How did inflation, heat and the economy influence beer purchasing in July?

The National Beer Wholesalers Association (NBWA) Beer Purchasers’ Index (BPI) for July 2022 puts the total beer index at 46 and “at-risk” inventory at 46. A repeat of June results signals a break after the 50+ readings experienced previously this year.

Continued inflationary pressures, extreme heat and a slowing economy bring the industry to a second month of pause after five months of positive ordering trends.

Reminder: BPI is the only forward-looking indicator for distributors to measure expected beer demand. The index surveys beer distributors’ purchases across different segments and compares them to previous years. A reading greater than 50 indicates the segment is expanding, while a reading below 50 indicates the segment is contracting.

The July 2022 results show a shift to a more cautious sentiment for distributor. 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 July:

The imports index stands as the only beer segment in expansion territory with a reading of 67 in July 2022, about the same reading as the July 2021 reading of 66.

The craft index at 32 is well below the July 2021 reading of 50. 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 45, below the July 2021 reading of 56. However, it is more in line with recent 2022 trends.

The premium regular segment index is at 36, below the July 2021 reading of 40.

The below premium segment is at 52, which is significantly higher than the July 2021 reading of 30. For a second month, this is the only segment to see an increase year-over-year.

The FMB/seltzer index took another big hit, falling to 28 in July 2022 from the July 2021 reading of 69.

Finally, the cider segment remains below 50, with the July 2022 results at 29 compared to July 2021’s reading of 38.