The food and drink operations glossary

This glossary explains the operations terms challenger food and drink brands meet once they sell to retailers, wholesalers and 3PLs. Each entry gives a one-line, plain-English definition, from purchase orders and EDI to FEFO, GLNs, bills of materials and shadow materials. Live entries link to a full page with examples.

Last updated: 16 October 2026

Which terms does the glossary cover?

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3PL Coming soon
 A third-party logistics provider that stores your stock and picks, packs and ships your orders.

B

Batch or lot number
The code printed on a product that ties it to one production run, so you can trace and recall it.
BBE vs use-by Coming soon
 A best-before (BBE) date is about quality, while a use-by date is about safety and is the last day the food is safe to eat.
BOM (bill of materials)
The recipe for one unit of a product: every ingredient, packaging item and quantity it takes to make it.
BRC (BRCGS) Coming soon
 The BRCGS Global Standard for Food Safety, a certification many UK retailers ask their manufacturers to hold.

C

Case vs unit Coming soon
 A unit is the single item a shopper buys; a case is the outer box of units that a retailer or wholesaler orders.
COGS software for food brands
Software that works out what each product actually costs to make, from ingredients, packaging, labour and co-packer fees, so you know your true margin.
Co-packer or co-manufacturer Coming soon
 A manufacturer that makes your product for you, to your recipe and under your brand.
Co-packer ERP
Operations software that tracks the materials you send to a co-packer, the fees you pay and the inputs it buys for you, so you can cost every SKU wherever it's made.

D

Delivery note Coming soon
 The document that travels with a delivery and lists what's in it, often with batch codes and use-by dates for the receiving depot.

E

EDI (electronic data interchange) Coming soon
 The standard format UK retailers use to send purchase orders and receive invoices electronically, usually through a hub such as TrueCommerce.

F

FEFO (first expired, first out)
A picking rule that sends the stock with the earliest use-by date out first.
FIFO (first in, first out) Coming soon
 A picking rule that sends the stock you received first out first.
Fill rate Coming soon
 The share of the quantity a customer ordered that you actually delivered.

G

GLN (Global Location Number) Coming soon
 A 13-digit GS1 number that identifies a location, such as a retailer's depot, on a purchase order.
GTIN (Global Trade Item Number) Coming soon
 The GS1 barcode number that identifies a product at unit, case or pallet level.

L

Landed cost
What an item costs once it reaches your warehouse, including haulage, duty and other charges on top of the supplier's price.

M

Minimum shelf life Coming soon
 The shortest remaining life a customer will accept on delivery, often set as a percentage of total shelf life.
MOQ (minimum order quantity) Coming soon
 The lowest quantity a supplier will accept on a single order.
MRP (material requirements planning)
A method that uses your bills of materials, stock and demand to work out which materials to order, how much and when.

O

Order management software for food brands
Software that captures orders from every channel, matches them to each customer's products and prices, and carries them through picking, delivery and invoicing.
Order normalisation
Turning orders that arrive as PDFs, spreadsheets, emails and EDI into one standard format, matched to your customers, depots, products and prices.
OTIF (on time in full) Coming soon
 The share of orders delivered on the agreed date with the full quantity ordered.

P

PO (purchase order) Coming soon
 The document a customer sends to order your products, or that you send to order from a supplier.

S

SALSA Coming soon
 Safe and Local Supplier Approval, a UK food safety certification scheme built for growing producers and often a step before BRCGS.
Safety stock
The extra stock you hold to cover swings in demand and supplier lead time, so you don't run out before the next delivery lands.
Shadow materials
Inputs your co-packer sources and bakes into its price, which you track for cost but don't buy yourself.

Which entries should I start with?

Start with these five. They cover what breaks first when a brand outgrows its spreadsheets. Then work through FEFO, batch numbers, BOMs, landed cost, MRP and safety stock, each with a free calculator where it helps. → Free tools

What is order normalisation?

Why every customer's PO looks different, and how software makes them look the same. → Order management

What are shadow materials?

How to benchmark your co-packer's price when it buys some inputs for you. → COGS & margins

What is a co-packer ERP?

What to track when someone else makes your product. → Brand and co-packer hybrid

What is COGS software for food brands?

Costing recipes at what you actually paid for each batch.

What is order management software for food brands?

What it should do beyond a Shopify order screen.

Frequently asked questions

What's the difference between FEFO and FIFO?

FEFO sends out the stock with the earliest use-by date first. FIFO sends out the stock you received first. For food with use-by dates, FEFO protects you from shipping a short-dated batch to a retailer with a minimum shelf-life rule. → Inventory

What's a GLN on a purchase order?

A GLN is a 13-digit number that identifies a delivery location, such as a specific retailer depot. Pesto uses the GLN first to match an order to the right depot, then the postcode, then the address.

What's the difference between best before and use-by?

Best before (BBE) is about quality: food is still safe after the date but may not be at its best. Use-by is about safety: food shouldn't be eaten after it.

Will you add more terms?

Yes. We're writing full pages for every term marked "coming soon". If you'd like a term added, tell us on your demo or drop us a line.

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