We previously discussed ACV and %ACV as part of our CPG Jargon Buster Series. Let’s focus on TDP, Total Distribution Points, also sometimes known as TPD or Total Points of Distribution.
TDP numbers reflect the overall health of your brand from a distribution perspective. The higher the TDP numbers rise, the better your brand’s overall health.
CALCULATING TDP
TDP is closely related to %ACV – for distribution width, and Average Items Carried – for distribution depth. In fact, Nielsen states the method for calculating TDP as follows:
“You can find it by calculating the number of retailers your products are in (breadth) and the number of products you’re selling in those stores (depth).”
TDP is generally part of your Nielsen database, so you will have it ready at your table. However, if you have to calculate it yourself, here’s how it goes:
Suppose a Brand has 5 items/SKUs in its portfolio. TDP would be applicable at the item level of the Brand, meaning the 5 items/SKUs, and is calculated simply as the sum of the %ACV distribution of all these items. It is not necessary that these items be part of a brand; they can be clubbed under a category, segment, or any other similar product aggregations as well.
Example:
| %ACV Distribution | |
| Total Brand A | 80 |
| Item A | 50 |
| Item B | 60 |
| Item C | 65 |
| Item D | 75 |
TDP = 250 (50 + 60 + 65 + 75).
The maximum TDP score one can achieve here is 400, where %ACV distribution for all items is 100. One cannot set a partition and say that a certain TDP score and above is good, and below it is concerning. It all depends on the unique set of circumstances that surround your company, brand, category, etc.
Note: Avoid double-counting by excluding Total Brand from the calculation.
IF %ACV DISTRIBUTION IS 95% OR ABOVE
If we were to calculate the TDP of Brands with %ACV Distribution of 95% or more, the TDP score and the Average Items Carried would be almost the same, provided that we shift the decimal point two places to the left.
Look at the table below:
| %ACV Distribution | |
| Total Brand X | 98 |
| Item 1 | 66 |
| Item 1 | 64 |
| Item 1 | 78 |
| Item 1 | 82 |
| Item 1 | 80 |
TDP = 370
Average Items Carried = 370 ÷ 98 = 3.77
Notice how if we would have moved the decimal two places in the TDP, we would have arrived at 3.70 of Brand X’s items carried by a retailer, on average.
A MASTER MEASURE – TDP
By allowing data analysts to look at both how widely the product items are being distributed and how well they are performing once they are in the store, TDP provides a solid base for managers to base their next strategies and objectives on.
TDP further helps Managers in CPG understand Volume vs Brand Distribution. The item-level scrutiny ensures that managers know when their product is off the retailer’s shelf, as would be reflected in the total volume reduction.
TDP also lets managers know whether their brand is being represented in a fair manner on the retailer’s shelf. The method to do that is to find out your TDP percentage as against competition ÷ the in-store volume percentage. The volume percentage should not be higher than the TDP percentage.
Finally, TDP also allows you to gain intel on whether the product category has expanded, and find ways to bypass competition in securing shelf space to increase velocity.
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