Based on the Vdriven Masterclass presented by Luke Abbott
Every emerging CPG founder remembers the day the buyer finally said yes. It feels like the finish line. It isn't — it's the starting gun.
Distribution is the entrance to the arena. Velocity is the fight. Getting on shelf only earns you the right to compete — what happens after that first shipment determines whether your brand expands into new doors and regions, or quietly disappears at the next category review. In a recent Vdriven masterclass, Luke Abbott laid out a complete operating system for winning that fight. Here's the playbook.
Start With the Core — Before You Spend a Dollar on Marketing
Abbott's framework, built in 2019, starts from a simple premise: get the core right before you spend a dollar on marketing. Everything a brand does at retail — merchandising, social, placement dollars, brokers, PR, promotions, demos — is an amplifier. If the business model underneath is broken, amplifiers just make the problem louder and more expensive.
The Core Business Model targets one number: minimizing spend per retail unit sold. Five things have to be in place first:
- Right product, right time. Built on real market demand, not trend-chasing. The right product gets sought out; you don't chase customers.
- Optimized COGS. A few cents of cost becomes a dollar-plus at retail through the distribution chain.
- Correct retail pricing. Balance the retailer's revenue needs against your own margin goals.
- Reliable production. Your co-manufacturer has to scale as reliably as you do.
- Effective branding and packaging. You get about three seconds on shelf to answer: Can I see it? Do I know what it is? Why should I buy it?
The COGS point deserves emphasis, because a small change in cost doesn't stay small: a 25-cent increase in COGS becomes roughly a dollar on the shelf price once distributor and retailer margins stack on top. And fixing the core early is far cheaper — every dollar invested in getting the core right is roughly four times cheaper than the spend it takes to make up for getting it wrong. Get it wrong, and high COGS forces a price that kills velocity or your cash, margins are too thin to fund growth, and you buy velocity back with trade spend, quarter after quarter.
Velocity Is Your Report Card
Once you're on shelf, the only number the shelf reports is velocity: units sold per store per week (USSW). One hundred stores selling 400 units per week chainwide is a 4.0 USSW. Every retailer has a velocity floor — dip below it and you're a discontinuation candidate; clear it with room to spare and you earn facings, secondary placements, and expansion.
So before planning a single promo, ask your category manager: "What is your target velocity for a brand in this set?" Most will tell you. Then verify against real competitive data in SPINS — a friendly CM sometimes hands you an aspirational number, not a benchmark. Running promos without a target velocity is an experiment with no definition of success.
And the shelf grades in dollars, not just units. A promo-heavy product at $4.99 moving 4.0 units per store per week generates $19.96 in dollar velocity; a price-disciplined product at $7.99 moving 3.0 units generates $23.97 — and wins the set review on fewer units, because the category manager's math is dollars per linear inch of shelf. Overusing price reductions can raise unit velocity while shrinking dollar velocity — counterproductive at the shelf and on your P&L.
The Goal of Every Promo Is a Permanently Higher Baseline
Structured well, promotions compound. Abbott walked through a brand that launched at a 4.1 USSW baseline and ran four well-built promos in year one. After each event the baseline reset higher — 5.4, 6.2, 7.1, then 7.9 — a 93% increase in year one, same stores, same shelf. Each promo converted trial into habit, and the habit became the new floor. That's the test of every promotion: did it permanently raise the baseline, or spike and snap back?
The year-one cadence: don't promote in month one — get the supply chain perfect, confirm fills, and gather clean launch velocity data. Then promote in months two, four, six, nine, and eleven — one price point per event, so each promo is a clean test. That's 18–24 promoted weeks, deliberately front-loaded, because trial is your scarcest resource in year one. And ride the seasons: in natural, the best windows are January–February "new year, new you" and late-August back-to-school.
Demos, Promo Prices, and Everyday Price — All Testable
A $200 in-store demo either pays or it doesn't, and four rules decide which. Demo only the top 20% of stores — a slow-store demo is a donation. Choose weekends, when traffic runs two to three times weekday levels. Confirm the product is actually on shelf — a demo for a product the distributor never filled returns exactly zero. And hit the same stores two weekends in a row: one exposure is advertising, two is the start of a habit. The highest-ROI hour in CPG is still the founder behind the demo table.
Promo pricing should be tested, not guessed — and deepest isn't best. One plant-based organic brand with a $3.49 SRP tested six promo price points over year one. The winner was "2 for $6" — an effective $3.00 per unit, only 50 cents off SRP. The two-unit purchase turned trial into stocking: shoppers took two units home, giving the habit two chances to form, and those buyers came back at full price. The optimal promo price converts the most trial into repeat purchase, not the most units into carts.
The same logic applies to everyday price. In a protein-bar case — goal SRP $2.99, competitive set $3.29–$3.79 — $2.99 maximized retailer revenue, $3.49 still converted comfortably, and $3.79 maximized the brand's margin dollars per store per week despite lower unit velocity. The lesson: test high first. As long as velocity exceeds the category manager's goals, the higher retail wins. You can always come down; going up is much harder.
Finally, know the difference between earned and bought velocity. Earned velocity builds a baseline: a community that exists before launch (the number-one predictor of success), authentic influencers who already shop where you sell, founder-led demos, free-product offers, and reviews syndicated back to the retailer's site. Bought velocity rents a number: broad-reach ads that evaporate after a month, digital coupons that need 35–50% off before shoppers bother to clip, and attribution stories that deserve skepticism. Renting an audience is not building a community.
Trade Spend Is a Portfolio, Not a Budget
You don't have a trade-spend budget. You have a portfolio — and every dollar should report a return.
Start with mechanics, because the mechanic determines the cost before the promo even runs. An off-invoice (OI) discount to the distributor covers a four-to-six-week buy window but invites bridge buying — the distributor stocks up cheap and your reorders go quiet for months. Use it at most once a year unless your shelf life is under six months. A manufacturer charge-back (MCB) targets specific retailers and kills bridge buying, but comes back billed at 40–45% above your landed cost plus an 8% processing fee. A scan-back charges you only for units that actually scan at the register at promo price: no bridge buying, no markup, clean store-level data. If the retailer will process a scan-back, always take it.
The difference is real money. In one launch — 178 stores, 3 SKUs, one free-fill case per store — processing the free fill as an MCB cost $15,486; as a scan-back, the identical commitment cost $10,680. That's $4,806 saved on one promo, and the conversation took one meeting. If you never ask, you never get it.
RORAS: The Number That Grades Every Promo
To grade trade spend like an investor, Abbott uses RORAS™: incremental margin divided by trade dollars. Two promos, same brand, 200 stores, same 4.1 USSW baseline. Promo A — $1 off, off-invoice — delivered a 40% lift and 10% post-promo hold on $8,200 of spend, returning $2,560 of incremental margin: a RORAS of 0.31. You spent a dollar and got back 31 cents; you paid for sampling. Promo B — $2 off, scan-back, DC fully stocked, no competitor overlap — delivered an 81% lift and 25% hold on $10,560, returning $13,200: a RORAS of 1.25, plus a permanently higher baseline. Four times the margin per dollar, despite the deeper discount and bigger spend.
And higher lift isn't better RORAS. A year-four snack brand tested four mechanics head-to-head: a $1 TPR plus 20 demos ($4,500 spend) bought the most units but returned a RORAS of just 1.1, while a 50-cent TPR plus digital coupon ($335 spend) returned 8.2. The deepest spend bought the most units — and the worst return.
For mature brands, growth often starts with subtraction. A year-eight brand with high ACV, flat sales, and margins stuck under 30% had trained shoppers to buy only on deal. By grading every retailer on RORAS — keeping a 3.2 and a 2.5, reworking a 1.8, cutting a 0.2 — it took promo spend from 30% of revenue to 12% with no meaningful drop in velocity.
Five inputs make RORAS operational: promo lift; post-promo hold (zero hold means you rented velocity); incremental dollars per dollar spent (above 1.0, the promo paid for itself); DC inventory going in (out-of-stocks during a promo advertise a deal nobody can buy); and competitive timing (two brands promoting at once split the lift — pull SPINS and shift your window if needed).
Channels Are a Sequence You Earn, Not a Ladder You Rush
Retail channels reward brands that arrive prepared. Stage one: own your region — farmers markets and local independents, where you iterate price and pack cheaply, in real time. Stage two: regional naturals — co-ops, INFRA independents, regional chains — where you build SPINS data and buyer skills where mistakes are forgiven. Stage three: national naturals — Sprouts, Whole Foods, Fresh Market — which require rising velocity, stable COGS, and a real community. Stage four: conventional and mass — Kroger, Target, club — with higher slotting, lower velocity, and brand-cachet risk. A destination you earn.
The geographic version of the rule: own SoCal before California, and California before the West Coast. Dense, rising velocity in one geography beats 500 doors across 20 states — high velocity in a few doors is a better story than low velocity everywhere.
Be honest about the cash curve at a national chain. Year one is an investment — break-even or a small loss, even with strong velocity, 45% product margin, and clean execution; budget for it and know your runway. Year two is stabilization: promo calendar built, deductions understood, COGS stable, and you learn your true unsupported baseline. Year three is when profit begins to emerge — if the core is right. That's the honest timeline. Remember, roughly 24 cents of every wholesale dollar goes to the distributor before promo spend.
Read Your Data Like a Category Manager
Buyers read your numbers, not your pitch deck. Eight SPINS metrics form the report card: dollars (the scoreboard), dollars % change (the growth signal buyers quote), units (separating real volume growth from price-driven growth), ARP % change (is "growth" just a price increase?), max % ACV (your distribution runway), TDP (SKUs × stores — your true shelf footprint), and the two that matter most: base velocity (turns with no promo support, the truest measure of demand) and base velocity % change (is unsupported demand growing?). The bottom two are the heartbeat. Read them first.
Three misreads get brands killed. "Revenue growth = health" — dollars can grow on price and promo while unit velocity quietly declines. "Promo lift = it worked" — lift buys volume, not customers; the only test that matters is the post-promo hold. "Added doors = growth" — low-velocity doors dilute your blended average. A brand can post +18% dollar sales while units grow just 4%, 55% of volume moves on promo, and post-promo velocity crashes below threshold — "winning" right up until the discontinuation call.
The same decomposition works on competitors. A rival that's "up 48%" year over year sounds unbeatable — until you find velocity down 8%, distribution flat, average price up 13%, and 90% of growth coming from new SKUs papering over an eroding base. That erosion is your opening: walk in with base-velocity momentum, the more sustainable story.
Read regions, not averages. In one illustrative table, the Pacific West ran 8.4 USSW at 71% ACV — a priority expansion market — while the Southeast ran 3.1 at 22% ACV — a trap. Prove velocity in strong markets before pushing into new ones.
Hunt voids monthly. A void is an authorized door that never ordered — or quietly stopped. Pull POS zero-sales against your authorized store list, cross-check distributor ship-out reports, and fix gaps with a merchandising memo and broker follow-up. In one launch, a distributor ops issue quietly kept a new SKU out of 42% of launch stores; distributor data flagged it in week two, and escalation pushed stocking from 58% to 97% of stores by week five. The cheapest velocity you'll ever add is in the doors you've already won.
Then make it a ritual: a monthly three-hour deep dive. Pull SPINS, retailer portals, and KeHE CONNECT/UNFI feeds; segment by retailer, region, SKU, and promo versus non-promo — the story lives in the segments; diagnose what the data is actually saying, not what you want to hear; then make one decision each on where to invest, pull back, and fix, with an owner and a deadline. And write down decision triggers in advance: base velocity declining means no new doors until you understand why; three straight promos that snap back mean the strategy changes; distributor weeks-of-supply above ten means revising purchase orders.
The Poppi Test: Is It a Marketing Problem — or a Core Problem?
The masterclass closed with Poppi. In 2018, Mother Beverage — an apple-cider-vinegar drink in craft glass bottles — landed $400K for 25% on Shark Tank. The liquid was great; the brand made shoppers work too hard. In 2020 it relaunched as Poppi: a prebiotic soda in a bright 12-ounce can, sold on flavor and occasion instead of ingredient education. In 2025, PepsiCo closed a $1.95 billion acquisition. As investor Rohan Oza put it: "Great liquid. Wrong brand." The breakthrough wasn't just the liquid — it was a clearer reason to choose, translated into a behavior shoppers already understood.
Buyers see this constantly. At Newtopia Now in August 2026, Whole Foods' Charlie New gave several emerging brands the same diagnosis through the buyer's lens of incrementality — does this bring new customers and dollars, or merely move sales within the set? One brand backed by special nectar and 130+ family farms looked, on shelf, like "another soda." Another's authentic real-brewed herbal story needed packaging that made the garden truth felt instantly. A third had real fruit as proof but needed flavor and occasion to lead. Same diagnosis every time: the differentiation existed — the shopper couldn't see it fast enough.
The principle underneath: occasion first, hero ingredient second. Shoppers don't buy an ingredient deck; they buy what a product replaces, when they'll consume it, and why it fits their life. Lead with the occasion, and let the hero ingredient be the reason to believe — not the headline.
Before you invest another dollar in velocity, run the Poppi–Charlie test:
- What behavior or occasion are we replacing?
- What is unmistakably different from 15 feet away?
- Why is this item incremental to the set?
- Can every ingredient, claim, and standard clear the retailer?
- Will flavor create repeat after the story creates trial?
A great product with an unclear reason to choose is not a marketing problem. It is a core problem. Fix it first, and everything else — every promo, every demo, every buyer meeting — becomes cheaper.
The Bottom Line
Getting on shelf is a milestone. Getting off shelf — into carts, week after week, at a price that funds your growth — is the business. Fix the core before you amplify it. Treat velocity as your report card and the post-promo hold as your true grade. Run trade spend as a portfolio. Earn each channel before you enter it. Read base velocity like a heartbeat. And make sure your reason to choose is visible from 15 feet away.
Because when you finally sit across from that category manager, data is your pitch. Walk in with evidence — not a favor to ask.
