New year, same pessimistic outlook from beer distributors

Just before the ball dropped, the National Beer Wholesalers Association (NBWA) dropped its Beer Purchasers’ Index (BPI) for December 2022, which continued to, well, drop. Remember, the BPI is the only forward-looking indicator for distributors to measure expected beer demand. Not only did the entire country set a new low-temperature record in December, but the BPI recorded its lowest index reading.

The December BPI shows a reading of 30, and the “at-risk” inventory index of 51 marks a very pessimistic outlook for January 2023. A reading greater than 50 indicates the segment is expanding, while a reading below 50 indicates the segment is contracting.

The craft index is at a freaking 24, which is well below the December 2021 reading of 60. This is its most significant low since 2015.

“The industry’s narrative has not changed much since June 2022,” the NBWA noted. “The purchasing behavior of the industry is best described as slow and cautious in the face of changing retailer and consumer demand, which is an appropriate outlook and strategy for distributors heading into 2023.”

The imports index is the only segment pointing to expanding volumes, with a reading of 54 in December, which is 19 points lower than the December 2021 reading of 74. While still above 50, the import segment has consistently trended lower month over month in 2022.

The premium lights index posted a reading of 31, which is also below the December 2021 reading of 65. The premium regular segment index is at 28, below the December 2021 reading of 51. The below premium segment sits at 42, four points higher than the December 2021 reading of 38 and it continues to be the only segment to report a higher reading compared to the year 2021.

The FMB/seltzer segment continues to contract, falling to 26 in December compared to the December 2021 reading of 36. Finally, the cider segment reports a 26 reading, compared to a December 2021 reading of 45.