Having Trouble Deciphering All Those Grocery Acronyms? Check out this handy Grocery Glossary!

March 12, 2024 |

When you’re an emerging CPG brand, it can be easy to get overwhelmed by information. The acronyms that get thrown around in casual conversation alone are enough to make you think retailers and distributors are speaking another language. We get it – even old pros can get lost in the sea of acronyms! In this blog, we’ll de-mystify the top 10 most common acronyms to help you get up to speed in no time.

ACV

All-commodity volume (ACV) is a weighted measure of product availability, or distribution, based on total store sales. In other words, ACV is the percentage of sales in all categories that are generated by the stores that stock a given brand. ACV can be expressed as a percentage or as a dollar value (total sales of stores carrying brand.)

All Commodity Volume (ACV) Distribution (%) =Total Sales of Stores Carrying Brand ($) ÷ Total Sales of All Outlets ($) X 100

BOGO

Buy One Get One Free (BOGO) or reduced price when another item is purchased at full price, either pre-packed together, or store sale offering. This is a very popular promotional tactic.

COGS

Cost of Goods Sold (COGS) measures the “direct cost” incurred in the production of any goods or services. It includes material cost, direct labor cost, and direct factory overheads, and is directly proportional to revenue. For goods, these costs may include the variable costs involved in manufacturing products, such as raw materials and labor. They may also include fixed costs, such as factory overhead, storage costs, and depending on the relevant accounting policies, sometimes depreciation expense.

EDLP/EDLC

Every Day Low Price/Cost (EDLP/EDLC) Ongoing discount given to a particular store or chain that is outside of other occasional promotional discounts.  EDLPs are set up through paperwork with the distributor that the store(s) are pulling the product through so that when they order, they get the discounted price.  Can be either OI, MCB, or a combination. Length of the EDLP is determined by the vendor.  EDLP discounts should not be taken on top of other promotions, so paperwork may need to reflect this.

IRC

Instant Redeemable Coupon (IRC) – These are coupons affixed to the front of the product that can be used at the register for a discount on that item. These are provided by the manufacturer and are useful in gaining trial at shelf. 

MCB

Manufacturer Charge Back (MCB) – Discount given to distributor and/or store where they purchase the product at regular/full price (Wholesale) and then charge back the manufacturer after the fact for the amount of the discount, usually based on how much product they sold during a fixed promotional time frame.

OI

Off Invoice (OI) – Discount given to distributor and/or store where the price of the product is discounted at the time of purchase and is shown at the reduced price on the invoice.  So, the discount is received regardless of whether the discount is passed along to the consumer, or whether it sells within a fixed promotional time frame.  Retailers may order more product from the distributor than they will sell during the promotion and sell it at full price later, a practice called ‘Forward Buying.’

POS

Point of Sale (POS) – On the shelf or display in the store where consumers buy the product.  Sometimes vendors will have POS materials like brochures, coupons, or shelf talkers that are distributed/displayed on the shelf with the product.  Or, the actual location where products are scanned/sold at the check-out.  Sometimes referred to as POP, Point of Purchase

SKU

Stock Keeping Unit (SKU) – A distinct item for sale. Number assigned to a single product, also used to refer to the individual product itself, as in “All 3 SKUs of that line are on deal.”

TPR

Temporary Price Reduction (TPR) – Promotion with a fixed length, may be OI, MCB, or scan

Learning and utilizing the common grocery terms will be part of your ongoing strategic brand development. Because there is no shortage of terms and acronyms in this business, we’ll be covering this as regular topic in our blogs! Check back for updates and new information.