Coronavirus: Corona Extra sales remain strong, says Constellation Brands, as it hits out against misinformation

02-Mar-2020 - Last updated on 02-Mar-2020 at 18:57 GMT

Pic:getty/woodkern

Constellation Brands says sales of Corona Extra remain strong: hitting out against ‘unfounded claims’ about the impact of the COVID-19 (coronavirus) outbreak on its business and in particular its similarly named Corona beer brand.

The brand has attracted numerous articles and social media posts claiming that the brand has been losing sales and brand equity due to its unfortunate naming similarity with the coronavirus outbreak.

But Constellation Brands says dollar sales of Corona Extra were in fact up 5% in the US in the week ending February 16.

PR firm: '38% of beer-drinking Americans would not buy Corona'

A survey from PR firm 5W Public Relations, published on Thursday (February 27), said that ‘38% of beer-drinking Americans would not buy Corona under any circumstance’. And it said 16% of beer drinking Americans were confused about whether Corona beer is related to the coronavirus.*

In publishing the results, Ronn Torossian, founder and CEO of 5WPR, said: "There is no question that the Corona beer is suffering because of the coronavirus.... While the brand has claimed that consumers understand there's no linkage between the virus and the beer company, this is a disaster for the Corona brand."

Meanwhile, a YouGov survey published on Wednesday (February 26) said Corona Extra’s ‘Buzz score’ – a measure of positive or negative associations with a brand – had dropped since the beginning of the year.

A number of stories have also charted the rise in Google searches for ‘corona beer virus’, suggesting consumer confusion between the beer brand and the virus. US and global searches for 'corona beer virus' have indeed peaked twice: firstly at the end of January and then at the end of last week.

But while a number of news outlets and social media posts have published stories reporting a drop in sales for the brand, Constellation Brands hit out on Friday (February 28) with a response to address ‘unfounded concerns’ about the impact of the COVID-19 virus on the Corona brand.

The name 'corona' comes from Latin, meaning 'crown'. In the case of the Corona beer brand, the crown logo is displayed on every bottle. For the virus, the name comes from the crown-like spikes on their surface.

Constellation: 'We've seen no impact to our operations'

Based on recent IRI retail trends, Constellation Brands says sales of Corona Extra saw dollar sales up 5% in the US in the latest 4-week period ending February 16: nearly doubling the 52-week trend for the brand.

Depletion trends for Corona Extra for the first two months of this calendar year through February 26, as well as the month of February, have also outpaced their 52-week trend, adds Constellation Brands.

In addition, IRI dollar sales trends for the entire Corona brand family are also outpacing their 52-week trend in the latest 4-week and 12-week periods. Furthermore, all business units supporting the beer business are seeing ‘positive sales trends’ for the brand so far in this calendar year, says the company.

Bill Newlands, president and chief executive officer at Constellation Brands, said: “Our thoughts and prayers go out to those affected by this terrible virus and we hope efforts to more fully contain it gain traction soon.

“It’s extremely unfortunate that recent misinformation about the impact of this virus on our business has been circulating in traditional and social media without further investigation or validation.

“These claims simply do not reflect our business performance and consumer sentiment, which includes feedback from our distributor and retailer partners across the country.

“We’ve seen no impact to our people, facilities or operations and our business continues to perform very well.

“Unlike many of our competitors, sales of our beer brands are focused almost entirely on the US market.

“Our company does not have much exposure to international markets such as China that have been most impacted by this situation. I’m extremely proud of the efforts of our team. We’ve built good momentum as we gear up for the upcoming summer selling season.”

With Corona Extra sales up 5% per the latest 4-wk period, our beer business continues its strong performance despite unfounded claims about the impact of COVID-19 on the business and consumer sentiment. Full release: https://t.co/3tr2YeqWZO pic.twitter.com/qNyZMzlnze
— Constellation Brands (@cbrands) February 28, 2020

The imported Corona beer is one of the flagship brands in Constellation's US portfolio.

Globally, AB InBev owns the brand. On Thursday AB InBev estimated lost revenue as a result of the COVID-19 outbreak at around $285m for the first two months of 2020. However, this was attributed to the impact on the virus in general in the Chinese market and not linked to any specific brand (the combined revenues of its three global brands - Budweiser, Stella Artois and Corona - in fact grew 5.2% over FY2019, although AB InBev did not give a breakdown for the sales of each brand).

* 5W Public Relations conducted a survey via phone of 737 American beer drinkers over the age of 21 on February 25 and 26, 2020, regarding their opinions about the Corona beer brand as a result of the coronavirus outbreak.