Zero-Based Trade: A Smarter Way to Make Every Trade Dollar Count
Trade spend is one of the biggest investments CPG companies make—second only to the cost of goods sold. But here’s the uncomfortable truth: a big chunk of that budget might not be pulling its weight. Are those dollars truly driving growth, or just getting lost in the shuffle?
If you're not crystal clear on where every trade dollar is going—or what it's doing—you're not alone. Trade promotions are notoriously hard to manage. But there's a smarter approach gaining traction with leading CPGs: zero-based trade (ZBT).
ZBT takes the principles of zero-based budgeting and applies them to trade spend. Instead of basing your budget on last year’s numbers, ZBT asks you to build from the ground up—questioning every dollar, aligning with your growth strategy, and only investing where it makes a measurable impact.
Why Zero-Based Trade Matters Now
Here’s the reality: many CPG leaders admit their current trade spend is unsustainable. They know promotions are eating into margin, but they lack the tools or structure to fix it. That’s where ZBT changes the game.
This isn’t just about cost-cutting. It’s about building a smarter, more profitable way to grow. With the right ZBT approach, companies can boost trade ROI by 10–20%, reduce waste, and unlock capital to reinvest in innovation, marketing, and brand building.
How ZBT Works: The Five-Step Framework
Ready to get more out of your trade spend? Here’s how the ZBT process breaks down:
1. Diagnose Where You Are
Start by assessing your current trade spend practices. Look for inefficiencies, duplication, and blind spots. This is your baseline—knowing what’s working, and what’s not.
2. Align Strategy with Spend
Your trade strategy should support your overall business goals. Are you investing in the right retailers? Do your promotions actually drive incremental volume? If not, it’s time to realign.
3. Use Optimization Levers
This is where things get tactical: budgeting, pricing strategies, analytical planning, and post-event analysis. With the right levers in place, you can improve both execution and outcomes.
4. Reset the Budget
Now you’re ready to rebuild your budget from the ground up. Prioritize high-impact promotions. Cut the rest. It’s that simple—and that hard.
5. Build for Long-Term Success
ZBT isn’t a one-and-done project. It requires systems, cross-functional alignment, and ongoing analysis. But when it’s done right, it creates a flywheel of smarter spending and better results.
What’s in It for You?
Zero-based trade isn’t easy—but it’s worth it. With the right tools and mindset, you can:
Drive higher ROI from trade promotions
Rein in out-of-control budgets
Align cross-functional teams
Free up funds to fuel innovation and growth
The best part? You don’t have to figure it out alone. TrewUp helps CPG teams get the data clarity they need to make ZBT a reality—unlocking real-time visibility and reducing the manual lift it usually takes to analyze trade spend.
In short, you can stop wasting trade dollars and start using them as a strategic advantage.
Frequently Asked Questions About Zero-Based Trade
What is Zero-Based Trade (ZBT)?
Zero-Based Trade is a budgeting method where every trade dollar must be justified from scratch, rather than being based on last year’s spending. It helps CPG brands align promotions with strategic goals and eliminate waste.
How does ZBT help CPG brands grow profitably?
ZBT improves trade ROI, reduces budget overruns, and ensures dollars are spent on promotions that actually drive incremental volume and retailer growth.
Is ZBT realistic for small to mid-sized brands?
Yes—but only with the right tools. Visibility into deductions, retailer performance, and promotional outcomes is essential. That’s why modern solutions like TrewUp are key to making ZBT work at scale.
This article was inspired in part by Strategy&'s original thought leadership on Zero-Based Trade. You can read their full breakdown here.
