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Bad buzz for brewers as light beer sales slip

Egor Mopanko | E+ | Getty Images

These are heavy days for light beer makers.

Bad spring weather and a sluggish economy have been cited by brewers such as Anheuser-Busch and MillerCoors as reasons for the recent poor sales of some of their flagship light beer brands. But a couple of new surveys might give greater cause for concern: consumers may just be growing tired of the taste of light beer and moving on to wine or spirits.

According to a survey by Consumer Edge Insight, beer consumers appear to be shifting away from the premium light segment. That's more bad news for the beer industry, given the dominance of light beer in the marketplace. The top two best-selling beer brands, Bud Light and Coors Light, together have about a 27 percent share of the market.

The main reason for the shift? Twenty-seven percent of the respondents said: they are "getting tired of the taste."

Ouch.

The second most popular reason won't make macrobrewers feel much better, with 21 percent saying they are "consuming more of other types of beer." An additional 20 percent said they were drinking less premium light beer to "save money."

And then there is the 17 percent, who said they were consuming other types of alcohol—that's bad news for the entire beer category.

Any way you look at the Consumer Edge Survey, it's bad news for light beer:

  • Age: Among younger drinkers, aged 21-27 years old, 40 percent say they are getting tired of the taste of premium lights.
  • Demographics: In the fast growing Hispanic demographic, 39 percent say they are tired of the taste.
  • Brand: 28 percent named a premium light brand as their favorite, down from 32 percent in June 2012.
  • Perception: 37 percent are more likely to describe the premium light segment as "watery" in 2013 vs. 34 percent last year.

The man behind the survey said the research reveals some serious warning signs for the premium light segment.

(Read more: Toasting 125 with a 'brewer's dozen')

"After a long period when these domestic premium light brands dominated the U.S. beer industry, many beer drinkers, particularly younger ones, are finding that they prefer the stronger and more varied tastes of imports and craft beers instead," David Decker, president of Consumer Edge Insight, said in a press release. "This suggests that the recent weakness in share trends for the big premium light flagship brands is likely to continue."

Trouble brewing elsewhere, too

While the Consumer Edge Survey paints a not-so-pretty picture for the premium light beer segment, the annual Consumption Habits poll by Gallup also paints a grim picture for the beer industry.

Beer still takes the top spot as the preferred beverage among Americans who drink alcohol, at 36 percent compared to 35 percent for wine and 23 percent for liquor. But beer's current one-percentage point lead is long way from the 20-point advantage the beverage enjoyed at its height in 1992.

(Read more: Heineken: This round(trip ticket) is on us)

The Gallup poll also mirrors the concern that younger consumers are turning to other beverages besides beer. Forty-one percent of adults under the age of 30 surveyed said they drink beer most often, down from 71 percent in the early 1990's.

The polls may help tell a story, but the numbers that matter most are the sales figures and recently those haven't been kind to the big brewers either.

In its second-quarter earnings report, Anheuser-Busch reported a decline in U.S. sales volume of 2.8 percent. Still the brewer managed to offset that decline with higher prices (volume measures sales without the impact of currency and price changes). While Bud Light and Budweiser sales lagged, higher-priced brands such as Bud Light Platinum, Budweiser Black Crown and Bud Light Lime Lime-A-Rita did well.

It was a similar story for MillerCoors, the joint venture between SABMiller and Molson Coors Brewing, which reported U.S. domestic sales to retailers were down 4.4 percent in the second quarter.

MillerCoors premium light sales to retailers declined high-single digits in the quarter with Coors Light declining mid-single digits and Miller Lite declining high-single digits.

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Just like Anheuser-Busch, MillerCoors is also looking to grow its higher-priced brand portfolio. MillerCoors' above premium portfolio grew double digits in the last quarter driven by the success of new product offerings, including Redd's Apple Ale and Third Shift Amber Lager. Those more recent products are building on the success of established brands like Blue Moon and Leinenkugel's, whose Summer Shandy seasonal grew at a double-digit percentage rate.

Beer's continued bright spot: Craft

Craft beer continues to be a bright spot in the beer category, with the Brewers Association mid-year 2013 numbers showing a 15-percent dollar sales increase and 13-percent volume increase for craft brewers. Those numbers put the craft segment on pace for its fourth consecutive year of double-digit sales and volume growth.

But while craft continues to shine, it still has a long ways to go, making up only 6 percent of the overall beer market.

Light beer may be declining but it still rules the day, with four of the top five selling domestic beer brands in 2012 in the light beer category: Bud Light, Coors Light, Budweiser, Miller Lite and Natural Light.

-By CNBC's Tom Rotunno. Follow him on Twitter @TomRotunno.

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