CPG Terms Explained, a series by Cyril Ovely
August 2026
CPG Glossary A-Z: The Complete Index of Consumer Packaged Goods Terms
Over 200 CPG and FMCG terms defined and organized alphabetically. Terms with an Article badge have a dedicated deep dive. All terms include context on how they're used across different markets.
190+
Terms Defined
45
Deep Dive Articles
7
Functional Areas
5
Regions Covered
Tier 1: Full article available (click to read)
Tier 2: Defined in pillar context
Tier 3: Brief definition
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A
A measure of a retail store's total sales across all product categories, used as a weighting factor to determine true distribution reach.
ACV Distribution % Article
The percentage of total market sales volume occurring in stores carrying your product, weighted by each store's total sales.
Activation Tier 2
The process of converting a listed store into an actively ordering store. Also refers to in store promotional events that drive shopper engagement.
Activation Rate Tier 2
The percentage of outlets that actively sell your product versus the total number that received initial distribution.
Advertising Allowance Tier 3
A payment from manufacturer to retailer to support advertising of the manufacturer's products in the retailer's media.
AIC (Average Items Carried) Tier 2
The average number of SKUs a retailer stocks from a brand or category. Measures distribution depth.
AIS (Average Items Selling) Tier 3
Similar to AIC but measures items actually scanning at POS, not just listed. Reveals the gap between listing and actual sales.
AOC (All Outlet Combined) Tier 2 US
A Nielsen market definition that includes all retail outlets measured in a given market area.
Assortment Architecture Tier 2
The structured design of a product range to meet shopper needs across different channels and occasions.
Attribute (Product Attribute) Tier 3
A characteristic of a product such as flavor, size, packaging type, or dietary claim that differentiates it within a range.
Average Retail Price (ARP) Tier 2
The weighted average price at which a product sells across all outlets, accounting for promotional and regular pricing.
AWOP (Allowance Without Purchase) Tier 3 NZ/AU
A promotional allowance given to a retailer without requiring a specific purchase commitment. Common in NZ/AU grocery.
B
Baseline Sales Article
The volume a product sells without any promotional support, representing organic demand independent of price cuts or displays.
Back Stock Tier 3
Inventory stored in the store's backroom, not yet on the shelf. Excessive back stock often indicates replenishment failures.
Backorder Tier 3
An order for a product that is currently out of stock but will be fulfilled when inventory becomes available.
Backroom-to-Shelf Time Tier 3
The time elapsed between product arrival in the store's backroom and its placement on the selling shelf.
Base Price Tier 3
The regular selling price of a product before any temporary promotions or discounts are applied.
Base Weighted Weeks (BWW) Tier 3
The number of non-promoted weeks used to calculate baseline sales in syndicated data analysis.
Basket Size Tier 2
The average number of items or total spend per shopping trip. A key shopper behavior metric.
BBD (Best Before Date) Tier 3
The date until which a product retains its expected quality. Distinct from use-by dates which relate to safety.
Bill Back Tier 3
A trade promotion mechanism where the retailer pays full price initially and receives a credit after proving promotional performance.
BOGO (Buy One Get One) Tier 2 US
A promotional offer where purchasing one item entitles the shopper to a second item free or at a discount.
BOPIS (Buy Online Pick Up In Store) Tier 2 US
An omnichannel fulfillment method where shoppers order online and collect their purchase at a physical store.
Brand Block Tier 2
A shelf layout strategy where all SKUs of a single brand are grouped together in a contiguous section.
Brand Equity Tier 2
The commercial value a brand derives from shopper perception, loyalty, and association beyond the functional benefits of the product.
Buy Rate Tier 3
The percentage of shoppers exposed to a promotion who actually purchase the promoted product.
Beat Plan Article
The planned route and schedule for field sales reps visiting retail stores. Used primarily in India and South Asia.
C
Cannibalization Tier 2
When a promotion or new product diverts sales from the same brand's other SKUs rather than generating truly incremental volume.
Category Management Article
The process of managing product categories as strategic business units using data driven insights to optimize range, pricing, and shelf placement.
Category Captain Tier 2
A brand appointed by a retailer to advise on category strategy, shelf layout, and range optimization for a specific category.
Category Review Tier 2
A periodic assessment by a retailer of which products stay in the range, which get delisted, and what new products are added.
Case Stack Tier 3
A secondary display formed by stacking product cases, typically used in high-volume or warehouse-style retail environments.
Click & Collect Tier 2 UK/AU
The UK/AU equivalent of BOPIS. Shoppers order online and collect from a store or designated pickup point.
Claims Tier 3
Requests from retailers to manufacturers for payment against agreed trade terms, often related to promotional performance or delivery failures.
Compliance Rate Tier 2
The percentage of stores where execution (planogram, pricing, display) matches the agreed standard.
Consumer Promotion Tier 2
Promotional activities directed at the end shopper (coupons, samples, contests) rather than at the retailer.
Conversion Funnel Tier 2
The stages a shopper passes through from product discovery to purchase on an e commerce platform.
Coverage Model Tier 2
The framework defining how sales territories and retail accounts are assigned to field sales personnel.
CPFR (Collaborative Planning, Forecasting and Replenishment) Tier 3
A supply chain approach where manufacturers and retailers share data to improve forecast accuracy and inventory management.
Cross-Merchandising Tier 2
Placing complementary products from different categories together to drive incremental purchases (e.g., chips next to salsa).
CTR (Click-Through Rate) Tier 3
The percentage of users who click on a product listing or advertisement after seeing it. A digital shelf performance metric.
Cut In Tier 3
The process of inserting a new product into an existing planogram, often requiring displacement of current products.
Cume Weighted Weeks (CWW) Tier 3
The cumulative number of weighted weeks used in period-based sales analysis across multiple time periods.
The total direct cost of producing a product including raw materials, packaging, labor, and factory overhead.
D
DC (Distribution Center) Tier 2
A centralized warehouse facility that receives, stores, and redistributes products to retail stores.
Decomposition Tree Tier 3
A visual breakdown of sales volume into its component parts: baseline, incremental, and various promotional effects.
Deductions Tier 3
Amounts subtracted from manufacturer payments by retailers, typically for delivery failures, promotional discrepancies, or administrative errors.
Depth Pack Tier 2
A pack configuration containing multiple units of a single SKU, designed for high-velocity items.
DIFOT (Delivered In Full On Time) Tier 2 NZ/AU
The NZ/AU equivalent of OTIF. Measures whether deliveries arrive complete and on the agreed date.
Display Tier 2
Any secondary merchandising placement beyond the regular shelf position, including end caps, dump bins, and floor stands.
Distributor Management Tier 2
Systems and processes for selecting, training, motivating, and evaluating distribution partners in indirect route to market models.
Distribution Network Design Tier 2
The strategic design of warehouse locations, delivery routes, and service areas to optimize cost and coverage.
Dollar Sales Tier 2
Sales measured in currency value rather than units. Used alongside unit sales to understand price and mix effects.
A distribution model where manufacturers deliver directly to individual stores using their own trucks, bypassing distribution centers.
A model where manufacturers sell directly to end shoppers through their own channels, bypassing retail intermediaries.
Digital Shelf Article
The online equivalent of the physical retail shelf: product listings, search results, and detail pages on e commerce platforms.
E
EDI (Electronic Data Interchange) Tier 2
The standardized electronic exchange of business documents (purchase orders, invoices, ASNs) between trading partners.
A pricing strategy where retailers offer consistently low prices every day instead of frequent temporary promotions.
Endless Aisle Tier 2
An in store digital kiosk or app that lets shoppers order products not physically stocked in the store, shipped to home or store for pickup.
End Cap Article
A promotional display at the end of a retail aisle, one of the highest visibility positions in a store.
Equivalized (EQ) Sales Tier 2
Sales data normalized to a common unit of measure to allow comparison across different pack sizes.
E-Tailing (Electronic Retailing) Tier 3
The sale of retail goods through electronic channels, primarily e commerce websites and apps.
F
Facing Tier 2
A single unit of a product visible on the front of the shelf. Multiple facings increase visibility and perceived importance.
F&D (Feature and Display) Tier 3 US
A US retail term for promotional placements including feature ads and display positions like end caps and dump bins.
FDM (Food/Drug/Mass) Tier 2 US
A Nielsen channel definition covering food supermarkets, drug stores, and mass merchandise retailers.
FDMx Tier 3 US
Extended Food/Drug/Mass including additional outlet types like military commissaries and club stores.
Fill Rate Tier 2
The percentage of ordered units actually delivered. A key supply chain performance metric.
FIS (Free Into Store) Tier 3
A pricing term where the supplier bears all costs of delivering goods to the retailer's store, including freight.
FOB (Free On Board) Tier 2
A shipping term defining when ownership and risk transfer from seller to buyer. FOB origin means buyer assumes risk at the shipping point.
FOBL (Free On Board Landed) Tier 3 NZ/AU
A NZ/AU pricing term where the supplier bears all costs including freight and landing charges to the retailer's DC.
Forecast Accuracy Tier 2
The degree to which a demand forecast matches actual sales. Measured as MAPE, bias, or forecast attainment percentage.
Freshness Tier 3
A product quality attribute related to shelf life remaining. Critical for perishable categories and a key factor in stock rotation.
Products that sell quickly at relatively low cost. The terms FMCG and CPG refer to the same products; FMCG is used outside the US.
G
Go to Market Strategy (GTM) Tier 2
A comprehensive plan for how a company reaches customers through channel selection, pricing, distribution, and sales force design.
Golden Triangle Tier 3 UK
The area between a store's entrance, the dairy/meat section, and the checkout. The highest traffic zone in a supermarket.
The profit remaining after subtracting COGS from revenue, expressed as a percentage. The first measure of CPG profitability.
GTIN (Global Trade Item Number) Article
The globally standardized numeric identifier printed as a barcode on every product, enabling POS scanning and supply chain tracking.
H
High-Low Pricing Tier 2
A pricing strategy alternating between regular high prices and frequent promotional discounts. The opposite of EDLP.
Horizontal Display Tier 2
A shelf layout where products are arranged in horizontal rows rather than vertical brand blocks.
Hot Zones Tier 2
Areas of a store with the highest shopper traffic and visibility. Prime locations for promotional displays.
Household Penetration Tier 2
The percentage of households in a market that purchase a brand or category at least once in a given period.
I
Incremental Revenue Article
The additional sales generated by a promotional activity above what would have been sold at baseline.
Island Display Tier 3
A freestanding display positioned in an aisle or open floor area, visible from multiple directions.
J
The annual strategic planning process between a CPG brand and retailer, aligning on growth targets, trade investment, and innovation.
K
KAM (Key Account Manager) Tier 3
The sales professional responsible for managing the relationship between a CPG brand and its key retail accounts.
Kirana Tier 3 India
A small, independently owned neighborhood grocery store in India, the backbone of traditional trade. Millions of kirana stores account for the large majority of Indian FMCG sales.
L
Landed Cost Tier 2
The total cost of a product including manufacturing, freight, duties, and all costs to deliver it to the retailer's door.
LBD (Last Buy Date) Tier 3
The final date by which a product can be ordered from the supplier before discontinuation or delisting.
Lead Time Tier 2
The time between placing an order and receiving the delivery. A key factor in inventory planning and service levels.
Line Extension Tier 2
A new product variant (flavor, size, format) added to an existing brand's range, leveraging the established brand equity.
List Price Tier 3
The manufacturer's suggested retail price before any trade discounts, promotions, or negotiated reductions.
Loss Leader Tier 2
A product sold at a price below its cost to attract shoppers into the store, with the expectation they will buy other items.
M
Mandated / Mandate Tier 3
A retailer requirement that a brand must comply with, such as specific delivery windows, packaging standards, or EDI capabilities.
Market Share Article
A brand's sales as a percentage of total category sales. The fundamental measure of competitive position.
Merchandising Condition Tier 3
The agreed standards for how products should be displayed, priced, and promoted at the point of sale.
MOQ (Minimum Order Quantity) Tier 2
The smallest quantity of a product a supplier will sell in a single order. Common in distributor and wholesale relationships.
MULO (Multi Outlet) Tier 3 US
A Circana (formerly IRI) channel definition covering multiple retail outlet types combined into a single reporting segment.
MULO-C Tier 3 US
A variant of the MULO definition including convenience stores in the multi-outlet reporting segment.
Must-Win Battles Tier 3
A strategic framework identifying the few critical priorities (markets, segments, capabilities) that will drive disproportionate growth.
Mystery Buyer / Mystery Shopping Tier 3
A research method where trained evaluators pose as shoppers to assess store execution, service quality, and compliance.
Modern Trade Article
Organized retail formats such as supermarkets, hypermarkets, and chains with centralized purchasing and standardized operations.
N
National Distribution Tier 2
Distribution coverage measured across an entire country rather than specific regions or retail chains.
Net Revenue Management (NRM) Tier 2
A discipline focused on optimizing the full price waterfall from list price to net realization, including trade spend and mix.
Nielsen (NielsenIQ) Article
The leading provider of CPG retail measurement data, providing syndicated scanner data for market share, distribution, and promotion analysis.
NPD (New Product Development) Tier 2
The process of creating and launching new products, from concept through development, testing, and commercial launch.
The percentage of stores in a market that carry your product. The simplest but most misleading distribution measure.
O
Off Invoice (OI) Tier 2
A trade promotion mechanism where a discount is applied directly to the invoice, reducing the price the retailer pays.
Omnichannel Strategy Tier 2
An integrated approach to selling across physical stores, e commerce, marketplaces, and quick commerce with a consistent shopper experience.
Online Product Content Tier 2
The images, titles, descriptions, attributes, and enhanced content that represent a product on e commerce platforms.
Measures whether products are physically present on the shelf and available for purchase. The positive framing of Out of Stock.
When a product is unavailable on the shelf for a shopper to purchase. One of the most costly problems in retail.
OTIF (On Time In Full) Article
Measures whether deliveries arrive completely and on the agreed date. The primary supply chain metric between manufacturers and retailers.
Outlet Segmentation Tier 2
Classifying retail outlets by size, location, shopper profile, and sales potential to assign appropriate service levels.
Outlet Universe Tier 2
The total number of potential retail outlets in a market. The starting point for coverage planning and white space analysis.
P
Pallet Display Tier 3
A full pallet of product placed on the sales floor as a high-volume display, common in warehouse clubs and bulk retailers.
Penetration Tier 2
The percentage of shoppers or households that purchase a brand or category at least once in a given period.
Perfect Store Article
A framework defining ideal in store execution by combining availability, visibility, promotion, and pricing into one composite score.
Phantom Inventory Tier 2
When the system shows stock available but the product is not physically on the shelf. A major cause of false out of stocks.
Picture of Success (PicoS) Tier 2
A visual standard showing the ideal shelf layout, stock levels, and promotional setup for a store or channel.
A detailed visual diagram specifying exactly how and where products should be placed on retail shelves.
Point of Purchase (POP) Tier 2
Materials and displays placed at the point of sale to promote products, including shelf talkers, dump bins, and signage.
Point of Sale (POS) Tier 2
The location where a transaction occurs. Also refers to the scanning systems that capture sales data at the checkout.
Premiumization Tier 2
The trend of shoppers trading up to higher-priced, higher-quality products within a category.
Price Elasticity Tier 2
A measure of how responsive sales volume is to a change in price. High elasticity means small price changes drive large volume shifts.
Price Pack Architecture (PPA) Tier 2
The structured design of pack sizes and price points to serve different shopper needs, occasions, and channels.
Price Waterfall Tier 2
A step-by-step visualization showing all deductions from list price to net realization: trade spend, discounts, rebates, and costs.
Private Label Tier 2
Products manufactured by a third party but sold under a retailer's own brand name. Also called store brand.
Product Universe Tier 3
The complete set of products tracked in a measurement system, defining the scope of syndicated data reports.
Promotional Allowance Tier 2
A payment from manufacturer to retailer to support promotional activities such as feature ads, displays, or price reductions.
Promotional Calendar Tier 3
The planned schedule of promotional activities across a period, showing timing, type, and investment for each event.
Promotional Display Tier 3
Any secondary placement used to promote products beyond the regular shelf position.
Purchase Frequency Tier 2
The average number of times a shopper buys a brand or category within a given time period.
Primary Sales Article
Sales from the manufacturer to distributors or retailers. Also called sell in. The manufacturer's revenue figure.
Q
Quality Weighted Weeks (QWW) Tier 3
A refined version of weighted weeks that adjusts for data quality issues such as store closures or reporting gaps.
R
Range Review Tier 2
A periodic assessment by a retailer of which products to keep, delist, or add. Determines the active assortment.
The number of units sold per store per time period. A fundamental measure of product performance at the individual store level.
Rebate Tier 2
A retrospective payment from manufacturer to retailer based on achieved volumes or agreed performance targets.
Reset Tier 3
A complete reconfiguration of a store's shelf layout, typically following a planogram update or category review.
Retail Execution Article
The set of activities ensuring products are available, visible, properly priced, and correctly merchandised at the point of sale.
Measures how much incremental revenue each dollar of trade investment generates. The key metric for promotion ROI.
RRP / RSP (Recommended Retail Price / Recommended Selling Price) Tier 2
The price the manufacturer suggests retailers sell the product for. Not binding, but serves as a reference point.
The strategic framework defining how products reach consumers through channel selection, distribution models, and coverage design.
S
Safety Stock Tier 2
Buffer inventory held to protect against demand variability and supply chain disruptions.
Scan-back Tier 2
A trade promotion mechanism where the manufacturer reimburses the retailer based on actual scanned sales during the promotional period.
Secondary Display Tier 3
Any product placement beyond the primary shelf position, including end caps, floor displays, and cross-merchandising positions.
Sell Story Tier 3
A data driven narrative presenting a product's performance metrics to convince a retailer to list or expand the range.
Sell Through Rate Tier 2
The rate at which inventory is sold to the end consumer after being delivered to the retailer.
Shelf Edge Labels (SELs) Tier 2 UK
Price and product information labels attached to the shelf edge. In the UK, increasingly replaced by electronic shelf labels (ESLs).
Shelf Life Tier 2
The period during which a product remains fit for sale and consumption under specified storage conditions.
Shelf Optimization Tier 2
The data driven process of determining the optimal shelf layout to maximize category sales, margin, or shopper satisfaction.
Shelf Purity Tier 2
The degree to which a shelf section contains only the intended products with no out-of-place items, competitor encroachment, or gaps.
The percentage of shelf space a brand occupies relative to competitors. A proxy for visibility and purchase likelihood.
Shopper Conversion Rate Tier 2
The percentage of shoppers who enter a category aisle or view a product online and actually make a purchase.
Shopper Insights Tier 2
Data driven understanding of who buys a category, when, why, and what drives their purchase decisions.
Shopper Journey Tier 2
The end to end path a shopper takes from need recognition through purchase and post-purchase evaluation.
Shopper Marketing Tier 2
Marketing activities designed to influence shoppers at the point of purchase, both in store and on the digital shelf.
SKU (Stock Keeping Unit) Article
A unique identifier for each distinct product variant. The atomic unit of sales measurement, inventory, and distribution tracking.
Slotting Fee Article
A one-time charge retailers impose on manufacturers to list a new product, covering shelf allocation, system setup, and risk.
SOVI (Standard Order Volume Indicator) Tier 3 NZ
A NZ-specific metric indicating the standard order volume for a product at a given store, used for replenishment planning.
Space Elasticity Tier 2
A measure of how responsive sales are to changes in shelf space allocation. Helps determine optimal facings per SKU.
SRP (Suggested Retail Price) Tier 2
The price the manufacturer recommends retailers charge. Equivalent to RRP in some markets.
Store Brand Tier 2
Products sold under a retailer's own brand name. Equivalent to private label.
Secondary Sales Article
Sales from distributors to retailers. Also called distributor sell out. Reveals whether products are actually moving through the channel.
Sell In vs Sell Out Article
Sell in is sales from manufacturer to retailer. Sell out is sales from retailer to consumer. Both must be tracked together.
Stock Replenishment Article
The process of restocking products at retail locations to maintain on shelf availability and prevent out of stocks.
T
Combines ACV distribution with average items carried into a single metric capturing both reach and depth of distribution.
A short term price cut funded by the manufacturer or retailer to drive incremental sales over a defined period.
TPx (Trade Promotion Excellence) Tier 2
A discipline and software category focused on optimizing trade promotion planning, execution, and measurement.
Trade Spend Article
The total budget a CPG manufacturer invests in retailer-facing activities: promotions, listings, displays, and trade marketing.
A framework for measuring how well promotional activities generate incremental sales and profit relative to trade investment.
The forward-looking discipline of using analytics and AI to plan promotions that maximize return on trade spend.
Trade Investment Tier 2
The total financial commitment a brand makes to retailer partnerships, encompassing promotions, listings, and development funds.
Trade Rate Optimization Tier 3
The process of optimizing the rates (discounts, allowances) offered to different retailers to maximize overall trade ROI.
Tertiary Packaging Tier 3
The outermost layer of packaging used for transport and warehousing, such as pallets and shrink-wrapped cases.
Tertiary Sales Article
Sales from retailers to end consumers. The truest measure of consumer demand in the CPG sales chain.
Traditional Trade Article
Small, independently owned retail outlets serviced by distributors rather than directly by manufacturers.
U
Ullage Tier 3 NZ/AU
The allowance for shrinkage, damage, and wastage built into retail ordering. Common in NZ/AU grocery.
Unit Sales Tier 2
Sales measured in units rather than dollars. Used alongside dollar sales to understand volume and price effects.
UOM (Unit of Measure) Tier 2
The standard measurement unit for a product: each, case, pallet, kilogram, liter. Critical for ordering and inventory management.
UPC (Universal Product Code) Article
The 12-digit barcode standard used primarily in the US and Canada for product identification at the point of sale.
V
Vendor Shop Tier 3
A dedicated branded section within a retailer's store managed by the manufacturer, with branded fixtures and staff.
Violator Tier 3 US
A large promotional sign placed on or near a display to attract shopper attention. Common in US retail.
VMI (Vendor Managed Inventory) Tier 2
A supply chain model where the manufacturer monitors the retailer's inventory levels and manages replenishment automatically.
Volume Decomposition Tier 2
The analytical process of breaking total sales into baseline, incremental, and various promotional effect components.
Velocity Article
The rate at which a product sells per store or per ACV point. The productivity metric for distribution.
W
Warehouse Tier 3
A facility for storing goods before distribution to retail stores or end consumers.
Wash Line Tier 3 NZ/AU
A NZ/AU retail term for the process of clearing and resetting a shelf section, removing old stock and replacing with new.
Weighted Distribution Tier 2
A general term for any distribution measure that accounts for store size. ACV distribution is the most common form.
White Space Tier 2
Market opportunities where products aren't currently distributed or marketed. Stores that should carry your product but don't.
Wing Display Tier 2
A secondary display positioned adjacent to the main shelf, extending into the aisle to increase visibility.
Width Pack Tier 2
A pack configuration containing multiple different SKUs (assortment), designed for variety or trial.
X
xAOC (eXtended All Outlet Combined) Tier 2 US
A Nielsen market definition extending AOC to include additional outlet types such as military, club, and convenience.
Y
YAG (Year Ago) Tier 3
Sales data from the same period in the previous year, used as a comparison baseline for growth measurement.
YTD (Year to Date) Tier 3
The cumulative period from the start of the current year to the present date. Used for tracking annual performance.
Z
No CPG terms beginning with Z in this glossary.
Browse by functional area
Prefer to explore by topic? Each pillar covers a functional area of CPG operations.
Distribution & Route to Market
How products get from factory to shelf. ACV, TDP, DSD, Modern Trade, Traditional Trade, and the metrics that measure distribution reach.
Store Execution & Merchandising
How products appear on shelf. Planograms, out of stocks, share of shelf, and the Perfect Store framework that ties it all together.
Trade Promotion & Commercial
The money layer. Trade spend, promotions, pricing strategies, and the frameworks for measuring whether your trade investment actually works.
Data, Measurement & Analytics
How the industry measures performance. Nielsen data, velocity, market share, SKUs, and the syndicated data ecosystem.
Supply Chain & Inventory
Getting products from factory to warehouse to store. OTIF, fill rates, replenishment, and the metrics that keep the supply chain flowing.
Product, Pricing & Packaging
Product master data, cost structures, and pricing. COGS, gross margin, GTINs, and the economics behind every SKU.
Digital & E Commerce
The online shelf. Digital shelf optimization, D2C, omnichannel strategy, and how CPG brands compete in e commerce.
CPG Terms Explained (overview)
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