How Budweiser Lost Millennials

A couple of decades ago, Budweiser, owned by ABInbev, was the best-selling beer in the United States, and the brand your snobby European relatives brought up when insulting American beer. But according to the The Wall Street Journal, Budweiser shipped only 16 million barrels in 2013, down from 30 million in 2003. And what's worse, the number doesn't figure to get better anytime soon. A stunning 44 percent of people aged 21 to 27 have apparently not attended a keg party never sipped an ice cold Bud.

Not every reason for this decline is Budweiser's fault. Americans are more health conscious. People drink more wine, mixed drinks, and spirits than before. But a bigger problem for Bud is the rise of "craft beers," defined as brews that make 6 million barrels or less each year. Once confined to specialty bars and festivals, craft beers can now be found just about anywhere. And taste-discerning Americans have responded: For the first time, the craft beer industry shipped more barrels of beer than Budweiser last year.

So how does the venerable Bud get back? Improve its quality? Lower prices? Nah. The company has decided that it's the advertising that needs to change. If you've watched an American sporting event over the last 25 years, you've surely noticed the Clydesdales, the massive white-legged horses pulling a cart of Budweiser, usually through the snow. But that long-running mascot apparently doesn't do it for Millennials. So Bud's going to change. According to the Journal:

This season Budweiser will air spots featuring people in their 20s looking directly into the camera and calling out friends’ names as a narrator asks “If you could grab a Bud with any of your friends these holidays, who would it be?”

Is this going to work? Slate's Jordan Weissman doesn't think so. Budweiser is a beer "without a purpose," he writes. "If you walk into a bar, there will almost always be a cheaper beer, a less caloric beer, and plenty of tastier beers on tap."

But Budweiser might find inspiration from another much-maligned beer: Pabst Blue Ribbon. For those of us pre-Millennials, PBR had pretty much the same reputation as Budweiser. It was cheap, ubiquitous, and perfectly mediocre. But over the last five years, Pabst has enjoyed a hipster-fueled revival, doubling in popularity between 2009 and 2012. C. Dean Metropolous & Co. bought Pabst–which also owns other low-end staples such as Old Milwaukee and Schlitz—for $250 million in 2010 and sold it this September for three times that amount.

How did Pabst become so popular? It's never had ads featuring hot young people shooting pool and having a great time in the bar. In fact, that's exactly why: It hardly advertised at all, according to Quartz.

"After observing the beer’s unexpected popularity in Portland, Oregon back in 2001, the company concluded that people were buying the beer because it wasn’t aggressively being pitched to them."

For a brand as large as Budweiser (it is the "King of Beers," after all), not advertising at all probably won't cut it as a strategy. But cynically pandering to Millennials—a generation too young to remember when bad beer was considered "normal"—isn't going to cut it, either.