What a CPG broker is
A CPG broker is an outsourced sales rep who sells a brand into retailers and distributors in exchange for a commission, usually 3 to 7% of the sales they bring in. They don't buy your product, they don't warehouse it, and they don't take title to it. They sell it. A natural-channel broker like Presence Marketing or Acosta walks your $30M wellness brand into the UNFI category review and the Sprouts buyer meeting that you, sitting in a warehouse in Boulder, would wait six months to get on the calendar.
"Food broker" is the same role with an older name. If you typed "what is a food broker" because someone pitched you a 5% deal to get you into KeHE, this is that. The broker's whole value is the relationship: they already know the buyer, they know the category review calendar, and they speak the retailer's language. You're renting access and expertise instead of hiring a national sales team you can't yet afford.
Broker vs distributor
This is the confusion worth clearing up, because the two get blurred constantly and they do completely different jobs. A broker sells. A distributor moves the product. The broker convinces the Sprouts buyer to take your SKU; the distributor (KeHE, UNFI) then warehouses it, breaks the pallet into store orders, and trucks it to the shelf. One opens the door, the other carries the boxes through it.
| Dimension | CPG broker | Distributor |
|---|---|---|
| Core job | Sells brand into accounts | Warehouses and ships product |
| Takes title? | No | Yes, buys and resells |
| How they're paid | Commission, 3 to 7% of sales | Margin on the resale, 20 to 30% |
| Holds inventory? | No | Yes |
| Relationship owned | Retailer buyers | Retailer logistics and ordering |
Notice the money is structured differently, and that difference matters on your P&L. The broker's 3 to 7% is a commission on sales they source. The distributor's cut is a distributor margin, the markup wedged between what you sell in at and what the retailer pays, typically 20 to 30% in natural and specialty. You can easily pay both on the same case: a broker commission to land the account and a distributor margin to service it. Founders who model only one of those two layers get a nasty surprise on the first remittance.
What broker commissions actually cost
Brokers are cheap to start and expensive to scale, which is exactly why brands use them early and bring sales in-house later. Run a brand at $5M through a 5% broker against the same brand at $40M.
| Annual brand sales | Broker rate | Annual commission |
|---|---|---|
| $5,000,000 | 5% | $250,000 |
| $20,000,000 | 5% | $1,000,000 |
| $40,000,000 | 5% | $2,000,000 |
At $5M, $250K buys you a sales force you could never hire for that price, and it's an easy call. At $40M, that same 5% is $2M a year, and $2M hires a real internal team with people who think about nothing but your brand. The tipping point is roughly where a dedicated headcount costs less than the commission and gives you more control. Most growing brands cross it somewhere in the $20M to $50M range, and the smart ones plan the transition before the commission line gets embarrassing.
Why a brand-side analyst tracks brokers
The broker is paid on sales, so they optimize for sales, which is not always the same thing as profitable sales. A broker will happily book a deep promotion that moves volume and pays their commission while quietly torching your margin. If you reconcile broker performance only on top-line shipments, you'll reward exactly the behavior you should be questioning.
The better read pairs the broker's sold volume against the trade marketing spend it took to move it, by account. A broker who grows your Sprouts business 30% on flat trade spend is worth every point of commission. One who grows it 30% by doubling the promotion calendar is just buying volume with your money and billing you for the privilege. The commission line and the trade-spend line have to be read together, never apart.
Where Scout fits
Judging whether a broker is actually earning their commission means lining up the sales they sourced against the trade spend it cost, account by account, and that data almost always lives in two different places. Scout connects your SPINS or retailer movement data to the sell-in and trade-spend side so the question "is this broker growing us profitably or just expensively" has a number behind it. Scout measures the broker's output; it doesn't pay the commission or manage the relationship. That's still a conversation you have directly.
The short version
- A CPG broker (or food broker) is an outsourced sales rep who sells your brand into retailers and distributors for a commission, usually 3 to 7% of sales.
- A broker sells; a distributor warehouses and ships. You often pay both on the same case, a commission to the broker and a margin to KeHE or UNFI.
- Brokers are cheap at $5M and expensive at $40M. Track their sold volume against the trade spend behind it, or you'll reward volume that's quietly losing you money.