Beer distributors report signs of normalcy (but craft dips into at-risk inventory)

After a dramatic year in 2020, the Beer Purchasers’ Index (BPI) for January 2021 continues to show signs of returning to normal, says the National Beer Wholesalers Association (NBWA). The total BPI for January 2021 is at 66.4, about where it was in January 2020 and before the pandemic at 65.7.

“A slower than expected December and healthy end-of-year shipments from suppliers significantly changed the industry’s inventory picture,” explained NBWA Chief Economist Lester Jones.

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 “at-risk inventory” (inventory at risk of going out of code in the next 30 days) measure rose to 37.9 from 25.9 in December 2020, the largest single-month increase since June 2020. 

Looking across the segments for January:

The index for imports remains in expansion territory with a reading of 59 in January 2021. However, it is still below the 64 reading from January 2020.

The craft index dropped to 43 in January 2021. This marks the second monthly reading below the critical 50 benchmark and two points below the January 2020 reading of 45.

Premium lights continue to post significantly higher readings at 59, relative to 38 in January 2020. This is the ninth consecutive month of above 50 readings for this segment.

The index for premium regular finally declined below the 50 benchmark to 48, compared to 27 in January 2020. This also breaks the segment’s eight month streak above 50 expansionary index readings.

Below premium beers also continue their rapid decline into the new year, sitting at 45 for January 2021. This series has declined each month after peaking at 70 in May 2020.

The FMB/seltzer segment continues to outperform all other segments, posting an index of 90 in January 2021, compared to 91 in January 2020.

The cider segment posted a reading of 35 in January 2021, well below last January’s reading of 42.