About the Beer Purchasers' Index (BPI)
By: Lester Jones, NBWA Vice President, Analytics and Chief Economist
The NBWA Beer Purchasers’ Index (BPI) is an informal monthly statistical release giving distributors a timely and reliable indicator of industry beer purchasing activity. BPI is the only forward-looking indicator for the industry to measure expected beer demand (one month forward) in the marketplace. Similar to the widely recognized Purchasing Managers’ Index, the BPI is a net-rising index and a leading indicator of industry performance based on survey responses from participating beer purchasers. The index surveys beer distributors’ purchases across different segments and compares them to that of previous years' purchases. A reading greater than 50 indicates the segment is expanding, while a reading below 50 indicates the segment is contracting.
The latest data:
The June 2022 BPI results show the total beer index at 46 and “at-risk" inventory at 47, indicating a break in the pattern after the 50+ readings experienced previously this year. Continued inflationary pressures, extreme heat, rising interest rates and recession fears, coupled with slower-than-expected sales in May, bring the industry to a pause after five months of positive ordering trends. When looking at the comparison month of June 2021, it is worth noting that the industry was experiencing an extraordinary period of recovery for on-premise retail. The June 2022 results show a shift to a slightly more pessimistic sentiment compared to the previous two quarters of this year. However, leaner inventories, reflected in the below 50 "at-risk" inventory measure, are a positive signal for the industry as it manages through unprecedented heat waves, price increases, uncertainty around consumer demand and the general economy.
Looking across the segments for June:
- The imports index stands as the only beer segment in expansion territory with a reading of 61 in June 2022, but it is 10 points lower than the June 2021 reading of 71.
- The craft index at 33 is well below the June 2021 reading of 53. Craft continues to struggle as on-premise retailers are not rebuilding draft beer with the same number of tap handles as before.
- The premium lights index posted a reading of 44, which is well below the June 2021 reading of 59. However, it is more in line with recent 2022 trends.
- The premium regular segment index is at 36, below the June 2021 reading of 40.
- The below premium segment is at 42, which is significantly higher than the June 2021 reading of 35. This is the only segment to see an increase year-over-year.
- The FMB/seltzer index took another big hit, falling to 36 in June 2022 from the June 2021 reading of 69.
- Finally, the cider segment remains below 50, with the June 2022 results at 30 compared to June 2021's reading of 40.
Beer Distributors: Please sign up to participate and receive the first and only advance notice of expectations for increasing or decreasing sales. Complete the form below using your company’s primary beer purchaser’s contact information. For additional information, please email bpi@nbwa.org.