Corona steps on Heineken's turf

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trying to find new drinkers to boost slowing growth of Corona Extra, the brew's marketer for the eastern and southern U.S. is launching its first major promotion aimed at African-Americans.

While Corona lapped Heineken years ago to become the No. 1 import, the Dutch beer in the green bottle still has an edge in the African-American market, said Don Mann, general manager of the Modelo brand marketing group at Gambrinus Co.

"The African-American market really isn't an area where we've given a whole lot of attention," he said.

party push

To try to build its position, Gambrinus is teaming with urban radio stations in 12 cities to promote and host "white linen" parties at nightclubs from June 1 to July 31. Such parties, at which people wear their best summer whites, are increasingly popular in the African-American community, according to Steve Canty, account supervisor at GlobalHue, the Southfield, Mich.-based multicultural agency that's handling the promotion. Celebrities such as Magic Johnson and P. Diddy are known for hosting them

The promotion is tagged "Smooth Out Your Summer Corona Style." Hip-hop inflected radio ads-which feature rapping over steel drums and bass-broke last week.

Gambrinus is spending about $1 million on the promotion. That's a fraction of the $34 million Corona plans to spend this year on national TV advertising. But it's more than Gambrinus has allocated in the past, when it ran only a small amount of radio advertising aimed at the African-American audience.

Gambrinus, which represents more than half Corona's U.S. sales, markets the beer in 25 eastern states and the District of Columbia. About 75% of the U.S. African-American population resides in its territory.

Barton, which handles the rest of the country, isn't planning any effort focused on the African-American market, said Barton President Bill Hackett. He said there's no need for a separate campaign distinct from Corona's beach and escape-themed "Miles Away from Ordinary" effort.

Gambrinus is launching the promotion after the beer posted a disappointing showing nationwide in 2003. Last year shipments increased by 5% to 94.7 million cases, according to estimates from Impact Databank.

That's better than the overall beer category's flat performance and ahead of the overall import category's 1.9% increase. But it's still the brew's worst showing since 1991, according to Impact. Corona shipments increased by 7.2% in 2002 and 15% in 2001.

Corona was hurt by the same factors that flattened results for other beers, including a wet summer last year and a weak economy, industry experts said.

But Corona is facing another marketing challenge in that it's gotten so big-in supermarkets it's the sixth-largest beer brand, just ahead of Miller High Life, according to Information Resources Inc.-that growth is harder to come by.

"It's a big brand," says Frank Walters, director of research for Impact. "You can't expect a brand that big to continue to grow by 12% to 15% a year."

sales up

Another challenge: Mexican brewer Modelo increased prices for Corona. The price hike, which is up to 10%, filtered down to the retail level in February and March.

But so far Corona sales are better than last year, Mr. Mann said. For the first three months of the year, nationwide sales were up about 8%.

For the promotion, Corona is teaming up with radio stations in New York; Miami; Washington; Atlanta; Houston; Birmingham, Ala.; Baltimore; New Orleans; Philadelphia; Charlotte, N.C.; Jacksonville, Fla.; and Memphis, Tenn. It will be supported by point-of-sale materials at retailers as well as posters, pennants and banners at clubs hosting the parties.

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