What's the difference between shipments, depletions and sell-through?
The short answer: Shipments are what you sell to your distributor. Depletions are what your distributor sells to stores, bars and restaurants. Sell-through is what those accounts sell to the people who drink it. Each one is a different step, and mixing them up leads to bad decisions.
Follow one order through
Say you ship 80 cases to a distributor in March. They sell 50 cases to accounts that month. Those accounts sell some amount to consumers, and unless a retailer shares scan data, you don't know how much.
So you have 80 shipped and 50 depleted. The 30-case gap isn't automatically sitting in the warehouse, either. The distributor may have had cases left over from February, or sent some back.
Why it matters
A big shipment month can just mean the distributor stocked up ahead of a program. A big depletion month can mean accounts loaded in before a holiday. Neither one proves people are buying your bottle again and again.
The signal you want is repeat orders: the same accounts coming back, and more accounts joining them.
Keep the labels straight
Some distributors call depletions "sales." Some reports use "sell-through" for what the distributor sold to accounts, which is really a depletion. Pick one name for each step and use it the same way every time, so nobody in a meeting is comparing two different numbers.
Can depletions stand in for consumer demand?
Over several months, they're a decent directional signal. In any single month, account inventory and ordering habits get in the way. If you need to know what consumers bought, you need retail scan data.