Understanding Measures of

Distribution

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This overview explores three
measures of distribution coverage:
 Numeric Distribution
 All Commodity Volume
 (Product) Category Volume

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Numeric Distribution
 Measure: Numeric distribution
 the percentage of stores that stock a given
SKU or brand compared with the universe
of stores in the relevant market.
 Use: How many physical stores are
involved in your supply chain? This has
implications for delivery systems and cost
of servicing.

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Calculating Numeric Distribution
Outlet All sales All Madre’s Padre’s
tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Store 1 $100,000 $1000 12 ct, 24 ct 12 ct, 24 ct
Store 2 $75,000 $500 12 ct 24 ct
Store 3 $50,000 $300 12 ct, 24 ct none
Store 4 $40,000 $400 none 12 ct, 24 ct

Numeric distribution: the percentage of stores that stock a given

SKU or brand compared the universe of stores in the relevant market
The numeric distribution of Madre’s brand tortillas would be:
Numeric distribution = (stores carrying Madre’s)/(total # of stores)
Numeric distribution = (3)/(4) = 75%
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Calculating Numeric Distribution
Outlet All sales All Madre’s Padre’s
tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Store 1 $100,000 $1000 12 ct, 24 ct 12 ct, 24 ct
Store 2 $75,000 $500 12 ct 24 ct 2

Store 3 $50,000 $300 12 ct, 24 ct none stores

Store 4 $40,000 $400 none 12 ct, 24 ct

What is the numeric distribution of the 12 ct pack of Padre’s tortillas?

(Click anywhere for answer)
The numeric distribution of the 12 ct pack of Padre’s brand tortillas:
Numeric distribution = (stores carrying 12 ct Padre’s)/(total # of stores)
Numeric distribution = (2)/(4) = 50%
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All Commodity Volume
 Measure: % All Commodity Volume (% ACV)
 the percentage of stores stocking an SKU or
brand, weighting each stocking-store by the
percentage of that store’s sales in All Categories.
 Use: ACV is a better measure of the total traffic
that goes through the stores that stock your
product or brand. It does not say anything directly
about how well those stores merchandise and
compete in the relevant product category.

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Calculating % ACV
Outlet All sales All Madre’s Padre’s
tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Store 1 $100,000 $1000 12 ct, 24 ct 12 ct, 24 ct
Store 2 $75,000 $500 12 ct 24 ct
Store 3 $50,000 $300 12 ct, 24 ct none
Store 4 $40,000 $400 none 12 ct, 24 ct

ACV: the percentage of stores stocking an SKU or brand, weighting each

stocking-store by the percentage of that store’s sales in all categories
The % ACV of Madre’s brand tortillas would be:
% ACV = (total sales of stores carrying Madre’s)/(total sales all stores)
% ACV = ($100k + $75k + $50k)/($100k + $75k + $50k + $40k) = 84.9%
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Calculating % ACV
Outlet All sales All Madre’s Padre’s
tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Store 1 $100,000 $1000 12 ct, 24 ct 12 ct, 24 ct
Store 2 $75,000 $500 12 ct 24 ct these

Store 3 $50,000 $300 12 ct, 24 ct none stores

Store 4 $40,000 $400 none 12 ct, 24 ct

What is the % ACV of the 12 ct pack of Padre’s tortillas?

(Click anywhere for answer)
The % ACV of the 12ct pack of Padre’s brand tortillas would be:
% ACV = (total sales of stores carrying 12ct Padre’s)/(total sales all
stores)
% ACV = ($100k + $40k)/($100k + $75k + $50k + $40k) = 52.8% 8
Product Category Volume
(note, this term is NOT an industry standard)
 Measure: % Product Category Volume (% PCV)
 represents the share of category sold by the stores
that stock your brand.
 Use: When this measure is available, it is good
indication of the market share to which your brand
is exposed. Often marketers use ACV as a rough
surrogate for PCV.

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Calculating % PCV
Outlet All sales All Madre’s Padre’s
tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Store 1 $100,000 $1000 12 ct, 24 ct 12 ct, 24 ct
Store 2 $75,000 $500 12 ct 24 ct
Store 3 $50,000 $300 12 ct, 24 ct none
Store 4 $40,000 $400 none 12 ct, 24 ct

PCV: the percentage share of category sold by the stores that stock the brand

The % PCV of Madre’s brand tortillas would be:

% PCV = (tortilla sales of stores carrying Madre’s)/(tortilla sales all stores)
% PCV = ($1000 + $500 + $300)/($1000 + $500 + $300 + $400) =
81.8%
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 Calculating % PCV
Outlet All sales All Madre’s Padre’s
tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Store 1 $100,000 $1000 12 ct, 24 ct 12 ct, 24 ct
Store 2 $75,000 $500 12 ct 24 ct these

Store 3 $50,000 $300 12 ct, 24 ct none stores

Store 4 $40,000 $400 none 12 ct, 24 ct

What is the % PCV of the 12 ct pack of Padre’s tortillas?

(Click anywhere for answer)
The % PCV of the 12ct pack of Padre’s brand tortillas would be:
% PCV = (tortilla sales of stores carrying Padre’s 12ct)/(tortilla sales all stores)
% PCV = ($1000 + $400)/($1000 + $500 + $300 + $400) = 63.6%
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Store versus Brand Measures
 Often marketers refer to a grocery chain’s
ACV. This may be either a dollar number
(the chain’s total sales of all categories in
the relevant geographic market) or a
percentage number (their share of dollar
sales among the universe of stores). A
brand’s ACV is simply the sum of the
chains’ ACV that stock their brand.

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 Working with Chains…
Outlet # of All chain All Madre’s Padre’s
Stores sales tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Chain 1 25 $1,000,000 $10,000 12 ct, 24 ct 12 ct, 24 ct
35
Chain 2 12 $750,000 $5,000 12 ct 24 ct
stores
Chain 3 10 $500,000 $3,000 12 ct, 24 ct none
Chain 4 20 $300,000 $4,000 none 12 ct, 24 ct
What is the numeric distribution of the 24ct pack of Madre’s tortillas?
(Click anywhere for answer)
The numeric distribution of the 24 ct pack of Madre’s brand tortillas:
Numeric distribution = (stores carrying 24 ct Madre’s)/(total # of stores)
Numeric distribution = (25 + 10)/(25 + 12 + 10 + 20) = 52.2%
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 Working with Chains…
Outlet # of All chain All Madre’s Padre’s
Stores sales tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Chain 1 25 $1,000,000 $10,000 12 ct, 24 ct 12 ct, 24 ct
Chain 2 12 $750,000 $5,000 12 ct 24 ct
Chain 3 10 $500,000 $3,000 12 ct, 24 ct none
Chain 4 20 $300,000 $4,000 none 12 ct, 24 ct
What is the % ACV of Chain 1?
(Click anywhere for answer)
The % ACV of Chain 1 is calculated as:
% ACV = (Chain 1 total sales)/(total sales all chains)
% ACV = ($1,000,000)/($1,000,000 + $750,000 + $500,000 + $300,000)
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% ACV = 39.2%
 Working with Chains…
Outlet # of All chain All Madre’s Padre’s
Stores sales tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Chain 1 25 $1,000,000 $10,000 12 ct, 24 ct 12 ct, 24 ct
Chain 2 12 $750,000 $5,000 12 ct 24 ct
Chain 3 10 $500,000 $3,000 12 ct, 24 ct none
Chain 4 20 $300,000 $4,000 none 12 ct, 24 ct
What is the % PCV of Chain 1?
Often marketers refer to a chain’s market share in a
specific category. This is equivalent to the chain’s %
(Click anywhere for answer)
The % PCV of Chain 1 is calculated as:
PCV, as defined earlier. A brand’s PCV is the sum of
% PCV = (Chain 1 tortilla sales)/(total tortilla sales all chains)
the chains’ % PCV that stock the brand.
% PCV = ($10,000)/($10,000 + $5,000 + $3,000 + $4,000) = 45.45%
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 Working with Chains…
Outlet # of All chain All Madre’s Padre’s
Stores sales tortilla tortillas SKUs tortillas SKUs
sales stocked stocked
Chain 1 25 $1,000,000 $10,000 12 ct, 24 ct 12 ct, 24 ct
Chain 2 12 $750,000 $5,000 12 ct 24 ct
Chain 3 10 $500,000 $3,000 12 ct, 24 ct none
Chain 4 20 $300,000 $4,000 none 12 ct, 24 ct
Comparing
The ratio is a specific
greaterchain’s
than 1.% ACV
Thus,(overall
Chainshare) with its % PCV
1 is performing
(market share of abetter
comparatively category) gives
in the insights into
particular whethercategory
product the chain in
is above
or below average
question in selling
than the otherachains.
particular category compared to other
categories in which it competes.
% PCV Chain 1 = 45.45%, % ACV Chain 1= 39.2%
Chain 1 ratio of PCV to ACV = (45.45%)/(39.2%) = 1.16
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Out-of-Stocks
 Being “listed” by a chain means that the
headquarters buyer has “authorized” distribution
of the brand/SKU at the store level.
 For various reason, being listed does not always
ensure presence on the shelf. Local managers may
not approve “distribution” or the product may be
distributed, but “out-of-stock.”
 Out-of-stocks are often expressed as a percentage.
Be careful to note whether the percentage is
numeric, ACV, PCV, or percentage of distributing
stores for a given chain.

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Calculating PCV Net of Out-of-Stocks
Outlet # of All chain All Madre’s Avg. Out-of-
Stores sales tortilla tortillas SKUs Stocks for
sales stocked Madre’s SKUs
Chain 1 25 $1,000,000 $10,000 12 ct, 24 ct 5%
Chain 2 12 $750,000 $5,000 12 ct 10%
Chain 3 10 $500,000 $3,000 12 ct, 24 ct 12%
Chain 4 20 $300,000 $4,000 none none
What is the PCV Net of Out-of-Stocks of Madre’s tortillas?
The PCV Net of Out-of-Stocks will be the sum of the % PCV of each chain multiplied
by (1-% OOS)
% PCV Chain 1 = (($10,000)/($22,000)) x (1-.05) = 43.2%
% PCV Chain 2 = (($5,000)/($22,000)) x (1-.10) = 20.5%
% PCV Chain 3 = (($3000)/($22,000))x (1-.12) = 12%
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PCV Net of OOS of Madre’s tortilla’s = 43.2% + 20.5% + 12% = 75.7%