Below-the-belt Rumors Hit Corona Beer Fad

Posted: August 29, 1988

LOS ANGELES — Hold the lime. Corona Extra sales are starting to slip.

Sales of Corona Extra, the Mexican beer that saw five years of phenomenal growth and became the yuppie beer of choice, slipped 7 percent through June after increasing 84 percent in all of last year, importers said.

Analysts attribute the softening to such factors as market saturation, the increased price of imports and false rumors that brewery workers were contaminating Corona with urine.

Though many retailers are quick to point out that the brand remains popular, they acknowledge that Corona's growth has slowed.

For example, Corona sales were off by about 20 percent in northern California in the first six months of 1988, according to Chicago-based Barton Beers, the importer for California and 24 other states.

A key element in the decline was the whisper campaign started by a competing distributor that Corona brewery workers were urinating in the beer. Barton took legal action against the distributor and received an out-of-court settlement last summer.

"In many areas, Corona lost the magic when that rumor started," said Jerry Steinman, publisher of Beer Marketer's Insights, a newsletter based in West Nyack, N.Y.

"Corona is a fad, a good beer, but a fad," said Robert Weinberg, a beer industry analyst and president of R.S. Weinberg & Associates in St. Louis. "I don't know if the fad is over, but it is certainly flattening out."

Furthermore, Miller Brewing Co. and Anheuser-Busch Inc. - the nation's leading brewers - have introduced their own long-necked bottles, cutting into Corona's high-priced market. Competition also is coming from Mexican beers such as Pacifico and Dos Equis.

Despite these setbacks, the clear glass long-necked bottle with the painted label - which trendy drinkers prefer with a wedge of lime - still claims the No. 2 spot for imported beer in the United States. In many markets, it's No. 1.

"We are very content with where we are," said Ellis M. Goodman, president and majority stockholder of importer Barton Beers Ltd. "Corona was the first brand to import in a long-necked bottle. And now everybody is in long necks. We expected to see much stronger competition, and we got it."

Corona sales went from almost nothing in 1982 to about 25 million cases last year - with the largest growth in southern California.

In years past, there was such a frenzy to get Corona that the brewery, Cerveceria Modelo, S.A. of Mexico City, could not produce it fast enough.

In Texas, where Corona has been distributed for seven years, sales are off more than 11 percent, according to Ron Christesson, marketing manager for San Antonio-based Gambrinus Importing Co. Inc.

"It is fairly significant if you compare it to a year ago," said Christesson of Gambrinus, which distributes Corona to about 20 Eastern and Southern states. "But 1987 was an aberration with a phenomenal amount of growth. And it's not a fad, because fads don't last seven years."

Ed Nelson, administrative manager for San Antonio-based Procermex Inc., which owns the Corona trademark and acts as a consultant to the brewery, said market saturation caused sales to dip.

"We are not the newest thing out there anymore," he said.

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