Industry
The Language of the Trade: A Glossary of Beverage Alcohol Sales Terms
The short answer
Beverage alcohol sales has its own language, and most of it was invented by distributors. A founder who confuses shipments with depletions reports sales that have not happened; a rep who does not know what a bill back is signs away margin; a new hire who hears "work with" and "ride along" as the same thing misses what the distributor is offering. This glossary covers the terms a brand's team will hear in its first year, grouped by where they come up. Each entry is one or two sentences, written to be quoted.
Who this is for: new hires, founders from outside the industry, investors and anyone who nods along in distributor meetings. Reading time about eight minutes, or keep it open.
Selling and distribution terms
| Term | Definition |
|---|---|
| Three tier system | The US structure in which producers sell to distributors, distributors to retailers, and retailers to consumers, each tier legally separate. See How the three tier system works. |
| Supplier | The producer or importer that owns the brand and sells to distributors; tier one. |
| Distributor (wholesaler) | The licensed middle tier that buys from suppliers, warehouses, pays state taxes, delivers and sells to retailers. |
| Account | Any licensed retailer the brand sells to or through: a bar, restaurant, store or chain. |
| Point of distribution (POD) | One SKU listed in one account. A brand with one expression in 100 accounts has 100 PODs; two expressions in the same accounts, 200. |
| Depletion | A case sold by the distributor to an account. Depletions are real sales; shipments are not. |
| Shipment | A case the supplier sent to the distributor's warehouse. Shipments ahead of depletions mean inventory is building at the distributor. |
| Depletion report | The distributor's monthly or weekly report of cases sold by account and SKU; the brand's right to it belongs in the contract. |
| Velocity (rate of sale) | How fast a product sells per account, usually cases per account per month or bottles per store per week. |
| Reorder rate | The share of accounts that order again in a period; the depth measure behind PODs. |
| FOB (freight on board) | The supplier's price per case to the distributor, before freight and taxes. |
| Laid in cost | The distributor's cost for a case after FOB, freight and taxes; the base for its list price. |
| Frontline price | The distributor's standard price to retailers before any deal. |
| Case deal (quantity discount) | A lower price per case when the account buys a set number of cases; the most common on premise and independent retail incentive. |
| Depletion allowance | A rebate the supplier pays the distributor per case actually sold through to accounts, calculated from the depletion report rather than discounted on purchase. |
| Bill back | The distributor's claim to the supplier for a depletion allowance or program it funded; the same money viewed from the distributor's side. |
| Spiff | A cash incentive paid to a distributor's sales reps for a placement or a case sold during a program period. Paid to distributor staff, never to the retailer. |
| Trade spend | Everything the supplier spends to move product through the trade: allowances, spiffs, samples, point of sale, tastings. Tracked per case depleted. |
| Exclusive territory | The agreement giving one distributor the brand in a state or region; standard in the US. |
| Franchise state | A state whose law makes ending a distributor contract difficult without cause, notice or compensation. |
| Control state | A state that operates wholesale or retail sale of spirits itself; seventeen US jurisdictions. |
| Tied house | The prohibited arrangement in which a supplier or distributor owns, controls or induces a retailer; tied house laws limit what a brand can give an account. |
| Broker (agent) | An independent sales representative or agency that sells a brand to accounts in a market for a retainer, a commission or both, without taking title to the goods. |
| COLA | Certificate of Label Approval, the federal label permit a product needs before sale. |
| Nine liter case | The industry's standard volume unit, twelve 750 ml bottles; brand volumes are quoted in millions of nine liter cases. |
On premise terms
| Term | Definition |
|---|---|
| On premise | Accounts that sell alcohol to be consumed where it is bought: bars, restaurants, hotels, clubs, venues. |
| Well (house pour) | The default brand poured when a guest does not name one; chosen on cost per ounce, highest volume, lowest brand visibility. |
| Call brand | A brand the guest asks for by name; priced above the well. |
| Premium or top shelf | The highest priced tier on the back bar, usually displayed highest and poured least. |
| Back bar | The display shelves behind the bartender where call and premium brands sit; a brand's visible real estate in the account. |
| Speed rail | The rack at the bartender's hip holding the well bottles; the fastest moving placement in the bar. |
| Pour cost | The cost of the liquid in a drink divided by its menu price; the industry target is 18 to 24%. |
| Build (spec) | A cocktail recipe written the way the bar writes it: ingredients in ounces, method, glass, garnish. |
| Feature | A limited run promotion: drink of the month, weekend special, seasonal list. A trial for a listing. |
| Signature listing | A named cocktail on the permanent menu with the brand in the build; the most valuable on premise placement. |
| Menu placement | Any listing of the brand on the printed or digital menu, by name. |
| Beverage director | The person who builds the drinks program for a restaurant, group or hotel; the buyer for menu listings. |
| Bar manager | The day to day buyer at an independent bar; orders from the distributor rep. |
| Reprint | The date a menu is reissued; the deadline a listing commitment is tied to. |
| Daypart | A period of the trading day (brunch, happy hour, dinner, late night) used to analyze sales; the espresso martini peaks in the 9pm hour. |
| Check average | The average spend per guest or table; cocktails raise it. |
| Staff training | A session teaching the bar team the brand and the build; the activation most likely to produce a recommendation. |
| Chain (on premise) | A multi unit restaurant or bar group with a corporate beverage buyer and a mandated menu. |
Off premise terms
| Term | Definition |
|---|---|
| Off premise | Accounts that sell sealed alcohol for consumption elsewhere: liquor stores, grocery, convenience, chains, state stores. |
| Independent | A single store or small group buying through the distributor rep on a route; the fastest off premise placement to win. |
| Chain | A multi store retailer with a headquarters buyer, a review calendar and mandated shelf sets executed store by store. |
| Category manager | The chain buyer responsible for a category (spirits, wine, beer); makes listing decisions on scan data and programs. |
| Planogram (shelf set) | The map of which products sit where on a chain's shelf; reset on a schedule. |
| Reset | The scheduled rebuild of a shelf set, usually once or twice a year; the moment listings are added or cut. |
| Facings | The number of bottle fronts of a SKU visible on the shelf; more facings, more sales. |
| Shelf position | Where on the shelf a product sits; eye level sells, bottom shelf does not. |
| Display | A secondary placement off the shelf: end cap, case stack, floor display, counter unit. |
| End cap | The display at the end of an aisle, the most valuable secondary placement in a store. |
| Shelf talker | A small printed tag on the shelf edge carrying the brand's message or price. |
| Point of sale (POS) | Printed and physical marketing material placed in an account: shelf talkers, table tents, neck hangers, displays. |
| Scan data | Register level sales data by store and week, syndicated by NIQ and Circana; what chain buyers trust. |
| Mandate | A chain headquarters instruction to stock a product in all or some stores; execution still depends on the distributor and the store. |
| Out of stock (OOS) | A listed product missing from the shelf; 43% of shoppers substitute a competitor when they cannot find a brand. |
| Back room | A store's stock room; 6 to 14% of purchased inventory sits there unshelved. |
| State store (ABC store) | A retail store operated by a control state. |
| Listing (control state) | Approval by a state board to sell a product in its stores, on a fixed review calendar. |
| Shelf price | The price to the consumer; works back through retail and distributor markups to the supplier's FOB. |
| Price point | The shelf price tier a product competes in (value, premium, high end premium, super premium in DISCUS terms). |
Field and activation terms
| Term | Definition |
|---|---|
| Field team | The brand's own reps, ambassadors and market managers who call on accounts; they sell through the distributor, not around it. |
| Brand ambassador | A brand employee or contractor focused on education, bartender relationships and events rather than orders. |
| Market manager | The brand's person responsible for a city or region: accounts, distributor relationship, programs. |
| Account visit (sales call) | A rep's in person stop at an account: observe, pitch, ask, commit, log. |
| Visit log (call report) | The record of a visit: what was observed, discussed, promised and the next step. The brand's institutional memory. |
| Commitment | A specific action, by a named person, by a date, agreed at a visit (a listing, a reorder, a training). |
| Follow up | The scheduled touches after a visit that turn a commitment into an order: confirm, check, prove. |
| Ride along | A brand rep spending a route day in the distributor rep's car, calling on the distributor's accounts together. |
| Work with | A distributor rep's term for a day worked with a supplier rep; the same thing from the other side. |
| Hit list (target list) | The named accounts a brand and distributor agree to work in a period, with buyer names and timing. |
| Monthly objective | The one measurable goal set for a distributor team each month (placements, cases, features), usually with a spiff. |
| Tasting | A staff or consumer sampling of the product at an account; on premise it usually means the bar team. |
| Activation | A brand event at or around an account: a feature night, a festival pour, a sponsored evening; measured by sales that follow. |
| Sampling | Giving consumers a taste in a store or venue where the state allows it; the off premise activation. |
| Incentive | Money or prizes offered to distributor reps or account staff for selling the brand, within tied house limits. |
| Pull through | Demand created at the consumer and account level that pulls product through the distributor, as opposed to pushing cases into the warehouse. |
| Sell in / sell through | Sell in is placing the product with the account; sell through is the account selling it to guests. Only sell through creates a reorder. |
| Core account | One of the handful of accounts that anchor a brand in a market, buying weekly and visible to others. |
| Influence account | An account whose listing signals to other buyers: the award winning bar, the group flagship. |
| Depletion goal | The case target a brand and distributor set for a period; the number the spiff and the review are tied to. |
Frequently asked questions
What are depletions in the alcohol industry?
Cases a distributor sells to retail and on premise accounts. They are the brand's real sales; shipments to the distributor are not.
What is a POD in beverage sales?
A point of distribution: one SKU listed in one account. PODs measure breadth; reorder rate measures depth.
What is the difference between a well brand and a call brand?
The well is the house pour used when no brand is named; a call brand is one the guest asks for by name.
What is a bill back?
The distributor's claim to the supplier for an allowance or program it funded on cases sold through; the supplier calls the same money a depletion allowance.
Sources
- Vistaar, Depletion Allowance (Alcohol): Definition and Rules for Trade
- Speakeasy Wine and Spirits, Liquor Industry 101: Dictionary of Industry Terms
- FIVE x 5, Three Tier System Alcohol: How It Works and What It Costs
- Park Street, How Craft Spirit Brands Win Distributor Rep Attention
- Park Street, Finding Financial Success in Today's Spirits Market, September 2025
- Jeffrey Morgenthaler, How to Price a Cocktail Menu
- Wikipedia, Three tier system (alcohol distribution)
