Hotdogs on an outdoor grill (© Lauri Patterson-E+-Getty Images)
Take a good, long look at your Fourth of July menu. Are hot dogs on it?

We don't mean rabbit sausage served with melted brie, and we don't a mean meat-free hot-dog-shaped vegetarian options. We mean the more standard definition of the term. If the answer is anything resembling "no," you're the reason the hot dog is dying.

Bloomberg Businessweek decided to throw a big bucket of ice water over everybody's Fourth of July fireworks by illustrating the sad state of the hot dog, which was once a staple on the grill. While Americans spent $1.7 billion on hot dogs last year at supermarkets alone and are expected to down 150 million of them this Fourth of July, marketing firm Symphony IRI found that hot dog sales dropped more than 3% in 2012 from 2011. That's after two consecutive years of smaller declines.

So what's putting the kibosh on the hot dog? "Higher raw-material costs" and "higher retail price points," according to the National Hot Dog & Sausage Council trade group. "The rising costs of goods, especially beef prices," said the folks at Hebrew National, whose all-beef hot dog sales are down 5% this year from last.

The bigger issue, however, is changing tastes. Hot dog hotspots such as Hot Doug's in Chicago and Bark in Brooklyn don't shy away from traditional dogs, but they aren't shy about making field-grain-and-pota​to veggie dogs basting in lard and butter or about stuffing casings full of wild boar, baked ham or duck. When your target audience has been raised on curries, chilis and sriracha sauce, a dog with yellow mustard, some kraut and some token onions seems just a bit bland by comparison.

That said, not every hot dog maker is suffering. Sales at Nathan's Famous (NATH) are up by 17% from last year despite Superstorm Sandy's toll on the chain's flagship Coney Island location. Nathan's annual Fourth of July hot-dog-eating contest is still on, however, even though company execs said there's more to selling dogs these days than just lining up competitors and letting them stuff their faces.

"In tough times, if people are going to eat fewer hot dogs, they often choose a premium product," Nathan's President Wayne Norbitz told Bloomberg. "They choose to indulge."

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