MillerCoors and Anheuser Busch InBev are struggling to grow their biggest brands, but Constellation Brands is sailing along as Corona and Modelo keep outperforming Bud Light, Coors Light and Miller Lite. Now the marketer is trying to seize on its momentum with new drinks that blur the lines between liquor and beer: a flavored malt beverage version of Corona, a Svedka-branded premium spiked seltzer and a domestic premium beer flavored in bourbon barrels.
Corona Refresca, which comes in guava lime and passionfruit lime flavors, will be marketed as a "premium spiked refresher" targeting women from 25 through 29 years old. The Svedka seltzer borrows the name of Svedka vodka, which is owned by Constellation. The cocktail-inspired drink will come in flavors including strawberry elderflower, tangerine hibiscus and cucumber basil. Both brands check in at a relatively light 4.5 percent alcohol by volume.
Constellation considers the two new drinks part of the "alternative beverage alcohol" segment that includes cider, flavored malt beverages and hard seltzers. Constellation estimates the size of the segment at $3 billion and forecasts growth of $20 million over the next three years.
Still, "alternative" alcohol has proven to be difficult to master, with fickle drinkers jumping from brand to brand. Constellation hopes to leverage the power of its beer portfolio, whose volumes surged 12 percent year-to-date through Feb. 24, according to Nielsen data cited by Beer Marketer's Insights. By contrast, MillerCoors and Anheuser-Busch InBev fell by about 3 percent each in the period.
"We are coming from a position of strength," says Jim Sabia, chief marketing officer for the beer division at Constellation Brands. "We're winning, so we are going to be disciplined and focused."
The marketer will roll out the Refresca and Svedka drinks in a handful of local markets before deciding to go national. Constellation took a similar approach with its new low-calorie Corona Premier brand, which was sold in regional markets before going national this year. Like Premier, Refresca will be handled by WPP's Cavalry. Svedka hard seltzer does not yet have a lead agency.
Constellation, long-known for its Mexican imported premium beer, is also eyeing an expansion into domestically produced beer. It already has U.S. craft brewers Ballast Point and Funky Buddha under its ownership wing, as result of acquisitions.
But now Constellation is beginning to develop its own U.S. beers in the so-called domestic super-premium segment, which covers beers priced at $25 to $35 dollars a case. It will soon roll out a brand in local markets called "Western Standard." Sabia says the brew, which is still under development, would be malt-based but finished in bourbon barrels as result of a collaboration with a Utah-based craft whiskey maker called High West
Even as it expands, Constellation plans to increase investment behind its flagship beers. "We are still spending more money than ever on the Corona Extra brand going forward," Sabia says.
Extra will stick with its long-running "Find Your Beach" campaign with new ads by longtime agency Cramer-Krasselt, including this one:
Fast-growing Modelo will will continue its "Fighting Spirit" campaign by Ogilvy, including this new ad starring former NFL player Anthony Munoz:
Constellation will back its Pacifico brew with its first national TV campaign, called "Anchors Up" by Cramer-Krasselt. Pacifico, which has roots as a California surfer beer, will seek to portray an "independent spirit" with the new ads, Sabia says. "This consumer doesn't want to be tied down by a mortgage or a car payment … they want to explore," he says.
Finally, the marketer's Victoria brand will continue targeting Hispanic consumers with Spanish-language ads starring its "Gregorio" character, a white guy who tries to convince his Mexican friends that he is just like them. The agency is The Community.
