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TheStreet Open House

Why the Official Beer Of Saint Patrick's Day Isn't What You Think

NEW YORK -- ( MainStreet) -- A green beer can or some food coloring in a yellow lager doesn't make a beer the official beer of Saint Patrick's Day, but apparently neither does a strong Irish heritage.

With all due respect to Guinness and its British parent company Diageo (DEO), the amount of bubbly, dry stout poured in the U.S. around Saint Patrick's Day still pales in comparison with the pints of paler competitors doled out during the holiday. Back in 2010, Diageo Guinness and its Guinness and Smithwicks brands produced 2.7 million barrels for U.S. consumption. That was a nearly 4% improvement from the year before, but still only a little more than 1% of total U.S. market share.

Guinness is growing in the U.S., but Bud and Heineken are squeezing its Saint Patrick's Day presence.

Compare that with big beer producer Anheuser-Busch InBev (BUD), which flooded the North American market with 29.7 million barrels of Budweiser, Bud Light and other products in the first quarter of last year alone. Molson Coors' (TAP) MillerCoors, meanwhile, sent 14.8 million barrels of Coors, Coors Light and Killian's Irish Red to bars, pubs and packaged-goods stores across the country in first-quarter 2011. That represented a year-over-year decline for both companies even as U.S. Guinness sales for last year increased 3%, but is indicative of how all beer makers tend to scrape by around this time of year.

The Treasury Department's Alcohol and Tobacco Tax and Trade Bureau finds that the early winter months tend to be a down time for beer production, just before the ramp-up to summer's peak beer sales. Around 17 million barrels are produced in March, compared with the more than 18 million typically produced in May, June and July. Last March, however, the 17.7 million barrels that made their way to revelers were the most the beer industry had produced in March since it rolled out nearly 18 million back in March 2006. It was also one of the high points for beer makers all of last year, as it failed to reach that mark in May, July and August and broke 18 million barrels only once, in June.

That March madness and a 2% overall hike in U.S. beer sales last year (to nearly $99 billion) have formed a line at the keg for breweries seeking their share of the Saint Patrick's Day take, according to beer industry group The Beer Institute. With A-B posting a 3.1% decline in North American production last year and MillerCoors' U.S. volume dropping more than 2.7% during the same span, the biggest competition for America's beer money is coming from other sources. Part of the reason the production calendar evened out a bit last year is that more Americans are opting for craft beer, which saw 15% sales growth in the first half of 2011 alone and watched brewery numbers soar from 1,753 in 2010 to more than 1,900 last year, according to the Brewers Association.

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