FMCG Acronyms:
A Guide to Industry Jargon
The fast-paced world of Fast-Moving Consumer Goods (FMCG) requires knowledge of specific industry acronyms. This guide clarifies the most common terms, making communication smoother. From SKU (Stock Keeping Unit) to POS (Point of Sale), these acronyms are key to daily operations and strategic planning. This guide serves as a valuable resource for professionals aiming to build their knowledge and work more efficiently in FMCG businesses.
Financial
Financial terms form the backbone of business operations in the FMCG sector. A strong understanding of these terms helps with analysing profitability, pricing, and overall financial performance. Familiarity with these concepts ensures that professionals can make informed decisions, assess investments, and track key financial metrics effectively. The following section outlines key financial terms commonly used in FMCG to provide clarity and aid in daily financial tasks and strategic planning.
| Term | Definition |
|---|---|
| Margin | Margin is equal to sales minus the cost of goods sold (COGS). |
| Markup | Markup is equal to a product’s selling price minus its cost price. |
| RRP | Recommended Retail Price. |
| COGS | Cost Of Goods (the sum of all direct costs associated with making a product). |
| ROI | Return on Investment. |
| ROAS | Return on Ad Spend. |
| EOM | End of Month. |
| GST | Goods & Services Tax. |
Packaging
Packaging plays an important role in product presentation, protection, and distribution in the FMCG sector. It serves both functional and marketing purposes, making it crucial for businesses to understand the types and features involved. Various terms related to packaging can often seem technical, so a clear explanation helps in better product development, logistics, and retail placement. Below is a breakdown of common packaging terms used in FMCG.
| Term | Definition |
|---|---|
| GTIN | Global Trade Item Number. GTIN can be used to identify types of products at any packaging level (e.g., consumer unit, inner pack, case, pallet). |
| GS1 | Global Barcode Standard. |
| EAN | European Article Number. An international standard numbering and barcode system used primarily in retail applications. |
| Euro / Sombrero Hole | The little hole at the top of packaging that is used to hang your product. |
| Tear Notch | The little 'Nick' in the side of the pouch that enables customers to tear the top off easily. |
| SUP | Stand Up Pouch. |
| 3 Side Seal | Pouch that is glued on 3 sides and open at the bottom and then heat sealed once product is out inside. |
| Flow Wrap / Film / Rewind | A roll of film used on a flow wrapping machine. Think Muesli bar and protein bar packaging. |
| Fin Seal | The seal on the back of the product that is created when using film packaging. |
| Matte Finish | Not Shiny. |
| Gloss Finish | Shiny. |
| SRT / SRP / RRP | Shelf Ready Tray / Shelf Ready Packaging / Retail Ready Packaging. The display box that sits on the shelf in the store. Consumers see this. |
| Shipper | The outer carton where the SRT/SRP/RRP is put into for delivery. Consumers don't see this. |
Logistics
Logistics is the backbone of the FMCG industry, managing the flow of goods from production to the consumer. Understanding logistics terms helps streamline operations, improve distribution efficiency, and support collaboration across supply chain partners. The following list covers key logistics terms used in FMCG to provide clarity and improve coordination within the sector.
| Term | Definition |
|---|---|
| FIS | Free Into Store (Seller pays for the freight). |
| FOB | Free/Freight on Board (Buyer pays for the freight). |
| DC | Distribution Centre. |
| Chep / Loscam | Pallet Logistics companies. You will need to ship on either of these pallets when dealing with major grocery chains. |
General
A strong grasp of general FMCG terms aids in smoother communication and effective operations within the industry. Familiarity with these terms benefits professionals across various roles, from product development to sales and supply chain management. Below is a list of commonly used general terms in the FMCG sector, designed to support everyday business discussions and planning.
| Term | Definition |
|---|---|
| MOQ | Minimum Order Quantity. |
| FMCG | Fast Moving Consumer Goods. |
| CPG | Consumer Packaged Goods. |
| SKU | Stock Keeping Unit (Think of this as different variations of your products). |
| POS | Point of Sale (Cash register system). |
| NPD | New Product Development. |
| UPSPW | Units Per Store Per Week (Hurdle rates grocery chains use to assess product sales). |
| NAFNAC | No Artificial Flavours, No Artificial Colours. |
| D2C | Direct to Consumer (Retail Sales). |
| B2B | Business to Business (Wholesale Sales). |
| OOS | Out Of Stock. |
| PO | Purchase Order. |
| Lead Time | Time required from ordering to receival of stock. |
