How Corona is emerging from the coronavirus pandemic stronger than ever
Despite various supply chain hiccups and speculation that Corona’s brand value would take a hit during the pandemic, Constellation Brands’ Grupo Modelo – which encompasses Corona, Modelo, Victoria and a handful of other Mexican beers – is looking stronger than ever. Grupo Modelo’s top marketing execs reflect on the value of cultural connection and spell out their vision for the future.
Corona is coming out of the pandemic looking triumphant
In the earliest days of the pandemic, bewildered consumers everywhere sought out information. Google saw a spike in searches for ‘corona beer virus,’ ‘beer virus’ and ‘beer coronavirus,’ per CBS News reports. A February 2020 survey (of a small sample of just 737 US consumers) by 5W Public Relations found that 16% of respondents were confused as to whether or not Corona beer was linked to the coronavirus – and 38% said they would no longer purchase Corona beer.
As it turns out, of course, the deadly Covid-19 pandemic has nothing to do with the popular Mexican lager. And in spite of – or perhaps in some ways thanks to – the phonetic proximity of ‘Corona’ and ‘coronavirus,’ the brand’s sales surged, even during the peak of the crisis. Even after facing initial inventory and supply chain issues due to mandates restricting beer production in Mexico, profits from the beer arm of parent company Constellation Brands leaped 13% during late summer and early fall of last year. And throughout 2021, Corona in particular has been able to not only maintain its popularity but grow its footprint across a number of markets.
‘Coming to people in a supportive way’
To some degree, the beer behemoth’s ongoing success may be attributable to robust product development and brand efforts on the part of Grupo Modelo, Constellation Brands’ Mexican beer portfolio. “The pandemic was ... good for beer in a way, because it helped us to move out of our comfort zone and be much more creative than we were before,” says Fabio Baracho, Grupo Modelo’s vice-president of marketing. “We did some stuff that helped us to develop the category during one of the toughest periods of our history. We were able to enter new occasions where we were not before – for example, daily meals and beer consumption on weekdays. We were able to introduce new liquids, new brands and expand the portfolio for consumers.”
Baracho says that across Grupo Modelo brands, the mission was to focus on purpose and connecting with consumers in new meaningful ways. “When [our brands] come to people in a supportive way, trying to help improve their lives, then we have a powerful way of communicating,” Baracho says.
In fact, the group has centered many of its recent efforts on this mission to improve the lives of people everywhere. In February of this year the company inked a deal with Mexico City in a private sector-public sector effort to build a $12.5m hospital to fight Covid-19.
Then in July, Corona paid fishermen in Mexico to retrieve plastic debris from the ocean in a tournament-style event. The event was a new spin on Corona’s longstanding commitment to ocean clean-up efforts. “Corona’s relationship with the ocean started almost 10 years ago,” says Grupo Modelo’s marketing director Alejandro Gershberg. “This is probably one of the biggest and most important ideas we’ve had since we started talking about the oceans. And it’s going to be global activation – we started here in Mexico ... and we are going to China, we are going to Europe, we are going to Africa. We are going to have many different countries repeating what we did here and making it much bigger, which we really believe is a very interesting way to support communities that depend on the ocean and [who] are being affected badly by plastic [waste in the ocean].”
Kicking off something big
On top of its efforts to combat the spread of the virus and invest in more community-focused sustainability initiatives, Corona saw an opportunity to improve lives on a more emotional level and to “give a little bit of passion and excitement to the people,” says Gershberg. Ultimately, this led to one of its biggest brand marketing efforts of the past few years: ‘El clásico de la historia,’ or ‘The match of the ages,’ a unique activation designed to bring Mexico’s favorite sport back to its fans during a period when stadiums everywhere were shuttered.
The brand teamed with New York-based creative agency We Believers to parse together a full 90-minute soccer match between America and Chivas – the country’s longstanding rivals – by repurposing historical footage from the past 70 years. Corona aired the activation across networks at zero cost. It was a huge hit; the match quickly became the highest-earning media in the history of the brand and, for a time, was the top trending topic in Mexico on social media.
“It’s important to reinforce that Mexico is a very poor country, and people don’t have a lot of options [for entertainment],” says Baracho. “Soccer is probably the most important thing when they think about how to relax and have fun. So this idea that you bring back their most important, enjoyable thing during the pandemic was really important to support Mexicans [during one of the] worst periods of history.”
The activation didn’t hurt the brand, either. The game lifted Corona’s sales 54% compared to a standard week of professional soccer, which might include eight to 11 games. It also scored Corona a Titanium Lion – awarded for ‘breakthrough ideas which are provocative and point to a new direction in the industry’ – at the Cannes Lion International Festival of Creativity this year, making the beer titan the first-ever Mexican brand to take home the prestigious award.
Monitoring market movements
Broadly speaking, Mexican-style beers are growing in popularity. “[The growth of the Mexican beer subcategory] is one of the stronger trends among big beer brands right now,” says David Steinman, senior editor at Beer Marketer’s Insights.
Corona Extra is growing at a particularly impressive rate. Its depletions spiked nearly 5% in the fiscal quarter from June to August this year. Its multi-outlet and convenience store sales are also up in recent months. However, Steinman points out that despite the especially strong performance of beers such as Corona and Modelo, Grupo Modelo has not operated without its setbacks.
Not only has the organization encountered some ongoing challenges with packaging materials availability, driver shortages and other supply chain issues, but Corona saw some seltzer troubles bubble over this year. The brand debuted its Corona Hard Seltzer line in early 2020 amid the boom of the seltzer trend. By early 2021, the fad had cooled; seltzer sales have slowed in recent months, leaving Corona with a surplus of old, out-of-code seltzers. As a result, the brand ultimately had to write off close to $80m.
But it’s not just seltzers that are causing a stir. Grupo Modelo – and its marketing team in particular – are tasked with navigating an industry undergoing rapid change. Boracho says that Grupo Modelo is aiming to stay on top of three trends in particular: the shift toward health and wellness-conscious consumption, the “euphoria” of post-pandemic socialization and the consumer demand for an affordable beer selection.
Grupo Modelo has been investing in new product development to tap into the health and wellness movement. “No-alcohol, low-alcohol and seltzer [products] are all options to address this search for a healthier drink,” says Boracho. “We’re trying to build a portfolio with the beer brands but also ... [expand] some brands to new categories.” The group took sister brand Michelob Ultra, already among the most popular low-calorie beers in Mexico, and launched the Michelob Ultra Organic Seltzer. It’s now leading the seltzer category in Mexico – following a hiccup earlier this year in which the brand settled in court over a false advertising lawsuit brought forth by the small Oregon-based Suzie’s Brewery Company for marketing the fizzy drink as the ‘first’ and ‘only’ organic seltzer on the market.
Grupo Modelo has invested in other health-conscious product development across its brands, including Corona and Victoria. Boracho says that in some local areas, the company mixes together beer, chili and other regional ingredients to create a low-alcohol alternative for drinkers.
At the same time, the group is preparing for an upcoming year or two unlike anything we’ve yet seen. “[It’s] what we call ‘euphoria momentum,’” Boracho says, “that is the reactivation of trade and socialization. We believe that from now to the end of next year, we’re going to have probably the most exciting events of our lives, because people are anxious to go to socialize again and go to restaurants and bars.” He says the company’s calendar of events in Mexico is filling up quickly.
The biggest upcoming event for Corona will be Corona Capital, a multi-day music festival in Mexico City next month headlined by Tame Impala and Twenty One Pilots. At the same time, Grupo Modelo is gearing up to have a major presence at the 2022 Fifa World Cup in Qatar. “[We’re trying] to get momentum with the euphoria that will come with all the experiences and the reactivation of the trade.”
Finally, the group is keeping a close eye on macro-level economic shifts. “Especially in Latin American countries such as Mexico, we know that we’re going to enter into a very tough economic period after the pandemic, and we know that being affordable for consumers is going to be really important,” says Boracho. To speak to this shift while maintaining a focus on growth, Grupo Modelo is launching new promotional activations and applying technology to communicate their value add for consumers in more innovative ways. “What brands like Corona [are trying to do is] help consumers in a moment where they know they’re going to have less money to spend with beer.”
Ultimately, Boracho and Gershberg stress that at the heart of their vision for Corona and the entire Grupo Modelo portfolio is a desire to connect with consumers in authentic, culturally relevant ways – and to improve people’s lives.
“Corona is the biggest Mexican brand all over the world,” Gershberg says. “When I say I’m from Mexico, they will say ‘Corona’ before anything else. The role of this brand is to keep being relevant all over the world, keep prioritizing people and the environment, and bring these types of ideas to people’s lives.”