Corona Beer’s Experience During Virus Outbreak
Provides Lessons for CPG Brands       

By Dale Buss

Corona beer has faced a misguided perception by some consumers that the brand is related to the coronavirus. And while the popular brew owned by Constellation Brands seems to have moved past any initial alarm by ignorant consumers, all companies can learn a valuable lesson from the frustrating episode: Every brand should be ready for a similar crisis.

In fact, Corona’s unfortunate association with the COVID-19 virus in the minds of some consumers – stoked by media reports – only follows on the heels of other brand-reputation setbacks over the decades. They range from the substantive, such as Johnson & Johnson’s crisis of poisoned Tylenol in 1982, to the niggling, such as Procter & Gamble’s need for several years in the 1990s to deal with false rumors that its logo had origins with Satan worshippers.

Either way, the “Corona virus” kerfuffle is just the latest example of the kind of dilemma that every brand wants to avoid but that will afflict many over time, said Deb Gabor, CEO of Sol Marketing, a brand-strategy consultancy that has led engagements for CPG brands as well as digital stalwarts including Allrecipes, HomeAway, Dell and Microsoft. But, she advises, brands aren’t helpless to inoculate themselves against when that day comes.

“Your brand is going to face a crisis at some point,” Gabor told CPGmatters. “Whether you are expecting it or not, or whether you are causing it or not, it’s not a question of whether you’re going to face a crisis but of when. It might not be a pandemic, but something else that causes an emotional connection between your brand and something like that.”

In the case of Corona, the Mexican-beer brand has been damaged not only by the unfortunate duplication of its name with a shorthand for the virulent new disease that is roiling global supply chains, consumption patterns and entire economies these days, but also by its unwitting launch of a slogan for its new hard seltzer.

A promotional post by Corona on Twitter late last month showed four cans of its newest product line on a beach and the words, “Coming ashore soon.” Consumers didn’t have to make much of a leap to a bad portent from anything named “corona” as coming anywhere near them, at any time.

The potential damage from the coincidence of the brand name with the virus was highlighted by a survey by New York City-based 5W Public Relations released in late February that found 38 percent of beer-drinking Americans would not buy Corona under any circumstances now and 16 percent who said they were confused about whether Corona beer was related to the Corona virus. At the same time, the intent to purchase Corona among U.S. adults slid to its lowest point in two years, according to YouGov Plc, which released the results of its own survey.

“There is no question that Corona beer is suffering because of the coronavirus,” the agency said in a statement. “Could one imagine walking into a bar and saying, ‘Hey, can I have a Corona? 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. After all, what brand wants to be linked to a virus which is killing people worldwide?”

Gabor is among the many who’ve insisted that the actual damage to the Corona brand has been minimal, among other things pointing to the fact that the agency interviewed only about 750 consumers and that nearly four in 10 indicated they’d never drink Corona anyway.

Despite a dip in Constellation’s stock price that also presumably owed to the general market downdraft due to coronavirus-related fears, a statement by the Corona brand insisted that all was basically well. “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,” the statement said.

And, further, a Constellation spokeswoman defended the hard-seltzer slogan, telling USA Today that the campaign was based on “strong consumer sentiment” and consistent with campaigns that Corona has been running for the last many years, the latest manifestation of which has been under the motto, “Find your beach.”

Gabor agreed that Corona already is “on the back side” of this story and lauded Constellation for its approach to handling the difficulty.

“They responded swiftly and openly and transparently and didn’t get into it with the PR firm,” she said. “They didn’t take the gloves off and start a fight with them.” Instead, Corona “relied on the relationship that they’d already established with consumers.

“It’s like being in a relationship with a partner. You need to positively deposit into the relationship so that you can handle the reverses. Behaving in a classy and authentic way – with kindness – is important to build up that bank account with consumers to protect the brand at a time like this.”

Other CPG brands also should learn from Corona’s experience, Gabor said, because “they might also still be impacted by the coronavirus, whether they like it or not, and depending on how long this goes in. This is especially true of CPG brands that have a global supply chain. There also could be greater concern for CPG beverages, because we still don’t know everything about how this virus is communicated.”

And if not now, perhaps later.

“You’re going to have a crisis at some point,” Gabor maintained. “It may not be during the coronavirus; it could be at another time or for another reason. But brands need to be prepared with a crisis-management and crisis-communications protocol: ‘Here’s how we’re going to communicate and take responsibility and be fully accountable.’”

                                                                     Mid-March 2020
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