r/CPGIndustry

I run a small company that does deduction recovery and trade promotion management for CPG brands. 7 customers right now, ranging from emerging to mid-market. Talking to controllers and CFOs all day, every brand under $200M is saying the same thing: deductions are creeping up and distributor support is slower than ever to respond on disputes.

Wanted to share some patterns from the trenches in case it's useful. None of this is product talk, just what I'm seeing.

Deduction codes are getting more granular and less explained. We're seeing a lot more "misc" and "compliance" codes with basically no backup behind them. If you push back on these, they get reversed maybe 60% of the time. Most brands don't push.

KeHE and UNFI handle disputes very differently right now. KeHE is slow but consistent, clean documentation gets you paid in 30-45 days. UNFI is faster on small ones but pushes back hard on anything over $1K. Different playbook needed for each.

Unauthorized deductions are the most painful category we're seeing. Distributors taking deductions for promotions the brand never approved. If you don't have your trade plan documented somewhere ironclad, you're defenseless. This is the single biggest leak point for brands under $50M.

Most brands genuinely don't know what their deduction rate is. We ask new prospects "what percent of gross sales are you losing to deductions?" Half the time they don't know. The ones who think they know are usually understating by 30%+ because they're not counting MCBs and post-audit claims, which are a huge chunk.

Recovery is a process problem not a tech problem. You can have great software and lose money if nobody is consistently reviewing line items and filing within the 90 day window. Most small brands need a service, not a tool. We've leaned into that hard.

One more thing I keep seeing. Brokers are not your friend on recovery. They get paid on new orders. They have zero incentive to help you fight deductions on old ones. If you're relying on your broker to flag this stuff, you're losing money and don't know it yet.

Anyway. If you work at a brand and any of this resonates, I'd love to compare notes. We're also raising a small round right now and would especially love to talk to CPG operators who've been through this pain themselves and might want to angel invest.

Spent the last few months talking to ops leads at frozen, dairy, and fresh produce brands. One pattern keeps showing up and it doesn't get talked about much on this sub.

The FAO puts pre-consumer food loss at ~14% globally. UNEP says ~13% disappears between harvest and retail. For perishable CPG brands selling into US grocery, the working number I keep hearing for cold-chain related shrink (temperature excursions, transit delays, expiration write-offs, DC mis-rotations) lands somewhere between 4% and 10% of revenue on the affected SKUs.

That is not a rounding error. On a $50M frozen brand that is $2M–$5M a year going to a landfill, a return, or a chargeback. And most of it is invisible to the founder because it shows up as "spoilage allowance" in the COGS line and nobody questions it.

What's actually changing in 2026:

1. Computer vision is finally cheap enough to put cameras on the fresh perimeter (meat cases, produce bins, dairy backroom). Models can now identify variable-weight, non-barcoded items. Three years ago this was a research paper. This year I am seeing it in regional grocery pilots.
2. The interesting part isn't the camera. It is pairing the visual signal with the TMS + temperature log + ERP shrink data so the model learns which lanes / carriers / DCs / stores are the actual loss-generators. Most brands today still get a CSV from their 3PL once a month and call it visibility.
3. The unlock is that the AI doesn't need to be "autonomous." A weekly ranked list of "where you lost margin and why" is enough to recover a huge chunk of it manually. Founders keep waiting for the agentic Skynet version and missing the boring 80% gain that is already sitting there.

Honest take: most "AI cold chain" pitches I see are still IoT logger companies with a new homepage. The real ones are the teams that own ingestion across all three data sources (sensor + vision + ERP) and can show you a $ figure of recovered margin in 90 days.

Questions for the sub:

• What is your actual cold-chain shrink % as a line on your P&L? Are you measuring it, or is it buried in spoilage allowance?
• Anyone running computer vision in the backroom or trailer yet? What is actually working vs. what is a science fair?
• For founders under $20M revenue: is this even solvable without enterprise budget, or do you just price the shrink in?

Curious to hear what people are seeing on the ground.