exception! As a strategic management analyst and consultant, to me, the most direct historical parallel for the current situation being faced by the Corona beer executives any marketing precedent is that of Ayds candy. The diet supplement sold as a candy has a unique history, and it sold quite well from the 1940’s till the mid-1980’s, despite being labeled as one of “The 15 Grossest Diet Foods in History.” That success lasted until just about the time that the AIDS epidemic hit full force.

Ayds was, no doubt, an interesting product, sold as an "aid" for weight loss. It had both benzocaine (that numbed the user’s tongue and thus helped suppress the workings of taste buds) and phenylpropanolamine (a now FDA-banned decongestant that also suppressed appetite, but caused heart attacks and strokes). The company had a history of “run-ins” with the federal government over both its ingredients and its advertising, even garnering attention throughout its history with controversial commercials…

… and print ads (who could ever forget an ad with the headline “I got stuck in a church pew before I lost 70 pounds!”)

Source: https://www.newspapers.com/clip/23916916/ayds-candy-testimonial/

The Ayds story (and yes, it was pronounced just like the fatal disease that has an “I” instead of the “Y”) is one that comes up quite often when talking about branding and crisis management. In fact, it is often cited as one of the biggest marketing/business blunders of all time.

Despite the obvious branding confusion that could occur between AIDS and AYDS, the company stubbornly refused to admit the connection in people’s minds for the better part of a decade. In fact, in a Philadelphia Daily News article on the company’s branding predicament, aptly titled “Tale of a Marketing Dilemma: The Name Game Puts Makers of AYDS on Diet of Anxiety,” a company spokesperson was quoted in 1983 as saying.

“The only calls we have gotten on this thing have been from reporters. Frankly, I think the public is a lot more discerning than you guys. I think the distinctive spelling of our product in print and television has prevented any unsavory connection between the product and the disease.”

Eventually though, the company tried to rebrand their product as “Diet Ayds” - but not until 1988! In the end, the close association with the fatal disease was indelibly branded into consumers’ minds, and the product was withdrawn from the market shortly thereafter (and if you want to read more on the history of Ayds and AIDS, let me recommend Ransom Riggs’ “Giving Candy A Bad Name”).

By Derek Oyen on Unsplash

Analysis: Is Corona Beer the Next Ayds Candy?

So where is the Corona brand today, and what is its future? That is a very hard question to answer. According to the company, sales of its products are actually up for the first quarter of 2020 and its Corona brand remains its top-selling product. But of course, sales of all alcohol have jumped as stay-at-home efforts have been put in place across the country! However, as the COVID-19 outbreak in the U.S. only worsened, both social media postings from individuals shying away from the Corona brand and a controversial survey from New York-based 5W Public Relations (which among other things showed many Americans reluctance to drink a Corona beer in public) were met with a strong rebuke from Constellation Brands CEO Bill Newlands. So, while sales may be strong and Corona’s parent reports it has 70 days of inventory for the beer brand, the news that Corona beer production would be halted has raised eyebrows as to the near-term and long-term prospects for the brand.

As a strategic management expert, I would say that the Corona beer brand is facing nothing less than an existential crisis at this point in time. Constellation Brands and the marketing team behind the Corona brand should be seriously examining just how to proactively respond to this marketing crisis for their company and their star brand. While there may be strong sentiment both inside and outside the company to think that people are smarter than we give them credit for, think about the comment made by that spokesperson for Ayds Candy back in the day. Do we really think that the American public today is "discerning?" With AIDS and Ayds, you at least had a letter’s worth of difference. With Corona and Coronavirus, the words are the same - exactly the same.

And so, I do think that while the company may very well wish that more people and more media would refer to the epidemic and the disease as “COVID-19,” it is a coronavirus, and there is simply no escaping that fact. The branding problem will not magically go away, just as the virus is not magically going away as someone told us it would as the days got warmer.

And as a report from YouGov showed early on, as corona (the virus) worsened, so did consumer reactions to Corona (the beer). The buzz surrounding the Corona beer brand has been negative - steadily - and it has not recovered to date according to YouGov data.

Source: YouGov - Brand Index, February 2020

As the pandemic has taken hold and caused not just a public health crisis, but a mounting economic crisis as well, the toll being exacted by corona (the virus) is going to almost inevitably take a toll on Corona, the brand. It goes without saying, one simply would never want your brand name to be associated with death and depression (both the economic and mental kind!). That is where the Corona brand is today - pure and simple. And in the years to come, due to the magnitude of this event - which is already being compared to monumental historical events such as World War II and 9/11 - that one word - corona - may well be forever changed! It may simply not be possible for a company to market a beer effectively with the same name as not just a virus, but of a landmark historical event, at least not without some very creative - and socially responsible - ways of marketing, advertising, and promoting the product both now and in the future.

By Júnior Ferreira on Unsplash

From my perspective, if I were to advise Corona executives on how to handle this, I would say that - as always - the direct approach is best! They can develop an approach that is both sensitive to the situation that has impacted all of us and yet forthright in defining that the beer is not going away. By acting in a proactive manner, they might - tastefully - be able to leverage the fact that the recognition of the word “corona” is undoubtedly at an all-time, almost inconceivable high right now! Perhaps they should announce that they donate 5% of sales to coronavirus relief efforts. Perhaps they could offer special promotions geared towards the medical personnel, the first responders, the grocery and delivery workers who have become such heroes - or even feature some of these “real life heroes” in their advertising (e.g. “A Corona for a corona hero!”). Perhaps - and this might be tricky - they could even try and inject a bit of “corona humor” into their marketing and advertising (e.g. “Corona Extra: The Official Beer of Quarantine!” or “Corona Light: The Way to Not Gain Weight During Your Self-Isolation”). And yes, from the wisdom of the crowd, there’s been some good marketing suggestions. Witness these:

The coronavirus is definitely the “elephant in the room” for the Corona beer brand. The bottom-line is really simple though: The sooner they really tackle it head on, the better the brand’s long-term prospects will be. They have a chance to save the brand. Now would be the time to do so.

_____________________________________

David C. Wyld ([email protected]) is a Professor of Management at Southeastern Louisiana University outside New Orleans. He is a noted business consultant and speaker/writer on contemporary management issues.

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About the Creator

David Wyld

Professor, Consultant, Doer. Founder/Publisher of The IDEA Publishing (http://www.theideapublishing.com/) & Modern Business Press (http://www.modernbusinesspress.com)

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