Rising Into the Fall: A Dry and Hot September Pushes October 2015 Beer Purchasers' Index Higher | NBWA: America's Beer and Beverage Distributors

The NBWA Beer Purchasers’ Index (BPI) is set to establish itself as a leading indicator for the U.S. beer industry. After one full year of data collection, the BPI now has a year’s worth of monthly data for forecasting the volume demand in the industry.

At the heart of every beer distribution company, there is a beer purchaser tracking the flow of beer through the business. Each month, the magnitude of beer orders placed with suppliers represents the changes in inventories from the past month’s sales and expectations for sales in the coming month.  When beer purchasers from around the country report this information to NBWA for the Beer Purchasers’ Index, their collective reports provide valuable insights into upcoming expansions or contractions for industry volumes.

The NBWA Beer Purchasers’ Index is a survey-based composite diffusion index that creates a net rising/falling index reflecting overall purchasing activity. Reading the results are simple:

  • An index reading above 50 shows expanding purchasing activity.
  • An index reading below 50 shows contracting purchasing activity.

Collecting the data to create the index is easy, too. Each month, a short one-minute survey is sent to participating beer purchasers around the country who report if current month purchasers are higher, lower or about the same compared to the same month last year. The math for a net rising index follows:

  • BPI index = [(# increasing items) + 1/2*(# stable items)] / (# items) * 100

October 2015 BPI Results

With one of the hottest and driest Septembers on record since 2000 (see NOAA charts below), the industry overall saw an increase in beer purchases in October for the total beer category. A slight uptick in the total beer index from 52 to 54 suggests a very slight but still expanding industry in November.

Craft continues to dominate the segments, posting an index of 89, which is slightly below the 92 reading in October 2014. The import segment also continues to show expansion with an index of 67, significantly higher than its 58 reading in 2014. The premium light, premium regular and below premium segments all continue to struggle, experiencing a continued contraction in volumes and posting index readings well below 50. Finally, the FMB segment maintains a very slight expansionary index at 51, holding steady with its 2014 reading.

Participating in the NBWA BPI is easy and requires only a few minutes of your purchaser’s or inventory manager’s time each month. The detailed results of the BPI are reserved for participating members only and include economic insights with each report.

To sign up, please email BPI@nbwa.org or visit www.nbwa.org/bpi.

For additional information, please contact NBWA Chief Economist Lester Jones at ljones@nbwa.org.