Someday this will be a marketing case study. You’re Constellation Brands. One of your leading brands is Corona beer. Then out of China comes a virus that has your name on it. You’re blowing up on social media for all the wrong reasons. And to top it off, you have a major product extension on the books with millions in media behind it.
So far we know two things about this future case study. One: The general public has backed off Corona beer for no apparent reason other than general hysteria. Two: Corona is going full speed ahead with the launch of its hard seltzer brand extension. What we don’t know is whether or not the retailers that will sell this — or any product for that matter — will be hit domestically by fear of being in public places.
According to Eater.com, searches for “corona beer virus” have been spiking and a recent phone survey conducted by 5W Public Relations, found that 38 percent of respondents said they “would not buy Corona under any circumstances now”; 4 percent of respondents who usually drink Corona said they would stop drinking; 16 percent of respondents “were confused about whether Corona beer is related to the coronavirus.”
The campaign for Corona Hard Seltzer launched on Tuesday with the tagline “Coming ashore soon.” The company had announced a $40 million campaign at launch. Apparently Constellation Brands will continue with its Corona marketing campaign as planned. “Our advertising with Corona is consistent with the campaign we have been running for the last 30 years and is based off strong consumer sentiment,” a spokesperson told CNBC. “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.”
Although there have not been any retail closings or public event cancellations, that has not been the case in China. “Brick-and-mortar retailers and restaurants are dealing with the harsh realities of cities across China being placed under lockdown, as local governments enforce quarantine measures and restrict trips outdoors,” said eMarketer. “Major retailers like Starbucks, Uniqlo, Nike and Apple had temporarily shuttered their stores, while small and medium-size retailers are being hit particularly hard as foot traffic dwindles.” The report added that some brands, such as Apple, had begun to reopen stores, possibly signaling an improved outlook.
Supply chain problems due to the coronavirus, however, are rampant. As reported in Forbes, 99 percent of shoes sold in the U.S. are imported, with 70 percent coming from China. Steve Madden said Thursday (Feb. 27) that although the majority of its Chinese factories have reopened, retailers should prepare for delays.
“Even the factories that are open are not operating at their normal productivity,” Steve Madden CEO Edward Rosenfeld said on a conference call Thursday, adding that only about a third to two-fifths of its China factory workers have returned to the manufacturing floors. “This is obviously a very fluid situation, but currently we're looking at, on average, production delays of about three weeks.”
About that case study. With so much on the line for Constellation, going forward with the hard seltzer campaign will take constant measurement. In these days of AI-driven sentiment analysis it will be easy to see if the timing is necessary or disastrous for Corona. Caution seems to win in these situations especially as retailers keep a close eye on their foot traffic.