Velocity

Velocity is the rate at which a SKU sells through a single store, usually expressed in units per store per week (SPW) or dollars per store per week. It is the single most important commercial metric in CPG retail and the number every category manager looks at first.

Velocity matters because shelf space is finite. A retailer comparing two items will keep the one with higher velocity and cut the other in the next reset, regardless of the brand's marketing story. Distribution without velocity is a delayed delist.

What "good" velocity looks like is category-dependent. A premium frozen entree at 1.5 units per store per week is healthy. A mass-market salty snack at 1.5 is anemic. Category benchmarks live in syndicated data (Circana, NielsenIQ, SPINS) that hiring CPG companies pay heavily for.

Three levers move velocity: (1) trial — getting first-time buyers to try the product, usually through promotion or sampling; (2) repeat — getting triers to come back, which is mostly product quality and brand fit; (3) household penetration — expanding the buyer base, which is marketing and PR work.

A pattern to recognize: a brand with rising distribution AND falling velocity is in trouble. They are picking up doors faster than they are earning shelf at those doors. The metric to watch is velocity per point of ACV, which corrects for distribution growth.

Roles where this matters: Sales, Trade Marketing, Brand Marketing, Category Management.