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Corona Extra : brand profile

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In the all-important US market, the #1 imported brew still comes from south of the border. Mexico's Corona Extra pushed Heineken into second place in 1997, and has steadily increased its lead ever since, becoming one of the world's biggest beers as well as its home country's single most valuable brand, according to Interbrand. For years, US giant Anheuser-Busch derived only an indirect benefit from this success, as a result of a stake of just over 50% in Corona's owner, Grupo Modelo. In 2012, following Anheuser-Busch's acquisition by InBev, the enlarged group made an offer to acquire the remaining shares in Modelo to take full control of the business. That deal was challenged by competition regulators, obliging AB InBev to surrender rights to Corona in the US to Constellation Brands. As a result, AB InBev owns Corona and Modelo's other Mexican beers in all other markets except the US, taking back international rights from previous partners such as Carlsberg or Molson Coors.


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Brands & Activities

In addition to being the best-selling beer in Mexico, Corona Extra is the 5th biggest-selling beer worldwide with total retail sales of around $8.0bn in 2014. A large proportion of this figure is contributed by the US, where it has been the #1 imported beer since the mid 1990s.

Corona Mexico

The Corona brand is controlled by Grupo Modelo, the leading producer and marketer of beer in Mexico with over 58% share of the domestic market in 2015. It is a wholly owned subsidiary of AB InBev. Its main domestic competitor is FEMSA Cerveza, now a unit of Heineken, which has around 38% local share in Mexico. (Rather like soft drinks marketers in the US, the two brewers each have exclusive contracts with bars and restaurants, so most outlets sell only the brands of one or other company).

Prior to its acquisition by InBev, American brewery giant Anheuser-Busch already owned what was effectively a 50.2% investment stake in Modelo, comprising a 35% shareholding in the parent Grupo Modelo company and a separate 25% economic stake in its main operating subsidiary Diblo Corporativo. Nevertheless, the Mexican group retained management control. Five separate families, led by former CEO Antonino Fernandez and his nephew and current CEO Carlos, shared a 45% equity stake in Grupo Modelo. The remaining shares were publicly traded.

The acquisition of Anheuser by global rival InBev created something of a dilemma for Modelo's controlling family, which had been keen to maintain its effective independence. Initially, Anheuser had attempted to escape InBev's hostile bid by offering to buy up the shares in Modelo it didn't already own. That proposal was rebuffed by the Fernandez family. Following the successful takeover of Anheuser by InBev, Modelo attempted to argue that, under Mexican law, Anheuser could not transfer ownership of its shares in Modelo without first giving the company the chance to buy itself back. A legal dispute ensued, and eventually resulted in a defeat for Modelo when a judge upheld the transfer of shares to AB InBev. After two further years of negotiations, AB InBev agreed in 2012 to acquire the outstanding shares for $20.1bn, to take full control of Modelo. However in early 2013 the US Department of Justice announced a lawsuit opposing the Modelo takeover on the grounds it would reduce competition in the US market.

Under the original deal, Constellation was to have bought out Modelo's share in Crown Imports for $1.85bn, but would retain US distribution rights to Corona Extra and other Modelo beers only until 2016, when they would revert to the enlarged AB InBev. That arrangement upset regulators because it would boost InBev's US beer share above 50%. To resolve the impasse, InBev offered to surrender US rights to the Modelo portfolio permanently, as well as the brewery which produces all export supply. Constellation paid a higher price of $4.75bn to take full control of the Crown Imports distribution business, and in the process became the #3 beer marketer in the US after AB InBev and Miller Coors. The deal completed in June 2013.

For 2015, AB InBev generated revenues of $3.95bn from Mexico, only slightly below the total contribution from Europe ($4.0bn). Operating income was $1.7bn. Total volumes rose 7% to 41.6m hl.

AB InBev now operates nine brewing plants in Mexico, producing 14 brands. Foremost among these is Corona Extra, first brewed in the year Modelo was incorporated, and by far the best-selling Mexican beer, with almost twice the volumes of the #2 brand. Other group brands include Modelo Especial, with worldwide retail sales of $2.5bn in 2011 (according to Modelo), Victoria ($1.6bn), Leon, Pacifico (and Pacifico Light), Negra Modelo, Estrella, low alcohol Tropical Light and a small selection of regional beers. In addition the company is the exclusive distributor of Anheuser-Busch's products in Mexico, including Budweiser and Bud Light, and handles Tsingtao and Carlsberg under contract. The group licenses out its brandname to Modelorama, a chain of 6,000 franchised retail stores. The group still exports to around 180 countries worldwide, and Corona is the biggest imported beer in almost 50 territories.

Corona Extra USA

Corona was first imported into the US in small quantities in 1978. It was officially launched in Texas in 1981, and gradually extended distribution throughout the country, supported by a low-cost marketing campaign centred around the celebrated donkey of La Roqueta. This poor animal had become a tourist attraction in the 1950s on a small island off the coast of Acapulco because of its habit of picking up bottles of beer with its teeth and drinking them. Initial marketing of Corona in the US used postcards and posters of the donkey drinking a beer, and these proved enormously popular with students. So did the habit of lodging a wedge of lemon or lime in the bottle's neck before drinking. Promoted under the slogan "change your whole latitude", Corona had become the #2 import behind Heineken by 1985, before overtaking its rival 12 years later. Following the growth of the light beer category in the US, the company introduced Corona Light in 1988. Emulating the success of its stablemate, it was the first imported beer to sell more than one million cases in its introductory year. Corona Light is only available in the US market, and is now the #2 imported light beer.

The brand's strong performance in the US during the 1990s was unprecedented. No other import had ever previously achieved such a high penetration of the highly conservative domestic beer market. However even the beer's strongest supporters would acknowledge that a key factor for several years was the fact that US distributors Crown Imports - a joint venture between Grupo Modelo of Mexico and Constellation Brands of the US - made little or no specific reference to Corona's Mexican heritage in its advertising, with the result that many US drinkers assumed it was a homegrown brand. Another key element in the brand's marketing has been its distinctive look - the long-necked bottle, ceramic label and above all a slice of lime poked into the bottleneck, a quirk that established a distinct personality for Corona during its rollout. (That particular ploy was shamelessly borrowed by arch-rival Mexican beer Sol when the latter launched into Europe at the end of the 1980s.)

Until 2006, Corona's American distribution was split between two companies. Barton Beers in Chicago (a division of Constellation Brands) and Gambrinus Company of Texas split the country between them into western and eastern regions. However, Gambrinus was dropped in 2006, and national distribution transferred to a new joint venture between Constellation and Modelo which was rebranded as Crown Imports at the end of 2007. Despite its parent's connection to Anheuser, Corona operated as a competitor to the latter's US portfolio, notably Anheuser's own Mexican-styled brew Tequiza.

However American sales began to slip in 2007 for the first time since the 1990s, dented by the economic slump which impacted hardest on Corona's key audience of Hispanics in California and Arizona, as well as an ill-timed price increase. (Rival Mexican imports such as Dos Equis declined to follow suit after Corona's import price was lifted by almost 5% during the year, and as a result enjoyed a significant increase in sales). Corona Extra's volumes fell by almost 1% during 2007, although some of that ground was made up by a 10% rise in volumes for Corona Light, and 14% for Modelo Especial.

Corona's sales were further dented during 2008 by Hispanic-style brand variants from mainstream brews, such as Bud Light Lime and Miller Chill. Corona Extra's volumes fell sharply - by as much as 10% in 2009 alone - to a low of under 7.2m barrels before stabilising in 2010, and then beginning to rise once again. For 2013, Crown's combined volumes grew by 6% to 13.03m US barrels, equivalent to 6.2% of the US market (according to Beer Marketer's Insights). That figure was far behind AB and MillerCoors (at 45.6% and 27.0% respectively), but comfortably ahead of 4th placed Heineken (at 3.9%, 8.3m barrels). Corona Extra accounted for 7.44m barrels (3.5% share) and Modelo Especial for 3.75m barrels (1.8% share).

For 2015, IRI ranked Corona Extra as the #5 beer in the US (behind Bud Light, Coors Light, Budweiser and Miller Lite) with off-trade sales rising more than 14% to $1.54bn (or almost 50m cases). There was an even bigger jump for stablemate Modelo Especial, which jumped 27% to $924m (32.6m cases), widening its lead over Heineken (at $729m or 23.6m cases). Corona Light added an additional $253m (8.5m cases) and Pacifico $76m (2.6m cases). According to Constellation Brands' own figures, combined shipments of its US beer portfolio for the year ending Feb 2015 rose 10.4% to 201.4m cases.

In 2016, Constellation introduced a second Corona variant under the name Corona Premier, with lower calorie and carb content. That was followed in 2018 by the brand's first malt beverage variant, fruit flavoured Corona Refresca.

Among other activities, Corona Extra became the official beer of the Los Angeles Rams NFL team in 2016.

Corona International

The buyout of Modelo by AB InBev resulted in a steady restructuring of Corona's international distribution arrangements, as these were gradually assimilated by AB InBev. In Canada, Corona's #2 international market, distribution was previously managed by Modelo Molson Imports, a joint venture with Molson Coors. That arrangement was terminated during 2014. Corona is the #1 imported beer here too with a 20% share of the premium imported segment.

Following its initial success in North America, Corona's distribution was gradually extended around the world, initially in Japan, Australia and New Zealand, followed by Europe during the 1990s. Its most significant international distribution partner was Carlsberg. The Danish brewer had managed Corona in Italy, Switzerland, Malaysia and Singapore for several years, and expanded its coverage to nine Eastern European territories in 2009, including Russia. These have all gradually reverted to AB InBev. It was handled in the UK for many years by Wells & Young's, but distribution transferred to Molson Coors UK in 2011. It reverted to AB InBev in 2015.


Founded in 1925, Modelo came under the control of Spanish-born Pablo Diez in 1930, and he expanded the business rapidly over the following years by taking over a string of smaller regional Mexican breweries, including Victoria in 1935 and Pacifico in 1954. Despite this expansion, the company remained conservative in the extreme, even refusing to hire married women as secretaries because of Diez's belief that the correct place for a married woman was in the home, not the workplace. In the 1970s, management control passed to another Spanish-born manager, Antonino Fernandez, who in turn groomed his nephew Carlos for succession in the 1990s.

That decade was a period of considerable change for the company. The North American Free Trade Agreement, which reduced import tariffs on trade between the US and Mexico, was agreed in 1992. Although this offered considerable opportunities for Mexican companies, it also raised concerns of an aggressive invasion of Mexico by US competitors. As a result, Modelo chose in 1993 to seek security in the arms of its biggest potential rival, Anheuser-Busch, selling what was initially an 18% stake for around $477m. The US company subsequently increased that shareholding, although it left management control of the business with the Mexican owners, and also allowed Modelo to structure its own deal for export into the United States.

Last full revision 21st February 2017

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