Why Bud and Jay Z's 'Made in America' is Going to California

West Coast Venue Added to Two-Day Music Festival

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Budweiser's "Made in America" music festival is going bi-coastal, adding Los Angeles as a venue alongside Philadelphia.

Jay Z, L.A. Mayor Eric Garcetti and Bud's Brian Perkins

The addition of a West Coast city to the annual fest curated by Jay Z marks a significant expansion for the event, which will once again be held for two days on Labor Day weekend. Musical acts -- which in the past have included A-listers such as Beyonce -- have not been announced yet.

But the brewer is once again cranking up the hype surrounding the event, which typically gets significant ad and marketing support. Jay Z on Wednesday announced this year's plans at a press conference at Los Angeles City Hall alongside L.A. Mayor Eric Garcetti and Budweiser U.S. brand VP Brian Perkins.

The choice of L.A. as a second venue is revealing from a business perspective. The brewer faces deep challenges in the all-important California market, including competition from Mexican imports such as Corona and Modelo Especial, as well as a bevy of California-based craft beers.

The increased investment in the festival is also notable because it signals that A-B InBev plans to continue putting a big push on music-based marketing under its new lead marketing executive for the U.S, Jorn Socquet. Mr. Socquet earlier this year took over as U.S. marketing VP from the departing Paul Chibe, who oversaw Made in America's 2012 launch.

The lead marketing agency for Made in America is Translation with production handled by Live Nation. Proceeds benefit the United Way. The end-game for A-B InBev is marketing, and drawing a younger and more multicultural crowd to Budweiser.

The brand and brewer could use a boost in California. A-B controlled some 50% of the state's beer market 20 years ago, but has steadily lost share in recent years, falling another another 1 share point last year to 37.5%, according to Beer Marketer's Insights. That's far less than the brewer's 45.6% national share. By contrast, Constellation Brands -- which markets Corona and Modelo in the U.S. -- gained a full share point in the state and now has 13.8% share, according to Beer Marketer's.

A-B InBev is bringing the festival "right into one of the largest metropolitan areas where it's been vulnerable," said Benj Steinman, president of Beer Marketer's, who noted that California is home to some 400 craft brewers. "This is obviously an attempt to shore that up with a vehicle that A-B would say has a proven track record."

Much of California's beer market is driven by Hispanics, giving Constellation a natural edge with its Mexican imports. It's no surprise, then, that A-B InBev is planning to give the L.A. event a Hispanic feel. Mr. Perkins in an interview pointed to L.A.'s significant Hispanic population, saying, "we need to make this festival relevant to Hispanic culture."

The brewer is undecided about promoting Made in America with national TV ads, as it has done in the past with spots starring Jay Z.

But as always, the event will be promoted heavily in social media and with related events, Mr. Perkins said. The brewer will host "Made In America" parties in 30 cities in the weeks leading up to the event.

Last year, Beyonce co-headlined the Philadelphia show along with Nine Inch Nails. Made in America celebrates a "mash-up" of styles, ranging from hip-hop to rock to electronic dance music, Mr. Perkins said. Today, "people don't define themselves by music style. And that's an insight that I don't think other festivals have capitalized on," he said.

But the brewer might also have to deal with logistical issues in L.A., where it could draw as many as 50,000 people to the heart of downtown, according to the Los Angeles Times. The newspaper on Tuesday reported that L.A. Councilman Jose Huizar has warned that "street closures and beer sales could create a 'nightmare' for downtown residents."

Mr. Perkins pointed to Philadelphia, where he said officials are "delighted" with the event, which he said helps the local economy.

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