Consumer Packaged Goods (CPG), or Fast-Moving Consumer Goods, represents one of the most prolific markets in North America. The CPG segment accounts for a $2 trillion industry that encompasses a wide range of consumer products found in several retail categories.
The descriptive names designating these products go far to define the goods in the category. Fast-Moving, for example, accurately portrays the way CPG travels through consumer markets, where they are positioned for rapid turnover and frequently replaced with new versions.
Major Characteristics of Consumer Packaged Goods
Fast-Moving Consumer Goods are those items commonly used by consumers on a daily basis. Unlike durable goods, which are designed to last for extended periods of time, CPG are items frequently replaced in the cycle of consumerism. Items that quickly become obsolete, for whatever reason, fall into the CPG category, due to the fleeting relevance they share. Two prime examples of CPG are perishable food products, which quickly lose value to consumers as they naturally deteriorate, and newspapers which are replaced daily by new versions – rendering yesterday’s news obsolete.
Often, but not always, CPG are low-cost items with short shelf lives. Food and beverage items, like snacks and soda, are frequently sought examples of CPG, but further samples are seen in retail sales categories as diverse as tobacco and over-the-counter drugs.
Volume and Margins
Perhaps more so than any other consumer category, CPGs illustrate a sales model showing small profit margins at the retail level which are made-up by high-volume sales figures. In addition to food and beverage items and other inexpensive products, household goods, toiletries and even some kinds of clothing qualify as CPG – in contrast to major appliances and other durable goods designed to stay in service for lengthy periods of time. Though producer margins are more favorable, quick turns and volume sales are what make CPGs profitable at the retail level. As a result, competition is fierce among brands vying for repeat CPG sales.
Packaging Professionals Furnish CPG Solutions
Packagers play unique roles bringing CPGs to market, answering to sales and merchandising trends in real time. Responding on-the-fly with effective packaging solutions is essential in the highly competitive CPG arena, where standing out on store shelves is imperative. In fact, experienced packaging professionals apply a different set of standards to their CPG efforts than to other packaging categories.
For example, consumers are more fickle in their CPG buying habits than they are in other categories. Product loyalty is lower and the effort required for consumers to change brands is miniscule, compared to durable goods. As a result, contract packagers tailor their packaging strategies for CPG environments prone to split-second decisions made based upon visual cues. In the end, packaging solutions must go from conception to implementation quickly, with built-in high-volume production capabilities. And packages must integrate seamlessly into CPG markets, reflecting the fleeting nature of CPG purchases.
Professional packagers well-versed on consumer packaged goods strategies furnish viable approaches for countless industries. Understanding high-volume sales categories is a requisite for packaging success in the Fast-Moving Consumer Goods segment, so contract packagers tuned-in to the highly competitive needs of CPG marketers deliver the highest return on investment.