The worst distributor business review we ever watched went like this. The supplier opened with a depletion chart. The chart was up. Everyone relaxed. Ninety minutes later the meeting ended with a handshake and a plan to push harder on the same SKUs. Four months after that, the brand discovered it had lost shelf space in about sixty accounts across the same period the chart was climbing, because a chain had reset its planogram and nobody in the room had any way to see it.
Nobody lied in that meeting. That’s the part worth sitting with. The distributor reported the only number they could see, the supplier graded them on it, and both sides walked out with a shared and incorrect picture of the market. A depletion chart is a real measurement of a real thing. It just isn’t a measurement of whether your brand is winning.
We’re gmware, a software and data engineering firm in Austin, TX, with delivery centers in Bangalore and Mohali, India. We also build Shield Suite, our retail-intelligence platform for beverage-alcohol brands across 60,000+ storefronts, which means we spend a lot of time on the specific question of what a brand can and can’t know about its own shelf. This post is the agenda we’d hand a national sales director walking into their next quarterly review.
| Metric | What it exposes |
|---|---|
| Effective distribution | Authorized accounts that never actually stocked you |
| Distribution decay rate | Doors leaving quietly while volume looks fine |
| Depletion-to-shelf variance | Loading, buy-ahead, and inventory sitting in accounts |
| Account-level OOS rate | Lost sales at a shelf that’s still “distributed” |
| Shelf price compliance | Your pricing strategy surviving contact with retail |
| Programme execution rate | Whether the display you paid for went up |
| New-account velocity | Whether new placements are real or trial-only |
| Channel mix drift | Your footprint sliding away from your strategy |
Why a depletion-only scorecard grades the wrong thing
Depletions measure product leaving the distributor’s warehouse. They don’t measure product leaving the shelf. We’ve written the full mechanics of that gap in our depletion data explainer, so rather than re-run it, here’s what it does to a scorecard specifically.
It grades the distributor on the one number they control most directly. A distributor can move depletions by selling deeper into accounts they already serve, by timing shipments against a price increase, or by landing a large order that sits in a back room for two months. None of those are misconduct. All of them look identical to demand on a chart. And a depletion-only review has no way to distinguish the three, which means the review can’t reward the behaviour you actually want, which is durable shelf presence.
The second problem is asymmetry. Depletions are a distributor-reported number about distributor activity. Grading a partner exclusively on the metric they generate is how you end up managing a report instead of a market. The fix isn’t distrust. It’s adding measurements that come from somewhere else, so both parties are looking at something neither one produced.
Where the depletion line and the shelf line separate
The eight metrics
Each one below gets the same treatment: what it is, what you count, where the number comes from, and the failure it catches.
1. Effective distribution
Accounts physically stocking your product, divided by accounts authorized to carry it. Authorization is paperwork. Stocking is physical. The gap between them is the most under-measured number in beverage alcohol, because distributor reporting counts the authorization and nobody counts the shelf.
Syndicated data has a cousin of this metric in %ACV distribution, which divides the all-commodity dollars of stores carrying your item by the all-commodity dollars of every store in the market, so bigger stores weigh more (CPG Data Insights walks the arithmetic; Scout adds the useful warning that ACV “measures opportunity, not sales” and reads high when you’re in big stores). Track both. A brand at 30% numeric distribution and 70% ACV is a very different business from the reverse, and only one of those is fragile to a single chain reset.
2. Distribution decay rate
Accounts that carried you last period and don’t this period, as a share of the base. Doors lost, not doors gained. Growth reporting hides this because net distribution can be flat while you churn twenty accounts in and twenty out, which is a completely different operating problem from twenty steady accounts.
You need account-level stocking data across two periods to compute it. A distributor’s account list will show you who ordered and who didn’t, which is a partial read: an account that didn’t order this month might still be selling through inventory. Confirming an actual loss means looking at the shelf.
3. Depletion-to-shelf-sales variance
Depletion units minus estimated shelf sell-through units, over the same window, at the same grain. This is the reconciliation that turns depletions from a suspect number into a useful one. Persistent positive variance means inventory is accumulating in accounts. Persistent negative variance usually means you’re stocked out somewhere and shipping can’t keep up.
The inputs come from two systems, which is why almost nobody runs it: depletions from the distributor extract, sell-through from scan, POS, or store-level observation. Getting them onto a shared product and account master is most of the work, and it’s the same reconciliation layer every other metric here depends on.
4. Out-of-stock rate at account level
Authorized, stocking accounts showing no product on shelf, divided by stocking accounts, measured on a defined cadence. Regional rollups are useless here. A 6% out-of-stock rate spread evenly is a supply chain issue; the same 6% concentrated in your twelve best-velocity accounts is a revenue emergency.
The most-quoted number in this space comes from a 2002 worldwide study for the Grocery Manufacturers of America by Gruen, Corsten, and Bharadwaj, which pooled 52 studies across 29 countries and put the average retail out-of-stock rate at 8.3% (full report text; original PDF). Treat that as historical context, not as your target. It predates modern replenishment, it isn’t beverage-alcohol specific, and your own last four quarters are a far better yardstick. We go deeper on the reporting mechanics in our piece on void and out-of-stock reporting.
5. Shelf price compliance
Accounts where the observed retail price falls inside your suggested range, divided by accounts observed. Not list price. Not the price on the distributor’s invoice. The number on the shelf tag, which is where your positioning either survives or doesn’t.
This one is almost entirely outside distributor reporting, because the distributor doesn’t set it and often doesn’t know it. It’s also the metric where a brand most often discovers its premium tier is being sold as a value item in one chain and a luxury item two miles away. Our MAP and MSP enforcement guide covers what you can and can’t do about it, and Price to Consumer is the module we built for measuring it.
6. Programme and display execution rate
Accounts where the agreed display, feature, or secondary placement was actually in place during the window, divided by accounts that agreed to it. This is the metric that decides whether your trade spend bought anything.
Retail execution people have quoted a wide gap between assumed and actual compliance for years, usually tracing back to a Shop! Association compliance study that put perceived in-store promotion compliance near 70% against an actual rate of 40%, with Roamler and IMS Retail both citing it. We could not find the primary study document, so we’d call that directional rather than authoritative. The honest version: nobody publishes a credible bev-alc display compliance benchmark, and you should measure your own. More on the method in retail execution tracking.
7. New-account velocity and time to first reorder
Two numbers. New accounts opened per period, and the median days from first order to second order. The second is the one that matters. A distributor sales rep can open a lot of doors with a one-case placement that never repeats, and a new-accounts count rewards them for it. Time to first reorder tells you whether the placement was real.
New-account counts and reorder dates both live in distributor order data, so this is one your distributor can genuinely report. Ask for it by rep and by account type.
8. Chain-versus-independent mix drift
Your volume and door count split across chain and independent accounts, tracked against the split your strategy calls for. Drift usually isn’t a decision anybody made. It’s the accumulated result of where it’s easiest to sell, and for most distributors that’s chains, because chain authorizations move volume in single conversations.
If your brand’s positioning depends on independent presence, this metric is the early-warning system for losing it. Distributor account data gives you the split by channel; whether those independents are actually merchandising you is a separate question and a separate measurement.
Who can actually measure it
Don’t go looking for a benchmark
Every brand that builds one of these asks the same question next: what’s a good number? For most of these metrics, there is no published answer, and the ones floating around trade decks are usually somebody’s client average dressed up as an industry standard.
Baseline against yourself instead, two ways. Against your own prior periods, so you’re measuring direction. And across your own markets, so you’re measuring variance between distributors under roughly comparable conditions. Market-to-market comparison is the more powerful of the two, because it controls for your brand, your pricing, and your portfolio, and it produces the single most useful sentence you can say in a business review: this works in Colorado and it doesn’t here, so let’s talk about why.
The quarterly review agenda
The structural fix for a bad review is that nobody sees the numbers for the first time in the room.
A review that produces decisions
Send ahead: the scorecard with your method written out, the account-level detail behind any red metric, and the two or three questions you want answered. Bring to the room: the market-versus-market comparison, and photographic or observational evidence for anything you’re claiming about a shelf. Evidence changes the conversation from opinion to logistics.
What a good answer sounds like: “Those eleven accounts went void when the chain reset in March, we didn’t catch it, here’s who’s calling on them and by when.” Specific, accepts the fact, produces an owner. What an evasive answer sounds like: reframing to depletions, disputing your data without offering better data, or attributing everything to category softness. Category softness is real, and it’s testable. If the category is soft, your competitors lost shelf space too, which is exactly what competitor shelf tracking is for.
Do this without becoming the difficult supplier
Two things are true at once. You need this measurement, and your distributor is almost certainly not concealing anything. They can’t see the shelf either. Their systems were built to move cases through a warehouse, and they do that well. Asking them to report on-shelf conditions is asking for data their operation never collects.
That reframes the whole exercise. Independent shelf measurement isn’t an audit of your distributor. It’s a shared instrument, and the distributor’s sales team is usually the biggest beneficiary, because a prioritized list of eleven specific accounts with a specific problem is a far better use of a rep’s Tuesday than a general instruction to push harder. Share the worklist. Give them credit when execution improves. Grade the trend, not the snapshot.
There’s also a hard practical reality worth knowing before anyone drafts a strongly worded email. Many states have beer franchise laws, and a smaller group extend similar protections to wine and spirits, which generally means a supplier needs good cause plus written notice and often a defined cure period before terminating a wholesaler (SevenFifty Daily’s overview, written by practicing alcohol-beverage attorneys, is the clearest plain-language walkthrough; Christopherson Brew Law’s state table shows the statutory good-cause language state by state). The specifics vary enormously and this is genuinely counsel territory, so verify your states. The practical takeaway: in most markets your real lever is a better shared fact base, not a threat.
Where to start with no independent data at all
Pick one market and one metric. We’d pick effective distribution, because it’s the one where the gap between the report and the shelf is usually widest and the finding is hardest to argue with.
Get your authorized-account list from the distributor. Measure which of those accounts are actually stocking you. Then put the two lists side by side in front of the person who owns that market. That single comparison has restarted more useful distributor conversations than any dashboard we’ve built. Once it lands, the next metric funds itself. Then scale the same one-market method sideways rather than trying to stand up all eight at once.
What we’d recommend
Build the scorecard in the order the data is available to you, not in the order the metrics look impressive. Four distributor-reported metrics you actually reconcile beat eight aspirational ones with no inputs behind them. Then add independent measurement one metric at a time, starting with effective distribution, because that’s where the plumbing gap and the revenue gap overlap most.
And don’t do this at all below a certain scale. If you’re in two markets with a few hundred accounts, your national sales director can call the accounts. The scorecard earns its cost when you’ve got more markets than you can hold in your head and you’re spending real money on programmes you can’t verify. That’s the threshold, not a revenue number.
Tell us what your distributor reporting looks like today, which markets are dark, and which review is coming up, and we’ll give you a straight answer on what’s measurable and what isn’t. We work with beverage-alcohol brands and distributors on exactly this reconciliation problem, and Out of Stock Reports is where most of these engagements start.