Budweiser tries to reverse long-term slump with Virginia-brewed 'craft' beer

Budweiser is known as a St. Louis beer. But starting October 29, there’ll be a Bud brew that comes from Virginia, the Richmond Times Dispatch reported today.

Craft-style beer is one of two new marketing tactics Budwesier is trying in an attempt to recapture a lost generation of beer drinkers and reverse a consecutive quarter-century of slumping sales.

One tactic was a Labor Day weekend music festival in Philadelphia kicking off a television campaign featuring hip-hop star Jay-Z.

The other was Project 12.

You might think the name comes from the fact that only one beer of every twelve sold today is a Budweiser (compared to one of every four in 1988).

But what it really comes from is a brewing contest. The brand commissioned its twelve brewmasters to create new (to Budweiser) craft-type beers. Taste-testing by 10,000 attendees at the Philadelphia event narrowed the dozen down to three, which are being combined into twelve-packs, to go on sale starting October 29, with a “craft” beer from Virginia in them.

If you can’t beat ’em, join ’em

While Budweiser sales have been slumping, the rest of the industry hasn’t been doing so hot either.

While Budweiser deliriously celebrated the fact that 2011, which saw a sales loss of 4.4%, was their best year in a quarter-century, the industry as a whole was down 1%, representing more than $1 billion in lost sales, as total beer consumption continued to decline.

Craft beers have been the industry’s one bright spot, albeit a small one.

Over the first half of this year, craft brewers’ sales increased 12% in volume and 14% in dollars (reflecting higher pricing).

Of course, craft brewers comprise only 5% of the total industry. Their sales of $9 billion and about 11.5 million barrels sounds impressive. But compared with the overall industry’s $96 billion and almost 200 million barrels in sales last year, it’s more like a drop in the beer barrel.

Named for ZIP codes

Budweiser’s three new craft-style beers will be named for their ZIP codes of origin.

Batch No. 91406, from Los Angeles, is deep-amber lager with 6% alcohol by volume (ABV).

Batch No. 63118, from St. Louis, is deep-golden pilsner, also with 6% ABV.

The third batch, No. 23185, a less alcoholic and apparently more adventurous brew, is a 5.5% ABV bourbon cask lager from Williamsburg, Virginia. Well, mostly from Williamsburg.

Williamsburg brewmaster Daniel Westmoreland developed it in conjunction with colleagues Mike Anderson in Jacksonville and Dan Kahn in Cartersville, Georgia.

“We took staves from fresh bourbon barrels and we aged the beer on those staves and spiced it with a hint of vanilla,” said Westmoreland. “It’s an all-malt brew, and it has a perfect color that is similar to the color of bourbon itself.”

Sincere flattery?

Westmoreland denied that the Project 12 beers were trying to compete with craft brews.

But they’re certainly trying to woo at least some craft beer drinkers over to Bud.

And in one respect, at least, they’re imitating craft brews’ pretentiousness. Each twelve-pack will include a tasting guide, tasting notes and details about each beer for earnest, oenophile-like discussions at home tastings.

Of course, what works for limited-edition and seasonal craft brewers won’t necessarily work for the industry’s shrinking giants, but that’s not stopping Bud from trying.

America’s more than 2,125 craft breweries from sea to shining sea have every right to feel sincerely flattered.