What are Consumer Packaged Goods?

Consumer packaged goods are items that consumers generally buy and use daily. It is also known as fast-moving consumer goods (FMCG) because of how quickly they sell out. This is a large and highly competitive industry that serves millions of consumers. These items are used daily by average consumers and require regular replenishment. They are generally sold for a low profit in exchange for high-volume sales. To remain relevant in this industry, it is necessary to learn more about packaged products and study consumer motives for purchasing those goods.

Categories of CPG

Generally, consumer packaged goods have four main categories:

  • Food and Beverage: Since food and beverage items are perishable, they are a big driver for CPG brands. 
  • Apparel: Everything from shirts and trousers to footwear and hats all come under CPG. 
  • Household Products: It includes cleaning supplies, laundry products, paint thinner, etc. 
  • Beauty and Wellness: It includes makeup, hair and skin care, supplements, lotions, etc.

Common Characteristics of CPG

Consumer packaged goods are famous for their quick use and frequent purchases. Some of these products are perishable, like vegetables and dairy products, and some have a long shelf life, like skincare products, shampoos, etc. Below are some common characteristics of CPG products:

  • Low Cost: These products are less expensive as compared to bigger purchases like cars, TVs, etc. 
  • High Volumes: Since these products are purchased so often, they are packed, shipped, and stocked in large quantities. There is always a high demand for CPG products like food, beverage, and beauty products. 
  • Widespread Distribution: Globally, there is a high demand for these products; hence, they are widely distributed. 
  • Low Consumer Engagement: Since these products are used in day-to-day life, buyers don’t spend much time choosing them. 
  • Frequently Purchased: CPG products are widely available, and consumers buy them daily. 
  • Rapid Consumption: These products are produced in high volume as their consumption rate is very high. 

Examples of CPG

Consumer packaged goods are worldwide famous, and most people have them in their homes and also buy them routinely. Some of these nondurable products are:

  • Food: Food items such as fruits and vegetables are consumers’ all-time favorites and high-demand products. Consumers buy these products as frequently as every day. 
  • Beverages: Beverages such as juice, water, energy drinks, soft drinks, soda, alcohol, etc, are in high demand among customers. 
  • Clothes: Consumers buy clothes less frequently than food and beverages, but these are important in providing comfort and fashion to customers. 
  • Medication: Consumers buy allergy and pain relief medicines in preparation for medical conditions or current medical problems. Medical supplies like bandages and medical tape belong to CPG. 
  • Personal Hygiene Products: It includes products like shampoo, body wash, razors, shaving cream, toothpaste, and deodorant.  
  • Cosmetics: Cosmetics are nondurable consumer products, but they have a long life span. 
  • Cleaning Items: It is common for consumers to buy sanitation products frequently and quickly. Sanitation products maintain and promote health and safety.

CPG Industry Trends

The rapid advancement in technology is causing major changes in the CPG sector. Some of the most significant trends in this sector are:

  • Development of Proprietary Technology: To modernize their brands, CPG companies are creating in-house software and systems. For example, the P&G company built an innovative center with a team of data scientists and engineers to create new products more quickly and efficiently. 
  • Rapid Growth of Direct-to-Consumer Brands: With the advancement of e-commerce and the supply chain, these companies are now selling directly to customers instead of using a traditional retailer as an intermediary. 
  • Demand for Transparency: Nowadays, consumers care more about where their products come from and how they are manufactured. CPG companies provide transparency regarding the health and environmental sustainability of their products. 
  • Construction of Brick-and-Mortar Stores: The companies are experimenting with technology that allows customers to buy the products without standing in a checkout line. E-commerce, or online shopping, is the best example of this. 
  • Subscription-Based Payments: The direct-to-consumer CPG companies are analyzing consumers’ feedback on the premium subscriptions of their products. 
  • Click and Deliver: Technology enables companies to deliver consumer packaged goods right to the end user’s doorstep. 
  • Click and Collect: Consumers can also order packages online and pick them up without waiting at specific locations. 
  • Use of Data Analytics: These companies use data and analytics to target consumers, like sending ultra-personalized Instagram and YouTube advertisements.  

Consumer Packaged Goods are crucial businesses as they ensure the smooth flow of the supply chain and enhance customer satisfaction. Businesses need to manage CPG inventory as they may encounter challenges like high demand for products, worldwide distribution of goods, and a variety of customers.