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CPG Directory

CPG Glossary

The words you will hear on the way from a recipe to a store shelf: shipping, packaging, food science, selling, coupons and more. Plain language, no jargon about jargon.

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124 terms

A

Accessorial charges
Extra freight fees for things like liftgate service, residential delivery or waiting time.
Shipping & logistics
Acidified food
A low-acid food, like peppers or vegetables, with acid added to bring it to pH 4.6 or below. The FDA has special rules, including facility registration, filing the process and a trained supervisor.
Food science & safety
Additional insured
A buyer or retailer named on your policy so it is protected too, often required before they will sell your product.
Legal & compliance
Allergen cross-contact
When traces of an allergen get into a food that should not have it, for example through shared equipment.
Food science & safety
Allergen statement
The 'Contains' line for the nine major allergens: milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, soybeans and sesame.
Packaging & labeling
Amazon 1P and 3P1P3P
1P: you sell wholesale to Amazon and it sets the shelf price. 3P: you sell directly to shoppers on Amazon's marketplace.
E-commerce & marketing
Average order valueAOV
The average amount spent per order.
E-commerce & marketing

B

Batch
One production run made together. Each batch gets a lot code.
Manufacturing & production
Best-by date
A date for peak quality, not safety. Federal law does not require one on most foods, but buyers usually do.
Packaging & labeling
Bill of ladingBOL
The shipping document that lists what is on a truck, who sent it and where it is going. The driver signs at pickup and the receiver signs at delivery.
Shipping & logistics
Bill of materialsBOM
The list of every ingredient and packaging part in one unit.
Manufacturing & production
Bill-back
A discount paid after the promotion, based on proof of what sold.
Coupons & promotions
Brix
A scale for the sugar content of a liquid. Used for jams, sauces and juices.
Food science & safety
Broker
A sales agent who presents your product to retailers and distributors for a commission. Brokers do not own the product.
Sales & retail
Buy one, get oneBOGO
A deal where a second item is free or discounted when you buy the first.
Coupons & promotions

C

Case pack
The number of units in a case, such as 12 jars. Retailers order by the case.
Packaging & labeling
Category review
A scheduled evaluation when a retailer decides which products to add or drop. Also called a line review. A reset is when the shelf is rearranged afterward.
Sales & retail
Certificate of insuranceCOI
Proof of your insurance coverage. Retailers and distributors ask for one.
Legal & compliance
Changeover
Switching a line from one product to another, including cleaning. It costs time and money.
Manufacturing & production
Chargeback
An amount a retailer subtracts from your payment for fines, shortages, damages or promotions. Also called a deduction.
Sales & retail
Clean label
Short ingredient lists with names shoppers recognize. It has no legal definition.
Food science & safety
Co-packerco-man
A company that makes or packages your product in its plant. Also called a co-manufacturer or co-man.
Manufacturing & production
Cost of goods soldCOGS
What it directly costs to make a product: ingredients, packaging, labor and co-packer fees.
Finance & business
Cottage food law
Texas lets some low-risk foods be made at home and sold directly, with limits on what and where. Check the current rules before relying on it.
Legal & compliance
Coupon clearinghouse
A company that collects redeemed coupons from retailers and bills the brand.
Coupons & promotions
Cross-docking
Moving goods straight from an incoming truck to an outgoing one with little or no storage in between. Many retailers run their warehouses this way.
Shipping & logistics
Customer acquisition costCAC
What it costs, in marketing and sales, to win one new customer.
E-commerce & marketing

D

Dieline
A flat template showing where a package's folds, cuts and print areas go. Art should extend slightly past the cut line (the bleed) so no white edge shows.
Packaging & labeling
Digital coupon
A coupon loaded to a retailer's app or loyalty account and applied at checkout.
Coupons & promotions
Direct store deliveryDSD
Delivering product straight to the store shelf instead of through the retailer's warehouse.
Sales & retail
Direct to consumerDTC
Selling straight to shoppers through your own website instead of a retailer.
E-commerce & marketing
Distributor
A company that buys products from brands, stores them and delivers them to stores, taking a margin.
Sales & retail
Doors
The number of stores carrying your product.
Sales & retail

E

Electronic data interchangeEDI
The standard way large retailers send purchase orders and receive invoices and shipping notices.
Shipping & logistics
Emulsion
A mix of oil and water that does not separate, like mayonnaise or salad dressing.
Food science & safety
Endcap
A display at the end of an aisle. It is a premium spot with high sales.
Coupons & promotions

F

Factoring
Selling your unpaid invoices at a discount to get cash quickly.
Finance & business
Faire
An online wholesale marketplace where independent retailers order from small brands.
E-commerce & marketing
FDA food facility registration
Most facilities that make, pack or store food for sale must register with the FDA and renew every two years.
Legal & compliance
Fill rate
The share of ordered cases you actually shipped. Shipping 90 of 100 ordered cases is a 90% fill rate.
Shipping & logistics
FOB (free on board)FOB
Says who pays for shipping and who owns the goods in transit. 'FOB origin' means the buyer pays and owns them once they leave your dock.
Shipping & logistics
Food Safety Modernization ActFSMA
The federal food safety law that focuses on preventing problems rather than reacting to them.
Food science & safety
Free fill
Free product given to a new retailer to stock the shelf at launch.
Coupons & promotions
Freight classNMFC
A number from 50 to 500 that helps set LTL rates, based on density, handling and value. Denser goods usually have a lower class and cost less.
Shipping & logistics
Full truckloadFTL
One shipper uses the whole trailer, often 24 to 26 pallets. Faster and less handling than LTL.
Shipping & logistics

G

Good manufacturing practiceGMPcGMP
The FDA's baseline rules for clean, controlled food production: sanitation, training, pest control and records.
Food science & safety
Gross margin
Price minus COGS, as a share of the price. A $10 product that costs $6 to make has a 40% gross margin.
Finance & business
Gross sales vs. net sales
Gross sales are before discounts, fees and promotions. Net sales are what is left after them.
Finance & business
GS1GS1
The organization that issues company barcode prefixes. Retailers expect barcodes registered with GS1.
Packaging & labeling

H

HACCPHACCP
Hazard Analysis and Critical Control Points: a system for finding food hazards and controlling them at specific points.
Food science & safety
Headspace
The empty space between the food and the lid. It matters for vacuum seals and safety.
Packaging & labeling
High-pressure processingHPP
Using very high pressure instead of heat to kill bacteria. Common for juices and dips sold cold.
Food science & safety
Hot fill
Filling containers with hot product, then sealing, so the heat helps keep it safe and shelf-stable.
Food science & safety

I

In-store demo
A tasting or sampling event, often run by a demo company. It helps shoppers try a product for the first time.
Coupons & promotions
Ingredient statement
The list of ingredients on the label, in order from the most to the least by weight.
Packaging & labeling
Item setup
Entering a new product into a retailer's system: UPC, case size, cost and more. Often a new item form.
Sales & retail

K

Kill step
A step that destroys harmful microbes, such as cooking or acidifying.
Food science & safety

L

Landed cost
The full cost of getting a product to the buyer: product, freight, duties and handling.
Shipping & logistics
Lead time
How long it takes from placing an order to receiving it. Buyers expect you to hit the lead time you quoted.
Shipping & logistics
Less than truckloadLTL
A few pallets that share a truck with other companies' freight. Cheaper than a full truck for small loads, but handled more often.
Shipping & logistics
Lifetime valueLTV
The total profit you expect from a customer over time. It should be well above CAC.
E-commerce & marketing
Lot code
A code on each package that identifies its batch. It is what makes a recall possible.
Packaging & labeling

M

Manufacturer couponMCB
A coupon the brand funds. The face value is what it is worth to the shopper.
Coupons & promotions
Margin stack
How the price climbs from you to the shelf: each step, like a distributor and a retailer, takes a margin.
Finance & business
Minimum order quantityMOQ
The smallest order a supplier or co-packer will accept.
Shipping & logistics
Minimum run
The smallest amount a plant will make in one go.
Manufacturing & production

N

Net 30
Payment is due 30 days after the invoice. Net 60 and Net 90 work the same way.
Finance & business
Net contents
The amount of food in the package, not counting the packaging, shown in both U.S. and metric units.
Packaging & labeling
Non-disclosure agreementNDA
A contract where both sides agree to keep shared information, like recipes, confidential. Common before talking to a co-packer.
Legal & compliance
Nutrition Facts panel
The FDA-required label with calories and nutrients. Some very small businesses qualify for an exemption, but must claim it.
Packaging & labeling

O

Off-invoice
A discount taken straight off the invoice up front.
Coupons & promotions
On time, in fullOTIF
A retailer score for delivering the right amount on the right date. Misses can trigger fines.
Shipping & logistics
Organic and Non-GMO certification
Labels such as USDA Organic or Non-GMO Project Verified are earned through outside certifiers and cannot be used without them.
Legal & compliance

P

Pallet
A flat wooden or plastic platform that goods are stacked on so a forklift can move them. The standard U.S. pallet is 48 by 40 inches.
Shipping & logistics
Pallet label (SSCC)SSCC
A scannable pallet label with a unique serial number. Many retailer warehouses require it.
Shipping & logistics
Pasteurization
Heating food enough to kill harmful microbes.
Food science & safety
pHpH
The acidity scale from 0 to 14. For shelf-stable sauces, a pH of 4.6 or lower is a key safety line.
Food science & safety
Planogram
A diagram showing where each product sits on the shelf.
Sales & retail
Pressure-sensitive label
A peel-and-stick label, the most common kind on jars and bottles.
Packaging & labeling
Preventive Controls Qualified IndividualPCQI
The trained person who writes and oversees a food safety plan.
Food science & safety
Primary packaging
The package that touches the product: a jar, bottle, pouch or bag.
Packaging & labeling
Principal display panelPDP
The part of the label shoppers see first. It must show the product name and net quantity.
Packaging & labeling
Private label
Products made for a retailer to sell under its own brand.
Sales & retail
Process authority
An expert who reviews your recipe and process and confirms in writing that it is safe. Often needed for shelf-stable and acidified foods.
Food science & safety
Product liability insurance
Coverage if someone is harmed by your product. Most retailers require it.
Legal & compliance
Promo calendar
A retailer's schedule of ad weeks and deals, set months ahead.
Coupons & promotions
Purchase orderPO
The document a buyer sends to order product, with quantities, price and delivery date.
Finance & business
Purchase order financing
A loan that covers production costs for a confirmed large order.
Finance & business

R

Recall
Pulling an unsafe or mislabeled product from the market. A mock recall is a practice test: can you trace one lot to every customer, fast?
Food science & safety
Redemption rate
The share of distributed coupons that get used. It is usually small.
Coupons & promotions
Reefer
A refrigerated truck or trailer for products that must stay cold or frozen.
Shipping & logistics
Retail buyer
The person at a store or chain who chooses which products to carry.
Sales & retail
Retail media
Ads that retailers sell on their own websites and apps, like sponsored product listings.
E-commerce & marketing
Retort
Cooking sealed pouches or cans under pressure in steam so low-acid foods can be shelf-stable.
Food science & safety

S

Scale-up
Moving from a kitchen batch to plant production. Flavor, texture and safety can change, so test before you commit.
Manufacturing & production
Scan dataPOS
Sales data from store checkout scanners. Services like Circana and SPINS sell it.
Sales & retail
Scan-based promotion
The brand pays the discount only on units that actually scan at checkout during the promotion. Also called scan-down.
Coupons & promotions
Secondary packaging
Groups primary packages together, like a carton, tray or shrink bundle.
Packaging & labeling
Sell sheet
A one-page summary of a product with photos, pack size, price and key facts, used to pitch buyers.
Sales & retail
Shelf life
How long a product stays safe and good quality, set by testing. 'Shelf-stable' means it can sit at room temperature until opened.
Food science & safety
Shelf-ready packagingSRP
A case made to be opened and put on the shelf as is, often with a tear-away front.
Packaging & labeling
Shipper display
A cardboard display shipped already loaded with product, ready to set out in the store.
Coupons & promotions
Shrink sleeve
A printed plastic sleeve that shrinks tight around a container when heated.
Packaging & labeling
SKU (stock keeping unit)SKU
One product in one size or flavor, as a store tracks it. A salsa in two sizes is two SKUs.
Packaging & labeling
Slotting fee
A one-time fee some retailers charge to place a new product on the shelf.
Sales & retail
Spec sheet
A document describing a product: ingredients, size, shelf life and case details. Buyers and co-packers ask for it.
Manufacturing & production
SQF (Safe Quality Food)SQF
A food safety certification, from an outside audit, that many large retailers require.
Food science & safety
Subscription
Customers get an item on a repeat schedule, often at a small discount. Good for steady revenue.
E-commerce & marketing

T

Tamper-evident seal
A seal or band that shows if a package was opened, like the safety button on a jar lid.
Packaging & labeling
Temporary price reductionTPR
The shelf price is lowered for a set time, usually funded by the brand.
Coupons & promotions
Tertiary packaging
What is used to ship: master cases, pallets and stretch wrap.
Packaging & labeling
Texas DSHS licenseDSHS
In Texas, food made for wholesale generally needs a license or registration from the Department of State Health Services. Check the current rules for your product.
Legal & compliance
Third-party logistics3PL
A company that stores, packs and ships products for you.
Shipping & logistics
Ti-HiTI x HI
How a pallet is built: cases per layer (Ti) times the number of layers (Hi). Buyers and warehouses ask for it.
Shipping & logistics
Traceability
The ability to follow ingredients from supplier to finished lot to customer, and back.
Food science & safety
Trade promotion
A temporary deal run with a retailer, such as a price cut, ad feature or display.
Coupons & promotions
Trade spend
Money a brand gives retailers and distributors to support sales: discounts, fees and promotions. Often tracked as a percent of gross sales.
Coupons & promotions
Trademark
Legal protection for your brand name or logo, registered with the U.S. Patent and Trademark Office.
Legal & compliance

U

UPC (barcode)UPCGTIN
The 12-digit barcode number that identifies a product at checkout. It belongs to the GTIN family of product numbers.
Packaging & labeling

V

Velocity
How fast a product sells, usually units per store per week. Buyers judge new items by it.
Sales & retail

W

Water activityaw
A 0 to 1 measure of how much water in a food is free for bacteria and mold to use. Lower means more shelf-stable.
Food science & safety
Wholesale price and MSRPMSRP
Wholesale is what the retailer pays you. MSRP is the manufacturer's suggested shelf price.
Sales & retail
Working capital
The cash you need for day-to-day costs like ingredients and packaging. Growth uses it up fast because you pay before you get paid.
Finance & business

Y

Yield
How much finished product you get from the raw ingredients. Losses lower the yield and raise your cost.
Manufacturing & production

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These are general explanations, not legal, tax or food-safety advice. Rules change, so check with the right expert or agency before you act.