Inflationary pressures that tamped down orders in June are persisting into July, as total beer contracted for the second month in a row, according to the National Beer Wholesalers Association (NBWA), which released its monthly Beer Purchasers’ Index (BPI) today.
Overall beer recorded a reading of 46, repeating June’s reading, which “signals a break after the 50+ readings experienced previously this year,” NBWA chief economist Lester Jones wrote. A BPI reading less than 50 indicates contraction, while one of 50 or higher indicates expansion.
“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,” Jones wrote. “The July 2022 results show a shift to a more cautious sentiment for distributors.”
The beer category’s reading for “at-risk” inventory – product in danger of going out of code in the next 30 days – was also 46, which Jones called “positive signal for the industry as it manages through unprecedented heat waves, price increases, uncertainty around consumer demand and the general economy.”
Only two segments entered expansion territory: imports (67) and below premium (52). Imports increased 1 point above the July 2021 reading of 66, but below premium was “significantly higher” than July 2021 (30).
The flavored malt beverage (FMB) and hard seltzer segment saw the steepest decline, plummeting from 69 in July 2021 to 28 this month, the lowest reading this month.
At 29, cider recorded the second-lowest reading, nine points lower than its July 2021 reading of 38.
Craft beer declined 18 points from July 2021, to a reading of 32 this month.
“Craft continues to struggle as on-premise retailers are not rebuilding draft beer with the same number of tap handles as before,” Jones noted.
Premium lights recorded the third-highest reading after imports and below premium, although at 45 the segment remained in contraction. Its nine-point decline from July 2021 (56) “is more in line with recent 2022 trends,” Jones wrote.
Premium regular declined four points, to a reading of 36.