Gone are the days when American beer drinkers were fighting over what made Miller Lite more appealing -- the fact that it was less filling, or tasted great.

These days, an increasing number of American drinkers have been turning up their noses at light beer in just about every form. Although the top labels from Anheuser-Busch InBev (NYSE:BUD), Molson Coors Brewing Company (NYSE:TAP), and SABMiller still sit high on the list of the most-consumed beers in the U.S., just about every one has seen its volumes declining.

This is a problem that worries the megabrewers, and for good reason: Those popular light beers helped them dominate the market with just a few products for many years. And because light beer is, well... light, they dominated that market with beers that required a far cheaper bill of ingredients than the high-end craft beers they have been forced to compete with in recent years.

How concerned are the big brewers? AB InBev CEO Carlos Alves de Brito says that growing the Bud Light brand -- the light-beer leader -- is the company's No. 1 priority in the U.S. Meanwhile, MillerCoors, which laid off 2% of its workforce in a recent cost-cutting move, said it plans to plow money from those savings into "increased brand investment moving forward, particularly on our premium lights."

Let's take a quick look at how the top U.S. light beers fared over the past few years in terms of volume (in millions of barrels):

Beer

2010

2011

2012

Gain/Loss

Bud Light

40.6

39.9

39.7

(2.2%)

Coors Light

18.1

18.2

18.7

3.3%

Miller Lite

15.9

15.2

14.7

(7.6%)

Natural Light

9.0

8.3

7.9

(12.2%)

Keystone Light

4.7

4.5

4.2

(10.6%)

U.S. Beer Market

213.2

210.7

213.8

0.2%

Source: Beer Marketing Insights

Coors Light was the only winner in the bunch, and its sales turned down, too, in 2013. Volumes of the Silver Bullet were down in the low-single digits during the last quarter, MillerCoors reported.

Losing share, looking for reasons
Domestic light beers still own a combined 51% of the U.S. market. But craft beer, growing at an annual clip around 15%, has been cutting into some of that dominance every year, winning over beer drinkers with a wide array of beer styles, including many that serve as great conversion beers -- those that win over Bud, Miller, and Coors drinkers, as well as non-beer drinkers.

Craft Brew Alliance (NASDAQ:BREW) sees two of its labels -- Redhook and Kona -- as keenly positioned to win drinkers from the megabrewers' light and premium brands. Those labels grew sales by 20% and 26%, respectively, in the last quarter. President Andy Thomas attributed that, in part, to the company's focus on the "crossover" drinker.

"We know the crossover drinker, I think, better than anybody," Thomas told analysts.

Some analysts have speculated that light beers are not selling as well because a key part of their target demographic -- younger men -- has been faced with high unemployment. If that were the case, however, we'd have have likely seen a trade-down from the premium lights like Bud Light and Coors Light to the cheaper light beers, like Natural Light, Busch Light, and Keystone Light. Instead, those lower-end light beers saw the biggest declines of the group, suggesting there's something else at work here.

A survey of drinkers this summer by Consumer Edge Insight showed that "getting tired of the taste" was the No. 1 reason why former light beer drinkers were switching to other libations. Nearly half of the respondents cited some form of a trade-off to other adult beverages.

Craft beer is stealing drinkers away. But there's more than that. Ciders, alcoholic teas, wine, and flavored spirits are all drawing away light beer drinkers.

Doubling down
AB InBev and MillerCoors both plan a bigger push of their flagship light lagers. MillerCoors executives say they have more marketing in store, and will bring back the original Miller Lite can in 2014, looking to target millennial-generation drinkers.

AB InBev is also planning "major package innovation" in 25-ounce and 16-ounce cans of Bud Light, as well as a major marketing effort aimed at younger drinkers next year. "It's our top priority in the U.S.," CEO Brito said.

But will that be enough? The trend away from light beer has been been strong and shows no signs of abating. Whats more, the market continues to see new entries that compete for drinkers, including those craft-style brews and ciders coming from the megabrewers themselves.

Investors will want to watch to see if these increased marketing efforts are paying off. If the trade-off for flavor continues, the big brewers may need to rethink their strategies and focus on their growing American labels.



John-Erik Koslosky has no position in any stocks mentioned. The Motley Fool recommends Molson Coors Brewing Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.