Background
With the word “corona” being in so many headlines amid the COVID-19 outbreak, Americans are taking precautions to stay safe and isolated from potential infection by the deadly virus. However, a recent study featured on CNN by 5W reports beer drinkers might think twice about ordering the virus’ shared alcoholic namesake during the pandemic.
“38% of American beer drinkers surveyed this week said they wouldn't buy Corona "under any circumstances" at the moment. It's worth noting that, among regular Corona drinkers, only 4% said they would now refrain — that raises questions about whether the virus is, in fact, affecting consumer attitudes toward the brand.”
In response to this study, Maggie Bowman, Senior Director of Communications for the beer division of Constellation Brands, the parent company of Corona, responded to the accusations of brand distortion with the following statement in an interview with PR Week:
“Despite the misinformation circulating, consumer sentiment and sales remain strong. Consumers understand there’s no linkage between the virus and our business.”
5W CEO Ronn Torossian responded to Corona’s statement in response to their study via email saying, “SORRY, UNTRUE, WHAT SPECIFICALLY IS UNTRUE?”
COVID-19 has also sparked many online users to create memes linking the novel virus to the popular brand, Corona. According to Jeff Beer from Fast Company, people are using memes as a coping mechanism for the fears that come with the rising pandemic. Corona beer has not responded to the online meme phenomena. (Figure 1).The famous brand has fallen victim to something no company has had to deal with before. Simply sharing a name with something or someone negative - in this case, the coronavirus pandemic - will impact the success or failure of a brand based upon the company's response. This unique situation brings up the concern of identity and brand preservation in a time of crisis in addition to the almost forced role of engaging in some kind of corporate social responsibility.
How does a brand in the rare situation as the Corona beer company handle a situation in where they share a name with a novel virus killing hundreds of thousands of people globally? How do companies, in respect to a situation such as the pandemic, keep brand identity separate and still show respect toward a sensitive situation?
Current Brand Climate
When it comes to crisis management, one of the first questions a brand should ask itself, according to the Institute for Public Relations is: “Do we need to send a [message]?” and “Just because an organization can, does that mean it should?”
While it may still be early to judge how the famous beer brand is handling sharing the name of the novel virus; its current patterns suggest that the beer company is taking a hint from the Institute for Public Relations by being selective with their responses via social and traditional media.
The company continues to discredit negative claims such as the 5W survey and simply ignore any negative social media attention. Corona beer also seems to have taken on a subtle approach to tackle the effects of COVID-19 and is publicizing their efforts and contributions modestly.
By utilizing the official Corona website and official Twitter account, Corona continues to update select markets that are in areas most affected by the virus or government regulations (Figure 2). In recent weeks, certain states have had to define what essential businesses are, including Indiana, who had determined that the production of beer is non-essential during the pandemic. Decisions like these have prompted companies such as Corona to post updates for these areas on their designated COVID-19 update page.
Corona beer continues to remain positive and steadfast in remaining one of the leading brands within the beer market. While the company itself has not made an official statement directly to its consumers in regards to sharing the name with the novel virus, the beer giant continues to play an interesting role in this COVID-19 era.With the beer company sharing the name and now having to halt production in some areas globally due to Coronavirus pandemic, many speculate that Corona beer will see a major decrease in sales despite their claiming otherwise.
Parent Company, Constellation Brands, released a statement providing factual information on current sales trends increasing in the U.S market amidst the virus outbreak.
Yet, despite their claims that the virus has not impacted business, CNN reported on April 3 that beer production would be halted in Mexico. Though rumors swirled it was due to the downward trend of sales in response to the virus and its association with the Mexican beer, Grupo Modelo - the company that produces the beer in Mexico, ceased operation due to a national order by the Mexican government to close all non-essential businesses.
Constellation Brands (the company responsible for distributing Corona products) CEO Bill Newlands told CNN, the company has an "ample supply (of products) to meet consumer demand" and they are not expecting to see shortages due to Grupo Modelo’s temporary COVID-19 related closure.
Constellation has also reported that their sales have increased during the pandemic, noting that sales of its beer brands have increased 8.9% in the first quarter of 2020, and calling attention to the fact that Corona specifically is one of their biggest sellers. Constellation also shared that Corona sales had shown a spike in the first few weeks of March, averaging 24% higher than they did this time one year ago. Also mentioned was their success with the recent release of the “Corona Hard Seltzer” line - a new product designed to compete with other popular hard seltzers in the market such as White Claw, Bon and Viv, and Truly.
However, consumers did not take kindly to the release in the midst of the coronavirus pandemic. USA Today reported that the timing of this product release was getting negative attention on social media as coronavirus fears globally continue to escalate (Figure 3). Corona Beer continues to not respond to consumers directly via social media.
Bowman also made a statement on behalf of the release saying, “While we empathize with those who have been impacted by this virus and continue to monitor the situation, our consumers, by and large, understand there’s no linkage between the virus and our business.”
Basic Situation Recap
Corona Beer is under scrutiny for a variety of reasons. In addition, they face the challenge of consumers that may be ill-informed by media outlets who are not reporting factual information about the company’s current state during the pandemic. One of the largest variables of this misinformation simply stems from the fact that the beer and the novel virus share a name. Corona beer has taken a stance in only communicating what is needed in order to maintain consumer loyalty and maintain a positive brand image. They have attempted to achieve this through conservative public relations strategies and tactics including:
● Releasing information related to increased sales numbers to debunk misinformation that leads consumers to believe the company will fail as a result of the virus.
● Updating markets most affected by COVID-19.
● Making official statements and reinforcing the notion that there is no scientific, or plausible link to the novel virus and the beer
● Ignoring social media backlash.
● Only responding to criticism via official statements to traditional media outlets such as CNN and USA Today.
Recommendations
A more aggressive way the company might have combated negative press would have been to take advantage of the situation and find a way to spike sales further. This goal could have been achieved by instituting a campaign along the lines of “Drink a Corona to Stop Corona” where a percentage of the purchase of Corona products would be donated to COVID-19 relief funds to help fund research, aid and community access during the coronavirus pandemic. Additionally, the campaign would have made light of the naming coincidence, given an incentive for consumers to want to purchase the product during the pandemic and demonstrate company sensitivity and corporate social responsibility to the beer giant’s publics and therefore setting themselves aside from any other beer in the market for good reason.
Yet despite speculation, it is early on in the pandemic for the final judgement to be made on how Corona is responding to COVID-19 and its position in the market. As the novel virus continues to spread, it is recommended that the Corona beer brand continue to follow a well structured public relations plan in order to show sensitivity to the situation, and engage in a call to action such as the “Drink a Corona to Stop Corona” campaign. Further positive press would be achieved by allowing parent company Constellation Brands to continue making official statements on their behalf and subtly publicizing their contributions to the fight against COVID-19 on their website.
Like W.C. Fields once said, “Everybody’s got to believe in something. I believe I’ll have another beer.”
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