After Corona Beer Production Halted, You Can Actually Bet on Company Changing Brand Name

Bucket of Corona beer in an ice bucket.
Will Corona beer have a new name by the end of 2021 because of the coronavirus outbreak? Photo by Panos Sakalakis (Flickr).
  • All Corona beer production has been stopped as the Mexican government has told all non-essential businesses to close.
  • Contrary to some early reports, Corona beer had not seen a dip in sales because of a possible name association with the coronavirus
  • Corona beer has been around since 1925, so it’s unlikely the brand name changes as a result of this pandemic

The coronavirus pandemic hasn’t exactly been good news for the Corona beer. With similarities between the two names, some have wondered what impact COVID-19 will actually have on the Corona beer brand. Now that the Corona beer plant was forced to shut down (due to the pandemic), will Modelo decide to rename the Corona beer brand?

Corona Beer Odds

Prop No Odds Yes Odds
Will Corona Light/Extra change brand name before 2021? -2500 +800
Will Grupo Modelo declare bankruptcy before 2021? -2000 +700

Odds taken Apr. 6.

Corona Beer Plant In Mexico Stops Production

Insert your humorous “Coronavirus Has Gotten Corona Beer” headlines here. While it might seem like there’s some kind of funny story here, the reality is that the Mexican government has shut down all non-essential businesses. Unfortunately, making beer is not an essential business, so production had to be temporarily suspended.

Although people will want to make more of this story than what it is, that’s really all that’s happened here. Modelo Group, the maker of Corona beer, has also halted production of Modelo and Pacifico beers too, so it’s not as if COVD-19 took out one beer specifically.

Have Corona Beer’s Sales Tanked?

There has been some conjecture that Corona beer sales are down due to it having a similar name to the coronavirus and that some people made some kind of association between the two. However, that appears to have been misinformation.

Constellation Brands Inc. reported in late February that they had not seen any impact on the Corona beer brand sales. As a matter of fact, at the time, they had reported a five-percent rise in sales for the brand in the four-week period ending on February 16th. Of course, the pandemic has only worsened since.

Even so, any challenges in sales have mostly been industry-wide and not just specifically the Corona beers. Of course, with no sporting events happening, no festivals or concerts, and most bars shut down, all beer and liquor brands are being hurt by this. In China, Corona suffered an estimated $170 million in losses but other beers suffered too.

It’s not a direct result of people making a coronavirus-Corona beer correlation.

Corona Beer Change Brand Name Odds

In my eyes, this is 100% a ‘No’. We’re talking about a beer that has been brewed since 1925 and has built up one of the biggest and best brand names in the industry. To change the name due to a six-month pandemic – say it even lasts two years – doesn’t make sense for a business that’s been using the same name for nearly a century.

To change the name would cost them billions in marketing and for the most part, nobody actually carries over the negative associations from coronavirus to Corona beer. On top of that, many people use the name COVID-19 – to be more technical – or ‘China Virus’ – to either be more derogatory or indicate where it came from.

Both of those further disassociate the pandemic from the beer. They won’t change their brand name.

Will Grupo Modelo Declare Bankruptcy Before 2021?

This also an absolute ‘No’. There is the small possibility that something else crazy happens but it won’t be as a result of the COVID-19 pandemic. Keep in mind that even with production shutdowns and severe slowdowns in sales, this is still a profitable company.

Also, their product, which is beer, tends to keep pretty well, so even if they aren’t selling the beers today, they should be able to store them and sell them later. It’s not as if the product is something perishable like milk, which could go bad and would have to be thrown away.

Grupo Modelo is a company that is usually in the range of $500 million a year in profits. I have a tough time seeing them go bankrupt from this, so I would bet on ‘No’.

InBev Stock Over-Under Odds

What Will Be The Price Of InBev Stock On April 30th At Close? Odds
Over 42 US Dollars -120
Under 42 US Dollars -120

Odds taken Apr. 6.

For this prop, I don’t have as strong of a read but I would probably bet the “Over”. We’ve had some good news about sports that it looks like we’ll start getting back to normal in June. With the state of New York seemingly (hopefully) just starting to flatten the curve, a return to normal in two months sounds reasonable.

Assuming other areas of the United States don’t have outbreaks that are nearly as bad, we should see them continue to climb with the rest of the stock market. It’s currently at $41.81 and that gives them plenty of time to get over $42.

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