F&B industry glossary
Definitions for 138 essential food and beverage business terms.
86'd
Culinary. Restaurant slang meaning an item has run out and is no longer available. 'We've 86'd the salmon' means kitchen has no more salmon to serve.
ABV (Alcohol By Volume)
Beverages. The standard measure of alcohol content in a beverage, expressed as a percentage of total volume — regulated and required on labels in most jurisdictions.
API Integration
Technology. In the F&B context, connections between POS, delivery platforms, inventory systems, and kitchen displays that share data automatically.
Allergen Declaration
Food Safety. The mandatory labeling of the 14 major allergens (nuts, dairy, gluten, shellfish, etc.) on food products, required by law in the EU, US, and most developed markets.
Appellation
Agriculture. A legally defined geographical indication for agricultural products, particularly wine and cheese (Champagne, Parmigiano-Reggiano), guaranteeing origin and production methods.
Aquifer
Agriculture. An underground layer of permeable rock holding groundwater — the source for many premium mineral water brands (Évian, FIJI, Perrier) and irrigation for agriculture.
Area Developer
Business & Finance. A franchisee who has purchased the exclusive right to develop multiple franchise units within a specific geographic territory over a defined period.
Average Check (Cover Average)
Business & Finance. Total revenue divided by number of guests served — a primary metric for measuring per-customer revenue in restaurants and cafes.
Backward Integration
Supply Chain. A strategy where a retailer or manufacturer acquires control of upstream suppliers — for example, a burger chain buying cattle ranches to secure beef supply.
Basket Size
Marketing. The total value of a single customer transaction — increasing basket size through upselling and cross-selling is a fundamental retail and QSR revenue strategy.
Biodynamic Farming
Beverages. A holistic agricultural approach treating the farm as a self-sustaining ecosystem, following lunar planting calendars and using specific preparations — certification offered by Demeter.
Break-Even Point
Finance. The level of sales at which total revenue equals total costs, with neither profit nor loss.
Brick-and-Mortar
Business Models. A traditional physical business location with a storefront, as opposed to online or delivery-only operations.
Brix
Agriculture. A measurement of dissolved sugar content in liquids — used to assess ripeness of fruit at harvest, sugar content of juices, and concentration of syrups.
Buildout Allowance
Real Estate. Money provided by a landlord to help a restaurant tenant customize or renovate the space, often negotiated as part of the lease.
CAC
Marketing. Customer Acquisition Cost — the total cost of marketing and sales efforts to acquire a single new customer.
CITES
Agriculture. Convention on International Trade in Endangered Species — the international treaty governing trade in caviar (sturgeon), certain seafood, and other food products from protected species.
COGS
Finance. Cost of Goods Sold — the direct costs attributable to producing the food or beverage items sold by a business, including raw ingredients and packaging.
CapEx
Finance. Capital Expenditure — spending on physical assets like kitchen equipment, furniture, and building improvements.
Capital Expenditure (CapEx)
Business & Finance. Money spent acquiring or upgrading physical assets like kitchen equipment, refrigeration, vehicles, and store fit-outs — typically depreciated over time.
Cask Strength
Beverages. Whisky bottled directly from the barrel without dilution — typically 50-65% ABV. More expensive and intense than standard expressions, prized by enthusiasts.
Ceviche
Culinary. A Latin American dish of raw fish 'cooked' through marination in citrus juice (acid denaturation) — a technique illustrating that heat is not the only method of food preparation.
Chef's Table
Culinary. A premium dining experience where guests sit directly adjacent to the kitchen, often served a personalized tasting menu directly by the chef.
Churn Rate
Marketing. The percentage of subscription customers who cancel in a given period. For food subscription boxes and meal kits, churn management is the primary profitability challenge.
Clean Label
Consumer Trends. A consumer preference for products with simple, recognizable, minimally processed ingredients and transparent labeling.
Club Store Model
Business Models. A retail format that sells products in bulk quantities at discounted prices to membership fee-paying customers.
Co-Packer
Supply Chain. A contract manufacturer that produces and packages food products on behalf of a brand. Essential for startups launching food products without their own production facilities.
Co-Packing
Business Models. A contract manufacturing arrangement where one company produces food or beverage products for another brand.
Codex Alimentarius
Food Safety. Collection of internationally recognized standards, guidelines, and codes of practice relating to food safety and quality, developed by the FAO and WHO.
Cold Chain
Supply Chain. A temperature-controlled supply chain for perishable goods, ensuring products stay refrigerated or frozen from origin to consumer.
Cold Press / Cold Extraction
Beverages. Juice or coffee extraction using mechanical pressure without heat, preserving heat-sensitive nutrients, enzymes, and flavor compounds.
Commissary Kitchen
Operations. A licensed, licensed shared commercial kitchen rented by food businesses for food production, storage, and preparation.
Cottage Food Law
Regulations. State regulations that allow individuals to produce and sell certain low-risk food products from home kitchens without commercial licensing.
Country of Origin Labeling (COOL)
Food Safety. Regulations requiring food products to disclose the country where the primary ingredients were grown, caught, or produced.
Cover
Culinary. One guest at a meal service — restaurants measure sales in 'covers' rather than tables, as it better reflects true capacity utilization.
Cover Crop
Agriculture. Plants grown between main crop cycles to protect and enrich the soil, reduce erosion, and fix nitrogen — a key regenerative agriculture practice.
Critical Control Point (CCP)
Food Safety. A step in the food production process at which a control measure can be applied to prevent, eliminate, or reduce a food safety hazard to an acceptable level.
Cross-Selling
Marketing. Encouraging customers to purchase complementary products alongside their primary purchase (e.g., suggesting wine with a meal).
Customer Acquisition Cost (CAC)
Business & Finance. Total marketing and sales spend divided by the number of new customers acquired in that period — a critical metric for DTC food brands and delivery apps.
DTC (Direct-to-Consumer)
Marketing. A business model where a brand sells directly to the end consumer — bypassing distributors and retailers — typically through e-commerce or brand-owned stores.
Dark Kitchen
Business Models. A professional food preparation facility used exclusively for delivery orders, with no dine-in customers. Also called ghost kitchen or cloud kitchen.
Dark Space
Real Estate. Previously occupied retail or restaurant space that is vacant and available for new tenants, often at negotiated rates.
Dark Store
Marketing. A retail location repurposed exclusively for online order fulfillment — no physical customers. Used by rapid grocery delivery companies (Gorillas, Getir, Jiffy).
Daypart
Business & Finance. A defined meal or service period (breakfast, lunch, afternoon, dinner, late night). Understanding daypart mix is crucial for staffing, menu, and marketing decisions.
Direct Trade
Agriculture. A sourcing model where a roaster, chocolatier, or food producer buys directly from the farmer without middlemen, typically at premium prices for higher quality.
Distribution Center
Supply Chain. A warehouse facility that receives, stores, and distributes products to retail outlets, restaurants, or directly to consumers.
Drop Shipping
Supply Chain. A fulfillment model where a retailer sells products without holding inventory — orders are sent directly to a third-party supplier who ships to the customer.
EBITDA
Finance. Earnings Before Interest, Taxes, Depreciation, and Amortization — a measure of core operational profitability.
ERP
Technology. Enterprise Resource Planning — integrated software systems that manage core business processes including inventory, accounting, and supply chain.
Emulsification
Culinary. The process of combining two immiscible liquids (oil and water) using an emulsifier to create a stable mixture — essential for mayonnaise, hollandaise, and many sauces.
Expeditor (Expo)
Culinary. The person who coordinates food flow from kitchen to front of house, ensuring dishes arrive at the correct table in the correct order, timing, and temperature.
FDA
Regulations. Food and Drug Administration — the U.S. federal agency responsible for regulating food safety, labeling, and product approvals.
FDA (Food and Drug Administration)
Food Safety. The US federal agency responsible for regulating most human food products, dietary supplements, and food ingredients — excluding meat, poultry, and eggs (USDA).
FIFO
Operations. First In, First Out — inventory management principle ensuring older stock is used before newer stock to minimize waste.
FSMA
Regulations. Food Safety Modernization Act — U.S. legislation that shifted food safety focus from responding to foodborne illness to prevention.
Farm-to-Table
Consumer Trends. A movement emphasizing direct sourcing from local farms to the restaurant or consumer, prioritizing freshness and traceability.
Fermentation
Agriculture. The metabolic process by which microorganisms (yeast, bacteria, fungi) convert sugars to alcohol, acids, or gases — the basis of beer, wine, cheese, yogurt, and thousands of fermented foods.
Flexitarian
Consumer Trends. A diet primarily plant-based but that occasionally includes meat or fish, representing a growing consumer segment.
Food Cost Percentage
Finance. The ratio of ingredient costs to menu item price, typically targeted at 28–35% for restaurants.
Food Hall Effect
Marketing. The phenomenon where multiple food vendors co-located in a curated space collectively generate more foot traffic than they would individually — the fundamental value proposition of food halls.
Fortification
Marketing. The addition of vitamins and minerals to food products during manufacturing — common in plant-based milks, breakfast cereals, and baby food to match the nutritional profile of natural foods.
Forward Integration
Supply Chain. A strategy where a producer acquires control of the downstream distribution chain — for example, a dairy farm opening its own retail store.
Franchise
Business Models. A licensing arrangement where the franchisor grants the franchisee the right to operate a business using its brand, systems, and support in exchange for fees and royalties.
Franchise Royalty
Business & Finance. The ongoing percentage of gross sales (typically 4-8%) paid by a franchisee to the franchisor in exchange for the right to operate under the brand and system.
Functional Foods
Consumer Trends. Foods enriched with additional nutritional or health-promoting ingredients beyond their basic nutritional value (e.g., probiotic yogurt).
GFSI
Food Safety. Global Food Safety Initiative — a private sector initiative setting benchmark requirements for food safety standards (BRC, SQF, FSSC 22000) to harmonize safety across the global supply chain.
GMP (Good Manufacturing Practice)
Food Safety. Regulations and guidelines governing the conditions and practices for food production to ensure products are safe, pure, and effective.
Garde Manger
Culinary. The cold kitchen station in a professional restaurant responsible for salads, cold appetizers, charcuterie, and cheese plates.
Ghost Kitchen
Marketing. A delivery-only restaurant operating without a public-facing dining room, using a shared or private commercial kitchen to fulfill food delivery orders.
Gross Margin
Finance. Revenue minus Cost of Goods Sold, expressed as a percentage of revenue. A key profitability metric for F&B businesses.
HACCP
Operations. Hazard Analysis and Critical Control Points — a systematic preventive approach to food safety that identifies physical, chemical, and biological hazards.
HPP (High Pressure Processing)
Food Safety. A cold pasteurization technique using high water pressure to kill pathogens without heat, preserving fresh flavor and nutrition in juices, meats, and prepared foods.
IBU (International Bitterness Units)
Beverages. A scale measuring the bitterness of beer from hops — a 10 IBU beer is barely bitter, while a double IPA may exceed 80 IBU.
JIT
Supply Chain. Just-In-Time inventory — a strategy where ingredients are ordered and received only when needed, minimizing storage costs and waste.
Just-In-Time (JIT)
Supply Chain. An inventory management approach where ingredients or goods are ordered and received only as needed, minimizing storage costs but requiring reliable supply chains.
LTV
Marketing. Lifetime Value — the total revenue a business can expect from a single customer over the entire duration of their relationship.
Labor Cost Percentage
Business & Finance. Total labor (wages, taxes, benefits) divided by total revenue. Typically 25-35% in restaurants; rising labor costs are one of the industry's greatest challenges.
Landed Cost
Supply Chain. The total cost of a product including purchase price, shipping, customs duties, and other fees — the true cost base for imported food products.
Last Mile Delivery
Operations. The final step of the delivery process from a distribution hub to the end customer — a key challenge for perishable goods.
Lifetime Value (LTV)
Business & Finance. The total revenue expected from a single customer over their entire relationship with a business. High LTV businesses (pet food subscriptions, wine clubs) can justify high CAC.
Loyalty Program
Marketing. A rewards scheme designed to encourage repeat business by offering points, discounts, or perks to returning customers.
MOQ
Business & Finance. Minimum Order Quantity — the smallest amount a supplier will accept per order. Important for small food brands negotiating with manufacturers and distributors.
Maillard Reaction
Culinary. The chemical reaction between amino acids and sugars at high temperatures that creates the browned, complex flavors in seared meat, toasted bread, roasted coffee, and baked goods.
Mise en Place
Operations. A French culinary term meaning 'everything in its place' — the practice of organizing and preparing all ingredients before cooking.
NPS
Marketing. Net Promoter Score — a metric measuring customer satisfaction and likelihood to recommend a business, on a scale from -100 to 100.
Natural Wine
Beverages. Wine made with minimal intervention — no added yeasts, minimal sulfites, no fining agents — from certified organic or biodynamic grapes. A growing movement championed by indie wine bars.
Nitro (Nitro Coffee)
Beverages. Cold brew coffee or other beverages infused with nitrogen gas, creating a creamy, cascading texture and foam without dairy.
Nose-to-Tail
Culinary. A culinary philosophy of using every part of an animal in cooking, reducing waste and honoring the whole animal. Championed by Fergus Henderson of St. JOHN restaurant, London.
Omnichannel
Marketing. A multichannel approach to sales and marketing providing customers with a seamless experience whether shopping online, via mobile, or in physical stores.
PDO (Protected Designation of Origin)
Agriculture. EU certification guaranteeing that a product is produced, processed, and prepared within a specific geographical area using recognized know-how (Prosciutto di Parma, Roquefort).
PGI (Protected Geographical Indication)
Agriculture. EU certification for products with a quality or reputation linked to a geographical area, where at least one stage of production occurs in that area.
POS System
Technology. Point of Sale system — software and hardware used by restaurants and retailers to process transactions and manage orders.
Par Level
Operations. The minimum quantity of inventory that must be kept on hand to meet demand without running out or overstocking.
Pasteurization
Food Safety. The process of heating food to a specific temperature to kill harmful microorganisms. Invented by Louis Pasteur in 1864 — fundamental to modern food safety.
Percentage Rent
Real Estate. A lease structure where the tenant pays a base rent plus a percentage of gross sales above a defined threshold.
Phenology
Agriculture. The study of seasonal biological events in plants (budbreak, flowering, harvest) — critical for agricultural timing decisions and understanding climate change impacts on farming.
Plant-Based
Consumer Trends. Foods made entirely from plant-derived ingredients, formulated to replicate the taste and texture of animal products.
Pop-Up Restaurant
Business Models. A temporary dining establishment that operates for a limited time, often used to test concepts or build brand awareness.
Predictive Ordering
Technology. AI-driven technology that forecasts ingredient needs based on historical sales data, weather, and events to reduce waste.
Prime Cost
Finance. The sum of food costs and labor costs, typically the two largest expenses in a restaurant. Industry target is below 60% of revenue.
Private Label
Supply Chain. Products manufactured by one company and sold under a retailer's own brand name. Private label typically carries higher margins for the retailer than branded equivalents.
Proof (Proofing)
Culinary. The final rise of shaped bread dough before baking, where yeast fermentation produces CO2 that gives bread its airy structure.
Regenerative Agriculture
Agriculture. Farming practices that restore soil health, increase biodiversity, and sequester carbon — going beyond sustainability to actively improve the land.
RevPASH
Finance. Revenue Per Available Seat Hour — a hospitality metric measuring how effectively a restaurant utilizes its seating capacity.
Royalty Rate
Finance. The percentage of gross sales paid by a franchisee to the franchisor, typically ranging from 4–8% in the F&B industry.
SKU
Supply Chain. Stock Keeping Unit — a unique identifier assigned to each distinct product, used for inventory tracking and management.
SOPs
Operations. Standard Operating Procedures — documented step-by-step instructions for consistent execution of operational tasks.
SQF (Safe Quality Food)
Food Safety. A GFSI-benchmarked food safety and quality certification widely used by food manufacturers and retailers to ensure supply chain integrity.
Same-Store Sales (Comparable Sales)
Business & Finance. Year-over-year revenue comparison for locations open for at least 12 months, stripping out new unit growth to measure underlying business health.
Shelf Life
Food Safety. The length of time a food product remains safe to eat and maintains its quality under specified storage conditions — a primary driver of food production and logistics decisions.
Shrinkage
Business & Finance. Loss of inventory due to spoilage, theft, cooking loss, or portioning errors. In food retail, shrinkage typically runs 1-3% and is a critical cost control target.
Single Origin
Agriculture. Coffee, chocolate, or tea sourced from one specific farm, region, or country — allowing traceability to origin and communication of unique flavor characteristics.
Sommelier
Beverages. A trained wine expert who manages a restaurant's wine list, trains staff, advises guests on pairings, and negotiates with producers and importers.
Spot Buying
Supply Chain. Purchasing ingredients on the open market as needed rather than through long-term contracts, exposing the buyer to price volatility.
Table Turn
Operations. The rate at which a table in a restaurant is occupied and then becomes available for new customers. Higher turn rates increase revenue potential.
Take Rate
Marketing. The commission percentage that a food delivery platform (UberEats, DoorDash) charges a restaurant per order — typically 15-30%, a major debate point in the restaurant industry.
Tannin
Beverages. Polyphenolic compounds in wine (from grape skins, seeds, and oak barrels) that create a drying, astringent sensation in the mouth — important for red wine structure and ageing potential.
Terroir
Agriculture. The French concept describing the complete natural environment (soil, topography, climate, microorganisms) in which a food or drink is produced — most associated with wine and coffee.
Three-Tier System
Regulations. The U.S. alcohol distribution framework requiring producers, distributors, and retailers to be separate entities.
Traceability
Food Safety. The ability to track a food product's journey through every stage of production, processing, and distribution — increasingly required by retailers and regulators globally.
Triple Net Lease
Real Estate. A commercial lease where the tenant pays base rent plus property taxes, insurance, and maintenance costs.
USDA Organic
Regulations. A certification label indicating that food products have been produced according to USDA organic standards, covering farming practices and processing.
Umami
Culinary. The fifth basic taste (after sweet, sour, salty, bitter) — a savory, mouth-coating flavor associated with glutamates found in mushrooms, aged cheese, soy sauce, and tomatoes.
Unit Economics
Business & Finance. The direct revenues and costs associated with a single business unit (one restaurant, one store) — the building block of scalability analysis.
Upcycled Food
Marketing. Food products made from ingredients that would otherwise be discarded as waste, transforming byproducts into valuable consumer goods — a growing sustainability trend.
Upselling
Marketing. A sales technique where customers are encouraged to purchase a premium or higher-value item than they originally intended.
Varietal
Beverages. A wine produced predominantly from a single grape variety, with that variety's name on the label (Cabernet Sauvignon, Chardonnay) — contrasted with blended wines.
Vertically Integrated
Business Models. A business that controls multiple stages of its supply chain, from raw material sourcing to final sale.
Vintage
Agriculture. The year in which grapes were harvested for a specific wine. Vintage variation due to weather is fundamental to wine pricing and quality assessment.
Virtual Brand
Business Models. A restaurant brand that exists only on delivery platforms, operating out of an existing kitchen without its own storefront.
White Label
Business Models. A product manufactured by one company but rebranded and sold by another. Common in private-label food products at retailers.
Working Capital
Finance. Current assets minus current liabilities — the funds available for day-to-day operations like purchasing inventory.
Yield
Agriculture. The amount of produce harvested per unit of land area, or the amount of usable product from raw ingredient (e.g., 70% yield from butchering a whole animal).
Yield Management
Operations. Optimizing ingredient utilization by minimizing waste and using trimmings effectively across multiple menu items.