Midday Market Minute: Are Beer Sales Tapped Out for 2013?

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Memorial Day weekend. That means parades, the beach, barbecues ... and beer. Or does it?

Beer-makers were hoping 2013 would be their year after several years of steady decline in beer consumption in the U.S. But it's not turning out that way.

In fact, it's been a pretty brutal year so far. Sales continue to limp along, hurt by a string of problems -- mainly the weak economy, the cold weather, and a long-term shift in consumer preference for wine and liquor.

The volume of beer sold domestically has dropped for three straight months, compared to last year.

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Analysts say consumers are increasingly likely to uncork a bottle of wine than to pop the cap on a bottle of beer. And it's the biggest names that are suffering the most: Anheuser-Busch InBev (BUD), SABMiller, Molson Coors Brewing (TAP) and Heineken.

Despite the sales weakness, the stocks of the beer makers have held up pretty well.

During the past year they've outperformed the market in general. Anhueser-Busch is up 39 percent, SAB Miller shares traded in London are up 45 percent and Molson Coors, up 30 percent.

In order to boost sales, the big beer makers are pushing out more upscale and pricier brews, including fruit and margarita flavored lagers.

Anhueser-Busch also rolled out a higher alcohol content brew, Budweiser Black Crown, in January. It also offer Bud Light Platinum. Both cost about a third more than regular beers.

Anhueser-Busch controls five of the world's top six brands, including the recently acquired Corona.

If there's a bright spot in the industry, it's smaller brewers such as Boston Beer (SAM) -- which makes Samuel Adams -- and craft beers.

Boston Beer's chairman recently told analysts that he expects 800 new craft brews to debut this year. That will bring the total to more than 2,500.

According to CNNMoney, craft beer sales have grown 15 percent over the past year -- but they still account for less than 10 percent of total beer sales.

The Memorial Day weekend can account for five percent of annual beer sales. But there's rain in the forecast for many parts of the country, so the summer season may get off to flat start.

-Produced by Drew Trachtenberg

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Midday Market Minute: Are Beer Sales Tapped Out for 2013?
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