CPG Industry Dictionary

Your comprehensive guide to consumer packaged goods terminology. From basic concepts to advanced industry jargon, we've got you covered.

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Showing 11 terms

A

A/B Testing

MARKETING
A method of comparing two versions of a marketing element (packaging, ad, website, etc.) to determine which performs better. One version (A) is tested against a variant (B) with a specific metric measured.
EXAMPLE

"We ran A/B testing on two different package designs and found that the blue version increased sales by 23%."

ASRP

RETAIL

Advertised Suggested Retail Price

The price at which a manufacturer recommends that a retailer sell a product to consumers. This is often used in advertising and promotional materials to establish a baseline price point.
EXAMPLE

"The ASRP for the new shampoo line is $12.99, but retailers may choose to offer promotions or discounts."

Also known as: MSRP, RRP

B

Big Box Retailer

RETAIL
A physically large retail establishment, usually part of a chain, that offers a wide variety of products. Examples include Walmart, Target, and Costco. These retailers typically have significant buying power and can negotiate favorable terms with CPG manufacturers.
EXAMPLE

"Securing shelf space in big box retailers is crucial for brand visibility and volume sales."

Brand Equity

MARKETING
The commercial value derived from consumer perception of a brand name rather than the product itself. Strong brand equity allows companies to charge premium prices and maintain customer loyalty.
EXAMPLE

"Coca-Cola's brand equity is so strong that consumers often choose it over cheaper alternatives."

Read more about brand equity →

C

Case Pack

SUPPLY CHAIN
The number of individual units packaged together in a shipping case. Retailers typically order products by the case, and case pack size can affect shelf space allocation and inventory management.
EXAMPLE

"The new cereal has a case pack of 12 units, which fits perfectly on standard retail shelving."

Category Management

RETAIL
A retailing and purchasing concept in which the range of products purchased by a retailer is managed as a discrete business unit. This approach focuses on maximizing the overall category performance rather than individual brand success.
EXAMPLE

"Through category management, the retailer reorganized the snack aisle to increase impulse purchases."

COGS

FINANCE

Cost of Goods Sold

The direct costs attributable to producing the goods sold by a company. This includes the cost of materials and direct labor used to create the product, but excludes indirect expenses such as distribution and sales force costs.
EXAMPLE

"By optimizing the supply chain, the company reduced COGS by 8%, significantly improving profit margins."

D

Distribution Center (DC)

SUPPLY CHAIN
A warehouse or specialized building filled with products that are to be sent to retailers, distributors, or directly to consumers. DCs are designed to receive, store, and redistribute products efficiently.

DTC

E-COMMERCE

Direct-to-Consumer

A business model where manufacturers or brands sell products directly to end consumers, bypassing traditional retail intermediaries. This allows for higher margins, direct customer relationships, and better data collection.
EXAMPLE

"Many CPG brands have launched DTC websites to supplement their retail distribution and build direct relationships with consumers."

E

Endcap

RETAIL
A display at the end of a store aisle, typically used for promotional or seasonal items. Endcaps are prime retail real estate and can significantly boost product visibility and sales.
EXAMPLE

"The brand secured a holiday endcap at 500 stores, resulting in a 40% increase in December sales."

O

On-time in full (OTIF)

A measure of how often a company delivers products to its customers on time and in full.