Corona Beer: Impact Of A Pandemic On Sales And Brand Image

Did people stop buying Corona beer?

Constellation Brands, the producer of Corona beer, reported a surge in sales in the early months of 2020. However, a survey by 5W Public Relations found that 38% of beer-drinking Americans said they would not buy Corona under any circumstances. This was fuelled by the spread of COVID-19, which shares a name with the beer. However, only 4% of regular Corona drinkers said they would stop drinking the beer, and sales of Corona Extra increased by 5% in the four-week period ending February 16, 2020. So, while some people may have stopped buying Corona beer, sales of the beer were not significantly affected.

A survey found that 38% of beer-drinking Americans would not buy Corona

A survey conducted by 5W Public Relations found that 38% of beer-drinking Americans would not buy Corona "under any circumstances" due to the similarity in name with the coronavirus. The survey, which polled 737 American beer drinkers, also found that 14% of Corona drinkers would not order the brand in public, and 16% were confused about any relation between the beer and the virus.

Despite the survey results, sales of Corona beer remained steady throughout 2020, and it continued to be the most valuable beer in the world. However, there was a 12% decline in revenue in the first half of 2020 compared to the same period the previous year. This decline was attributed to reduced activity and lockdowns due to the pandemic, rather than a direct association with the virus.

The coronavirus pandemic caused a lot of panic and uncertainty, and it is understandable that some people may have made the connection between the beer and the virus due to their similar names. However, it is important to note that there is no link between the two, and the similarity is merely coincidental.

Constellation Brands, the company that owns Corona beer, stated that they believed consumers understood the distinction between the virus and their beer. They also mentioned that they had no plans to change their marketing strategy due to the virus.

Corona's parent company reported increased sales in the US

Constellation Brands, the parent company of Corona beer, reported strong sales in the US in the four weeks leading up to February 16, 2020. This was despite the rapid global spread of the coronavirus, which shares a name with the beer. In fact, Constellation Brands stated that all units supporting its beer business were seeing positive sales trends for the brand so far in 2020.

The company's CEO, Bill Newlands, attributed the strong performance to the fact that Constellation Brands did not have much exposure to international markets such as China, which had been most impacted by the outbreak. He also mentioned that the company's operations and facilities had not been affected by the virus.

However, it is important to note that Corona beer sales did drop in China at the beginning of the pandemic, and AB InBev lost around $200 million due to the lack of sales. Additionally, a survey conducted by public relations firm 5WPR found that 38% of beer-drinking Americans said they would not buy Corona beer because of its association with the coronavirus.

Nevertheless, the overall impact of the pandemic on Corona beer sales seems to have been minimal, and the beer remains the top-selling imported beer in the US.

Constellation Brands' breweries in Mexico remained operational

Constellation Brands, the company behind Corona beer, has breweries in Mexico that remained operational during the COVID-19 pandemic. While the pandemic caused a global economic crisis, it did not stop people from buying Corona beer. In fact, Corona remained the top-selling imported beer in the US during this period.

However, Constellation Brands did face some challenges due to the pandemic. There was a decline in revenue in the first half of 2020 compared to the previous year, and AB InBev lost around $200 million due to reduced sales when the pandemic began. This was mainly due to the closure of bars and restaurants, which account for a high percentage of Corona beer sales.

Constellation Brands also faced some issues with its brewery construction plans in Mexico. In 2020, the company halted construction of a brewery in Mexicali due to a dispute over water access. The project, which cost hundreds of millions of dollars, was rejected by voters after locals argued that it threatened their water supply.

Despite this setback, Constellation Brands pushed forward with its expansion plans in Mexico. In 2021, the company announced an agreement with the Mexican government to build a new brewery in the southeastern part of the country, which has a plentiful water supply. The company plans to invest $5.0 billion to $5.5 billion in fiscal 2023-2026 on this new brewery and two other plants already in operation in Mexico.

Constellation Brands' breweries in Mexico have remained operational during the pandemic, and the company continues to invest in the country, ensuring the continued production and supply of Corona beer to the US market.

Corona sales dropped in China

In February 2020, Corona beer sales dropped in China. AB InBev lost around $200 million due to the lack of sales when the pandemic began. The drop in sales was attributed to reduced activity and going-out restrictions. The Chinese New Year, a significant period for alcohol sales, was impacted by coronavirus restrictions, with fewer people visiting bars and restaurants, which accounted for a large proportion of Corona beer sales.

The outbreak of COVID-19 led to a significant decline in demand in China, affecting both on-premise and in-home channels. The pandemic caused a decrease in consumer spending and a shift towards cheaper alternatives, impacting beer sales. AB InBev's performance in China was negatively affected by reduced spending in bars and restaurants, resulting in a 16.1% revenue decline in the country.

Despite the challenges, AB InBev's Corona brand demonstrated resilience, with a 10.2% revenue increase globally, excluding Mexico. The company's overall earnings also benefited from production-cost efficiencies, resulting in a 7.1% increase in earnings for the quarter.

Corona is still the world's most valuable beer

Despite the challenges posed by the COVID-19 pandemic, Corona has retained its status as the world's most valuable beer brand. Owned by Anheuser-Busch InBev, the world's largest beer manufacturer, Corona was the top-selling imported beer in the US since 1998 and continues to be the most valuable beer above Heineken and Budweiser.

During the pandemic, the brand faced consumer hesitancy due to its similarity in name with the coronavirus. This resulted in a 12% decline in revenue in the first half of 2020 compared to the previous year. However, surprisingly, sales remained steady for the rest of the year, and Corona maintained its position as the most valuable beer brand.

In 2021, Corona recorded a 28% drop in brand value, amounting to a loss of $2.243 billion, bringing its brand value to $5.8 billion. This dip in brand value was likely due to consumer hesitancy, especially in the US, one of Corona's biggest markets. Despite this, Corona demonstrated extraordinary resilience, showcasing the strength of the global brand.

While the pandemic caused a decline in sales for Corona, the primary reason for the drop was not the negative name association but reduced accessibility due to lockdowns and restrictions. With bars, restaurants, and pubs closed, sales from these venues were lost, while supermarket sales of Corona remained consistent. Only 4% of Corona drinkers said they would stop consuming the beer due to its association with the pandemic.

In conclusion, despite the challenges posed by the pandemic and consumer hesitancy due to its name, Corona has demonstrated resilience and maintained its position as the world's most valuable beer brand.

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