Trade promotion forecasting: Empowering sales teams in CPG

Trade promotions remain one of the most powerful levers for driving growth in the consumer-packaged goods (CPG) industry. They drive volume, boost visibility, and strengthen retailer relationships, making them a critical part of commercial strategy. But as market dynamics shift and promotional spending stabilizes after the surge of 2023–2024, sales teams face growing pressure to make smarter, data-driven decisions. 

This is where trade promotion forecasting comes in. By predicting the outcomes of promotional activities before they happen, CPG companies can optimize spend, improve ROI, and align cross-functional teams around a shared view of expected performance. In this article, we’ll explore how trade promotion forecasting works, why it matters, and how leading CPGs are using it to gain a competitive edge. 

Setting the stage 

Promotions continue to be a major growth driver in CPG, even as spending levels off. In the U.S., volume decline has been widespread across categories like grocery, personal care, and household products. With consumers buying less and looking for deals, promotions offer one of the few levers to reignite growth. 

Meanwhile, private label brands are gaining traction globally. As shoppers become more price-sensitive, loyalty to established brands is weakening. To stay competitive, CPGs are investing in promotions to reconnect with consumers and defend market share. 

But the role of promotions is evolving. They’re no longer just about short-term sales spikes. Increasingly, brands use them to reinforce strategic positioning and build long-term customer value. 

To support this shift, CPGs are turning to data and analytics to measure trade investment impact more precisely [KPMG: CPGs on the hunt for profitable growth]. With better visibility into what works, sales teams can reallocate spend to the most profitable channels and customers—and gain deeper insights into customer profitability and unit economics. 

The difference between teams that guess and those that grow? Trade promotion forecasting.

What is trade promotion forecasting? 

Trade promotion forecasting is the practice of predicting how discounts and promotional activities will affect product demand. It enables sales teams to estimate the volume uplift a promotion is likely to generate—before it hits the shelf. 

Unlike general sales forecasting, which looks at overall demand, trade promotion forecasting focuses specifically on the incremental impact of promotional activity. It helps isolate promotional uplift from baseline sales, giving teams a clearer picture of what the promotion is actually driving. 

Effective forecasting considers multiple variables: 

• Timing of the promotion 

• Product category and SKU-level performance 

• Promotion type (e.g., price discount, bundle, display) 

• Channel or retailer dynamics 

A key concept is the distinction between baseline and incremental sales. Baseline refers to expected sales without any promotion; incremental sales represent the additional volume driven by the promotion. 

But estimating the baseline isn’t always straightforward—especially in categories with intense promotional pressure. 

The challenge of baseline determination in high-promotion categories 

One of the most underestimated challenges in trade promotion forecasting is accurately determining the baseline—the true, non-promoted consumption level of a product. In categories with normal promotional pressure, sales typically follow a predictable pattern: a peak during the promotion, a dip as retailers and consumers work through their stock, and then a return to a stable baseline. In these cases, the baseline can often be estimated as the average volume between promotions. 
However, as promotional pressure increases—approaching 90% or more—the sales pattern fundamentally changes. Instead of gentle peaks and recoveries, you see a series of sharp spikes and deep troughs, sometimes with sales volumes dropping close to zero between promotions. In this environment, the baseline is no longer simply “the average volume between sales.” It becomes a hidden variable: your actual consumption, masked by extreme fluctuations. 
Manually determining the correct baseline in such a volatile environment is nearly impossible. Human analysis struggles to separate true demand from the noise of constant promotions. This is where AI-predicted baselines become indispensable. By leveraging advanced machine learning models trained on granular consumption data, AI can cut through the volatility, accurately estimating the real baseline—even in the most promotionally intense categories. 
This capability is not just a technical advantage. With AI-predicted baselines, CPG teams can finally see through the fog of promotional activity, enabling more accurate forecasting, better demand planning, and ultimately, more profitable decision-making. 

Advanced approaches to trade promotion forecasting 

To achieve this level of precision, leading CPGs are turning to bottom-up modeling techniques. These approaches start with granular historical data at the SKU and account level. Statistical models analyze past performance, apply relevant variables, and roll up the results to create an overall forecast—leading to more accurate predictions and better alignment with real-world conditions.  

Why accurate forecasting matters in CPG 

Reliable trade promotion forecasting is essential for effective trade promotion management. Promotions touch nearly every part of the business—from sales and marketing to demand planning and finance. When forecasts are off, the consequences can be costly. 

Overestimating demand can lead to excess inventory, wasted marketing spend, and strained retailer relationships. Underestimating demand can result in stockouts, missed sales, and lost shelf space. 

Accurate forecasting helps teams strike the right balance. It enables better planning and budgeting, ensures product availability, and supports more effective collaboration across departments. Sales teams can set realistic targets, demand teams can create reliable volume forecasts, and finance teams can track promotional ROI with greater confidence. 

Ultimately, trade promotion forecasting allows companies to shift from reactive firefighting to proactive strategy—driving smarter decisions and stronger execution. 

Challenges in trade promotion forecasting 

Despite its importance, many CPG companies struggle to implement trade promotion forecasting effectively. Common challenges include: 

• Fragmented data: Teams often work in silos, using different systems and formats, making it hard to consolidate data across sell-in, sell-through, and sell-out. 

• Manual analysis: Spreadsheet-based planning is time-consuming and prone to human bias and inconsistency. 

• Legacy systems: Older tech stacks can’t handle the volume and complexity of today’s data, limiting forecasting accuracy. 

• Channel complexity: With more routes to market—including indirect channels and e-commerce—forecasting becomes harder to manage. 

• Technology gaps: The rise of AI-powered forecasting is widening the gap between companies that invest in modern tools and those that don’t. 

To overcome these challenges, CPGs need tools that harmonize data, automate analysis, and scale with their business. That’s where Visualfabriq comes in. 

Improving trade promotion forecasting with Visualfabriq 

Trade promotion management is complex—especially when teams rely on disconnected systems and outdated tools. Visualfabriq simplifies and strengthens forecasting with a software suite that is purpose-built for CPG. 

Key capabilities include: 

• Automated data integration across sell-in, sell-through, and sell-out sources 

• Granular forecasting at product and account level 

• Machine learning-driven models that incorporate more demand drivers than any human team could manage manually 

• AI-powered baselines based on consumption data for clearer promotional uplift 

• Flexible modeling tailored to market conditions and business needs. For example, Heineken in the Netherlands used retailer- and SKU-specific submodels to factor in promotion price elasticity and seasonality. This led to significantly more accurate forecasts and better promotional outcomes. [Case study] 

With Visualfabriq, CPG teams can move from reactive planning to proactive strategy—using data, automation, and AI to forecast with confidence and drive profitable growth. 

Bridging forecasting and optimization: The role of AI 

While trade promotion forecasting empowers CPG sales teams to predict promotional outcomes with greater accuracy, its true strategic value emerges when paired with trade promotion optimization (TPO). Forecasting tells you what might happen—optimization helps you decide what should happen. 

TPO builds on the insights generated by TPF to recommend the most effective promotion strategies across products, channels, and timeframes. It’s the difference between knowing the likely impact of a promotion and choosing the best possible one to run. 

Modern TPx applications like Visualfabriq take this a step further with AI-powered scenario planning. These tools allow teams to simulate multiple promotional scenarios in real time—before any spend is committed. It enables CPGs to pre-test promotions virtually and select the ones most likely to deliver profitable growth. 

This integration of forecasting and optimization transforms trade promotion from a reactive cost center into a proactive growth engine. Sales teams can not only anticipate performance but also shape it—allocating spend to the most effective promotional levers and continuously improving promotional strategy through data-driven learning. 

Recap 

Trade promotion forecasting has become a strategic necessity for CPG sales teams navigating today’s competitive and complex market. As promotional spending becomes more targeted and consumer behavior more unpredictable, the ability to forecast promotional impact with accuracy is what separates reactive teams from proactive leaders. 

By leveraging granular data, AI-powered models, and integrated forecasting tools like Visualfabriq, CPG companies can move beyond guesswork. They can plan smarter, allocate trade spend more effectively, and deliver promotions that not only drive volume but also build long-term brand value. 

In a landscape defined by volume pressure, private label competition, and rising complexity, trade promotion forecasting empowers teams to make confident decisions—and unlock profitable growth. 

Ready to take your trade promotion strategy to the next level? 

Download The CPG Executive’s Guide to Advanced TPx for expert insights on integrating trade promotion management, forecasting, and optimization. 

Want to see a modern TPx solution in action? Book a demo now and experience how AI-powered planning can transform your promotional performance.