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Managing trade spend in the foodservice channel means navigating a vocabulary that's distinct from retail — and consequential. A GPO rebate is not the same as a bill-back. A broadliner is not the same as a specialty distributor. A brand that conflates these terms in their contracts, their deduction management workflow, or their sales conversations will pay for it.
This glossary defines the terms CPG finance and sales teams encounter most frequently in foodservice trade management. Where terms are related, we've cross-referenced them.
Away from home (AFH) is the broad industry term for food and beverage consumed outside the home — encompassing restaurants, hotels, hospitals, schools, corporate cafeterias, stadiums, and any other setting where food is prepared and served rather than purchased for home preparation.
AFH is often used interchangeably with "foodservice," but the terms aren't identical. AFH is a consumption occasion descriptor — it tells you where the food is eaten. Foodservice is a channel descriptor — it tells you how the product reaches the consumer. A CPG brand selling to Sysco is selling through the foodservice channel; the product is ultimately consumed away from home. In practice, both terms appear in industry reporting, and most manufacturers use them interchangeably. When precision matters — typically in syndicated data or investor reporting — clarify which definition is being used.
Related terms: Broadliner, Operator, Indirect Distribution
A broadliner is a full-line foodservice distributor that carries a wide range of products across categories — proteins, dairy, produce, dry goods, beverages, and supplies — and distributes them to operators across a broad geographic territory. The term refers to the breadth of their SKU catalog, as opposed to specialty distributors who focus on specific product categories or geographies.
The largest broadliners in the United States are Sysco, US Foods, and Performance Food Group (PFG). Gordon Food Service (GFS) is the largest private broadliner. For most CPG brands entering the foodservice channel, broadliners are the primary distribution partner — they provide access to the widest operator base through a single relationship, at the cost of significant pricing power and complex deduction workflows.
Because broadliners carry products from hundreds of manufacturers, they operate at scale and apply that scale in their negotiations: rebates, deviated pricing agreements, and local marketing programs are all standard parts of the broadliner relationship.
Related terms: Specialty Distributor, Indirect Distribution, Bill-Back, Deviated Pricing
In foodservice, direct distribution refers to a CPG brand selling product directly to an operator — a restaurant chain, hospital system, or hotel group — without a distributor in the middle. This structure is less common and typically only viable for large operators with enough purchasing volume to justify the logistics.
Indirect distribution is the norm: the brand sells to a distributor (such as Sysco or US Foods), who in turn sells to the operator. The brand's relationship with the operator is commercial and contractual — negotiating pricing, programs, and GPO agreements — but the physical product and the invoice flow through the distributor.
This distinction matters enormously for trade management. In a direct model, the brand has clear line-of-sight to the operator's purchase volume. In an indirect model, the brand depends on distributor data — depletions, ship-tos, and backup documentation — to understand what's actually reaching which operator and at what price. This is the root cause of most foodservice deduction complexity.
Related terms: Broadliner, Operator, Deviated Pricing
In foodservice, an operator is the business that purchases food and beverage product from a distributor to prepare and serve to end consumers. Operators include restaurants (both independent and chain), hospitals and healthcare systems, hotels, universities, K-12 schools, corporate cafeterias, stadiums, and cruise lines.
The operator is the end customer for CPG manufacturers in the foodservice channel — the entity whose purchasing behavior drives volume, and with whom brands may negotiate direct contracts for preferred pricing. However, because most operators purchase through a broadliner or specialty distributor rather than directly from the manufacturer, the brand often has limited direct visibility into what an operator is buying, at what price, and at what volume.
Understanding the operator landscape — which GPOs they belong to, which distributors they use, what their volume thresholds are — is prerequisite knowledge for managing foodservice trade spend effectively.
Related terms: GPO, Deviated Pricing, Direct vs. Indirect Distribution
A specialty distributor focuses on a specific product category, geography, or operator segment rather than carrying a full product line across all categories. Examples include produce-only distributors, protein specialists, ethnic food distributors, and regional distributors serving a specific metro area or operator type (fine dining, healthcare, education).
For CPG brands, specialty distributors serve a different role than broadliners. They often provide deeper category expertise, stronger relationships within a specific operator segment, and access to accounts that broadliners don't prioritize. The tradeoff is narrower reach.
Brands managing foodservice trade spend across multiple distributor types — both broadliners and specialty distributors — face added complexity: each distributor may have distinct rebate structures, backup documentation formats, and deduction submission processes.
Related terms: Broadliner, Indirect Distribution
A bill-back is a trade promotion structure in which a CPG brand agrees to reimburse a distributor for a promotional allowance after the product has already been sold to the operator, rather than reducing the price at the point of invoice. The distributor sells to the operator at the promotional price or passes through a negotiated discount, then submits a claim to the brand for the difference.
Bill-backs are the dominant deduction mechanism in foodservice trade management. They are fundamentally different from the off-invoice discounts common in retail: in a retail off-invoice structure, the promotional price is applied at the point of sale and the deduction appears immediately. In a foodservice bill-back, the transaction happens at list price, and the rebate claim arrives separately — sometimes weeks or months later — with backup documentation the brand must validate against the original contract.
This time gap, combined with the multi-party structure (brand, distributor, operator, and sometimes GPO), is why foodservice deduction management is significantly more complex than its retail equivalent.
Related terms: Off-Invoice, Deviated Pricing, Deduction Management
A depletion allowance is a promotional reimbursement paid by a CPG brand to a distributor based on the volume of product "depleted" — sold through from the distributor to operators — during a defined promotional period. The brand agrees to pay a set allowance per case or per unit depleted, and the distributor submits a depletion report as backup for the claim.
Depletion allowances are common in beverage and spirits foodservice trade programs, where brands fund distributor incentives tied to operator placements or volume targets. Validating a depletion allowance claim requires the brand to confirm that the reported volume aligns with actual purchase orders, that the operator accounts listed in the depletion report are real and active, and that the time period matches the contracted program window.
Without a system that connects depletion reports to the original contract, validating these claims is manual, time-consuming, and error-prone.
Related terms: Bill-Back, Broadliner, GPO
Deviated pricing is a foodservice pricing structure in which a CPG brand negotiates a price below their standard list price with a specific operator, while the product continues to flow through a distributor who purchases at list price. The brand then reimburses the distributor for the difference — the "deviation" — between the list price and the lower price the operator was charged.
Example: A brand's list price for a SKU is $20/case. The brand negotiates a $16/case price directly with a national restaurant chain. The chain's Sysco broadliner buys the product at $20/case and sells it to the chain at $16/case. The brand reimburses Sysco $4/case for each case sold to that chain.
Deviated pricing creates a significant tracking challenge: the brand must know which operators have active deviated pricing agreements, which distributors are serving those operators, what the approved deviation amount is, and whether the right price was actually passed through. Discrepancies between the agreed deviation and the claimed deviation — or reimbursements flowing to the wrong distributor — are a primary source of overpayment in foodservice trade management.
Related terms: Bill-Back, GPO, Double Dipping
A Group Purchasing Organization (GPO) is an entity that aggregates the purchasing power of multiple operators — hospitals, restaurants, hotels, educational institutions — to negotiate preferred pricing and rebates with CPG manufacturers on their members' behalf. Rather than each operator negotiating individually, GPO members benefit from the volume leverage of the collective.
Major GPOs in the United States include Vizient (primarily healthcare), Foodbuy (the largest GPO by revenue, serving hospitality, healthcare, and corporate dining), Compass One (serving corporate and healthcare operators), Sodexo, and Aramark. Each GPO has its own member network, rebate structure, and submission process.
For CPG brands, a GPO agreement operates independently of any direct operator contracts or distributor relationships. This independence is the structural origin of double dipping: a brand may have a direct agreement with an operator and a GPO rebate covering that same operator's purchases, with neither team aware of the overlap. Tracking GPO membership by operator — knowing which of your accounts belongs to which GPO — is foundational to preventing overpayment.
Related terms: Double Dipping, Deviated Pricing, Operator
Off-invoice is a promotional pricing structure in which a trade discount is applied directly at the point of sale — the promotional price is built into the invoice, rather than being claimed after the fact through a bill-back or rebate. The distributor or retailer pays the reduced price from the outset, and no separate reimbursement claim is submitted.
In retail, off-invoice is common: a brand offers a retailer $2.00 off per case for a promotional period, and that $2.00 is simply deducted from the invoice at the time of purchase. In foodservice, off-invoice structures exist but are less prevalent than bill-backs. The multi-tier nature of foodservice distribution — where the brand sells to a distributor who sells to an operator — makes off-invoice pricing more complex to administer across the full chain.
Understanding the distinction between off-invoice and bill-back matters for deduction management: off-invoice promotions typically don't generate a separate deduction claim, while bill-backs always do.
Related terms: Bill-Back, Deviated Pricing
Double dipping in foodservice trade management occurs when a CPG brand pays a promotional allowance or rebate twice for the same product sold to the same operator — once through a direct agreement with that operator, and again through a Group Purchasing Organization (GPO) to which the operator belongs.
The mechanics: a brand negotiates a direct promotional discount with a restaurant chain. Separately, that chain is a member of a GPO (such as Foodbuy) that has its own rebate agreement with the same brand. When the quarter closes, both the direct discount and the GPO rebate are submitted as valid claims — referencing the same product and the same operator volume. Without a unified view of all active agreements, both claims get processed and the brand pays twice.
Double dipping is a structural problem, not a fraud problem. It occurs because GPO contracts, distributor agreements, and direct operator deals are negotiated by different teams, stored in different places, and processed at different times. Prevention requires storing all three contract types in one system, maintaining operator-to-GPO mapping, and implementing exception-based validation before any claim is paid. For a deeper look at how it happens and how to prevent it, see our post on double dipping in foodservice rebates.
Related terms: GPO, Deviated Pricing, Bill-Back
These terms form the foundational vocabulary of foodservice trade management. For CPG brands managing trade spend across both retail and foodservice, understanding how each of these mechanisms works — and how they interact — is the prerequisite for building a deduction management process that doesn't leak money.
For a practical walkthrough of the foodservice deduction management workflow, see How CPG Brands Manage Foodservice Deductions.
For a complete overview of how Vividly handles GPO contracts, deviated pricing, and distributor-level deduction management in one platform, visit our foodservice trade management page.
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