Corona Extra's formidable brand was built, in part, on crackerjack marketing campaigns equating the Mexican brew with tranquil vacations on pristine beaches.
But Corona's falling sales have some beer business watchers wondering if there's trouble in paradise.
A tough economy and intense competition are weighing on some of the higher-priced imports. Their future, and whether beer drinkers' habits have permanently changed, are being closely watched in the $26-billion-a-year industry.
It turns out that some higher-priced imports like Corona aren't as recession-resistant as the beer business generally. But Corona, by far the most popular U.S. import, faces more challenges than just the economy.
Craft beers are stealing business from major imports, while Corona also is under pressure from Anheuser-Busch's successful new Bud Light Lime, analysts say.
One noted beer stock analyst suggested the Corona brand has lost some luster, although others say it's too early to make that judgment.
The top executive of the Chicago company behind Corona's U.S. operations said he wasn't worried. "Our view is that [the brand] is as current as it's always been," said Bill Hackett, president of Crown Imports, which imports and markets Corona. "It works across all demographics and lifestyles."
Brewed by Mexico's Grupo Modelo, Corona Extra has been the nation's No. 1 imported beer since 1997, when it surpassed Heineken. "It's been the biggest success story in the high-end beer category in the last 30 years," said Harry Schuhmacher, publisher of the trade publication Beer Business Daily.
According to Beer Marketer's Insights, another trade publication, Corona Extra had a 28.4% share of the imported beer market in 2008, with Heineken in second at 17.8%.
Including domestic brews, Corona ranked sixth in 2008, outselling such cheaper beers as Busch, Michelob and Miller's High Life and Genuine Draft brands. Still, shipments of Corona Extra dropped 4.6% last year, the second consecutive annual decline, according to Beer Marketer's Insights. And its overall market share has slipped to 3.6% from 3.9% in 2006.
Corona's slide, coupled with a drop in Heineken shipments, pushed overall import sales -- as measured by cases of beer -- down 2.3% last year, according to market researcher Nielsen Co. In contrast, domestic beer sales overall were flat.
Part of the problem for Corona Extra was a price increase instituted in 2007, industry analysts say. Domestic brewers didn't raise prices until months later, leaving a larger-than-usual price gap just as the economy soured.
"The economic winds are clearly blowing right in their faces," said John Greening, a professor at Northwestern University's Kellogg School of Management and a beer advertising expert. As a consumer, "when I'm fearful, I'll buy what's good enough for right now," he said.
Indeed, although sales of craft beers like Sam Adams and Fat Tire grew a robust 8% last year, that was only half the rate of 2007, according to Nielsen.
Sales of craft beers, meanwhile, have upped the competition for imports. "We know there is a lot of interaction between craft and import brands, and we believe some of the import brands are losing to craft," said Nick Lake, a Nielsen vice president.
Then there's Bud Light Lime, which debuted in May and outsold Corona Light for the year, according to Beer Marketer's Insights.
The industry is known for fads -- remember "ice" beer? -- so it's too soon to know if Bud Light Lime has staying power. But some analysts say the brew has hurt Corona.
"Last summer, it certainly had an effect on Corona," Beer Business Daily's Schuhmacher said. "The drinker profile is similar to that of a Corona drinker."
Carlos Laboy, an analyst at Credit Suisse, indicated in a recent report that Corona may have an even bigger issue, saying the vaunted brand "really has life cycle issues."
In other words, Corona may be getting long in the tooth. Nielsen's Lake said he's not buying that notion. Nielsen regularly surveys consumers between ages 21 and 29, and asks them what brand first comes to mind when they think of imported beer.
"The No. 1 import brand they still brought up was Corona," Lake said.