What is CPG: Meaning and examples

Every day, people purchase an incredible number of products belonging to the CPG industry. These purchases form a substantial portion of the estimated $200+ billion in quarterly retail sales in the U.S. Of course, the largest players in the CPG space are well-known far beyond U.S. borders. Companies such as Nestlé, The Coca-Cola Company, L’Oréal, and Unilever offer products that are familiar to people all over the world. Many of these have hundreds of thousands of employees spread across multiple nations and supply people with a surprisingly large range of unique products.

Knowing what this industry and its products are all about can make it easier to structure your own business’s product lines and launches for maximum success in the market.

What is CPG?

The CPG meaning you’re probably looking for is simple enough—the acronym stands for “consumer packaged goods.” However, not all commonly sold goods that come in packages make the cut for inclusion in this space. As it turns out, only goods that people regularly replace are considered legitimate consumer packaged goods in the first place. These kinds of goods can include such everyday items as snacks, napkins, cooking ingredients, and even pencils.

As you’ve likely noticed, the generally accepted CPG definition is fairly varied in terms of the many products under its umbrella. However, there is actually a bit more to learn about CPG. Namely, it not only defines a wide range of products, but the very industry in which those products are bought, sold, and produced.

What is the CPG industry?

The CPG industry moves very quickly, owing to the fact that products are meant to be consumed at a rapid pace. This helps explain why it is also known as the “fast-moving consumer goods” or “FMCG” industry.

A more technical take on the CPG meaning in the retail space refers specifically to industry turnover rate relative to other goods industries. Durable goods are, by contrast, much less likely to be repurchased by a given customer shortly after they have gotten them. The packaging aspect is important as well—consumer packaged goods are designed to be easy to recognize and eye-catching. This detail, combined with the fairly low prices of goods sold in this sector, makes for very high competition between brands. After all, customers can exchange one trusted product for another with very little financial risk.

Challenges and competition

Among many challenges considered unique to companies in the CPG space is the relatively low availability of shelf space for their products. Retailers must make sure that the products they stock best reflect what their customers are actually interested in purchasing to make the most of the space they have on hand. Shelf life can be another issue for retailers to manage as some products are at high risk of expiration before they can be purchased in time. For suppliers, these same challenges arise, only they must ensure their products make the cut to remain in prominent positions on retailers’ shelves. This usually means consistent branding and product development investments must be made. Plus a sufficient quantity of products must be made to meet consumer demand.

Companies in the CPG industry also face fresh challenges in the ecommerce space as consumers around the world have begun shifting their purchasing habits to reflect a growing interest in delivery and convenience. In approaching this issue, many companies are turning to either integrated delivery sales models for consumables or a more ambitious, direct-to-consumer model that leverages their brand name recognition among target customers.

Learn more about CPG with Lytics

Knowing the full CPG meaning as outlined above is especially important to organizations interested in launching their own fast-moving product lines or selling those of other businesses. The CPG industry is one of the largest in all of North America, with an incredible annual value of more than $2 trillion. Capitalizing on this sector’s projected growth and existing abundance of consumer participation can prove highly rewarding if you know what makes it work the way it does.

Facing the CPG industry’s challenges head-on can help novel upstarts and established veterans alike to succeed in the space. Seeking out new supplier-retailer relationships and building your brand’s market base with better marketing can make a major difference.

Lytics is here to help—offering a powerful marketing customization solution made to enhance modern marketing strategies. Learn more about Lytics by giving it a try today.