Effect:
Turn water into beer.

Solution:
Take a pitcher or tumbler that you can't see through and place a cup full of beer at the bottom. Then push a sponge, bar rags, paper towels or any other absorbent material into the bottom surrounding the cup of beer. Make sure it's a tight enough fit to push the cup against the side of the pitcher so it won't fall out.

Tell your audience that you've run out of beer but you've learned how to make more. Fill a cup with water right in front of everybody. Pour the water into the pitcher. No one will see that you're pouring it onto a sponge and will just assume that you're filling an empty pitcher. In order to give the water enough time to soak into the sponge you should wave your hands over the pitcher and say some magic words or make up a story to go with the trick. Now all you have to do is tip the pitcher over an empty glass and pour the beer into it.