In a year that is unlike any other, the pandemic has wrecked havoc on the trademark for Corona. First, consumers were confused about the association of the beer with the virus. Then, as a result of increased demand for alcoholic beverages, Corona was sued as a result of sales of fruity fizzy flavored beverages. One key take away, when choosing a good brand name, avoid ones associated with global disasters. While some publicity experts might say there is no such thing as bad publicity, a global pandemic might be the exception.
CHOOSING A GOOD BRAND NAME
Before the brand name was associated with a global pandemic, Corona was widely known for its use in connection with beer. Since at least 1943, the brand has been in used throughout the world in connection with beer. Choosing a good brand name includes a name which can stand the test of time. Since 1943, Corona has been well known for beer. However, over the last year, the term Corona has become a widely discussed and common phrase which is widely associated with a devastating health crisis which has resulted in economic damage and the loss of millions of lives throughout the world. As a result, the brand Corona has suffered.
GLOBAL DISASTER CAUSES CONFUSION OF TRADEMARK WITH HEALT CRISIS
Corona beer is produced by Cervecería Modelo in Mexico (“Modelo”). It is licensed and distributed in the United States by Constellation Brands. In the early days of the pandemic, Corona beer was associated with the virus based on some search statistics tracked by Google. Google Trends data showed that the search numbers for ‘corona beer virus’, ‘beer virus’, and ‘beer coronavirus’ grew by 2,300% in January 2020. In the same time frame, searches for ‘beer virus’ increased by 744% and searches for ‘beer coronavirus’ increased by 3,233%.
PANDAMIC DAMAGES GOODWILL AND REPUTATION
As a result of the negative connotation with the pandemic, the brand sales and stock suffered. Based on some initial research, Modelo suffered reputational damage based on a number of social media memes linking the beer ‘Corona’ to the coronavirus. Studies have shown that during the pandemic, US sales of Corona beer has fallen to its lowest level in the past two years, while the perception of the brand has also collapsed. In a phone survey, with 737 American beer drinkers, 38% indicated that they would not buy Corona under any circumstances since the beginning of the coronavirus. Another, 16% of respondents indicated they were confused as to whether Corona beer was actually related to the coronavirus. Since the start of 2020, Corona’s brand perception has had a sharp decline.
Fizzy Corona Fuzzles?
Choosing a good brand name includes a name which can be used for new products. Sales of alcoholic beverages has increased dramatically during the global pandemic. As folk are spending less time at bars, folks are drinking more at home and this includes an increase in fruit flavored beverages. Fizzy beverages are the fastest growing segment of the alcoholic beverage market with some analysts predicting global sales to increase to $30 billion by 2025. Taking advantage of this trend, Constellation launched a $40 million marketing campaign and has grown to the fourth-largest fizzy beverage brand.
In 2013, Constellation purchased the rights to the Corona brand from Modela. Under the license agreement, Constellation had the exclusive right to sell Corona brand products in the U.S. However, that license was limited to beer. As consumers’ appetite for fruit flavored fizzy beverages has increased, Constellation, had started to produce fruit flavored beverages under the Corona brand. Modela, which is owned by Anheuser Bush InBev, also sells fruit flavored beverages in the U.S. and has taken exception to Constellations use of the Corona brand for these fizzy fruity flavors.
In the suit, Modelo claims that Constellation’s license only allows use of the Corona brand in the U.S. and Guam for beer, which means “beer, ale, porter, stout, malt beverages, and any other versions or combinations of the foregoing, including nonalcoholic versions of any of the foregoing.” Anheuser Busch, InBev argues this does not include fizzy fruity seltzers.
The case is still in the initial stages. If you have questions about trademarks including trademark protection, trademark infringement, trademark dilution or trademark agreements please contact one of our trademark attorneys.