5 Food Jargon Words You Absolutely Need to Know

Here's a cheat sheet of the phrases aspiring food entrepreneurs shouldn't be without.
12/09/2013 09:43 am ET Updated Feb 08, 2014

After years as a food editor, I thought I knew my foodie lingo: I had ardent opinions on Lacinato Kale and pronounced Gewᅢᄐrztraminer like a sommelier. But when I began interviewing dozens of successful food entrepreneurs for my book, Cooking Up a Business, there was a whole new set of code words everyone was using. Here's my cheat sheet of the phrases aspiring food entrepreneurs (and ardent food lovers) shouldn't be without:

Co-packer: I always wondered how someone made artisanal gummy bears by hand--sweet magic? The open "secret" is that many food companies produce their goods via a co-packer, a manufacturer who takes a recipe (or food or beverage concept) and produces it in their factory. (Not that working with a co-packer means it's hands-off--in Cooking Up a Business, many companies learned this the hard way!)

Cottage laws: Unfortunately, this has nothing to do with Keebler elves. Instead, it's simply the state laws that say what you can bake in your home kitchen--like small batches of cookies--to sell, and what you have to go to a commercial kitchen or co-packer for (almost everything else). In real life, a company like Keebler could never make their cookies out of a home tree!

Rapid-turnover: Ah, the one business concept many food entrepreneurs wished they knew before: sell a rapid-turnover item that a customer will restock every week. Rapid turnover (aka, good business sense) examples: chocolate, cereal, salsa, and cheese. Slow turnover (aka, hard for young companies) examples: vinegars, ketchup, extracts, spices...anything that sits in your pantry for months (ahem, years).

UPC and SKU: Here's your cocktail party tidbit: These three letter acronyms are almost, but not quite, the same. Think you can decode the acronym or guess which is which? (Cue Jeopardy theme song.) A UPC (Universal Product Code) is the 12-number barcode that's on every product, and works as an identifier anywhere it's sold. A SKU (Stock Keeping Unit) is the tracking number an individual store assigns to a product. (I like to think of it in terms of those Russian nesting dolls...the SKU is a layer in from the UPC.)

Floating Inventory: You know when your best-case scenario suddenly turns into your worst case scenario? That pretty much sums up the impact of floating inventory: as a company sells more product, they have to buy ingredients and pay people to make the product--but they don't get paid by the grocery store until months later! That in-between money runs into millions of dollars for the companies in Cooking Up a Business--and sometimes, that's money they don't have readily accessible. (Of course, the best part about reading the book is finding out how they overcame challenges like this and many others!)

Any more food jargon you've come across? Let us know in the comments and I'll decode it for you!

Rachel Mount Hofstetter (@rachelhoffy) is the author of the new, go-to guide to food entrepreneurship Cooking Up a Business. The former food editor at O, the Oprah Magazine and Reader's Digest was so inspired by the entrepreneurs she wrote about that she started her own company, guesterly, which creates custom playbills for any event.