NBWA: ‘At-Risk’ Inventory Outpaces Ordering
Beer inventory in wholesalers’ warehouses is at risk of expiring in the next 30 days, according to the National Beer Wholesalers Association (NBWA) August edition of the Beer Purchasers’ Index (BPI).
This month’s BPI recorded a reading of 54 for “at risk” inventory – products within one month of their expiration date – which indicates that supply is expanding. A reading lower than 50 indicates contraction.
Overall beer recorded a reading of 46, implying that beer purchasers are ordering less beer than they have sitting in coolers and warehouses.
“This is an expected outcome as higher inventory levels are typically associated with lower orders,” NBWA chief economist Lester Jones wrote. “Continued inflationary pressures, extreme heat and a slowing economy bring the industry to a third month of pause after five months of positive ordering trends.”
Imports were the only segment to expand in August 2022 with a reading of 63, marking a three-point decline from August 2021.
Below premiums recorded a five-point increase to 42. While still in contraction territory, below premiums were the only segment to record year-over-year growth, and have now done so for three consecutive months.
The flavored malt beverage (FMB)/hard seltzer segment continued to cool off with a reading of 31, down from 58 in August 2021 and 92 in August 2020.
Craft declined by more than half from its August 2021 reading for 59, to 28 in August 2022.
Premium lights declined by 19 points year-over-year, to a reading of 38. Premium regulars recorded a reading of 33, down from 41 in August 2021.
Cider posted a reading of 26, down from 43 in August 2021.
BI: July Domestic Tax Paid Shipments Down -5.5%
U.S. beer shipments declined -5.5% in July 2022, to an estimated 13.7 million barrels, according to the Beer Institute (BI), citing the latest estimates of domestic tax paid beer shipments from the U.S. Department of Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB).
Year-to-date through July 2022, beer shipments in the U.S. have dropped -5.2%, to 95.3 million barrels, marking a decline of more than 5.2 million barrels compared to the 100.5 million barrels that were shipped in the same period last year.
Thus far in 2022, shipments increased in only one month compared to last year. U.S. brewers shipped +1.5% more beer in March 2022 than they did in March 2021, which was cycling March 2020, when millions of barrels of beer had been shipped in advance of St. Patrick’s Day celebrations and March Madness watch parties, only to sit in coolers and warehouses for months when the country shut down in the early weeks of the pandemic.
At -5.5%, July 2022 so far includes the steepest decline during the summer selling season, compared to May (-3.3%) and June (-3.6%).
August 2022 domestic tax paid estimates are scheduled to be shared on September 28.