News that Constellation Brands has slashed the price of Corona 12-pack cans by about $2 a case is a strategic mistake.
Part of the allure of Corona has been its above-premium positioning. Once a product becomes subject to price cuts, it loses part of its exclusive appeal. (We grant you that “exclusive” is a weird term for such a super-successful brand.)
We’ve seen this before. With Budweiser, for instance.
Part of the objective is to get more Corona volume into cans, rather than bottles. But a bigger objective may be to prop up volume. Corona Extra is down 0.4% in sales volume and Corona Light is down 14.6%.
The Corona brand franchise closed out 2018 up 7.5% in volume and so far this year is up 1.6%, thanks to Corona Premier and Corona Familiar. We suspect Premier and Familiar have cannibalized a bit of the older brands’ volume.
Nonetheless, discounting is almost always a bad idea for a successful brand image, a lesson a number of brewers have learned to their sorrow.
Corona’s discounting was first reported by Beer Marketers Insights.