In retail sector you might used to hear the words “CPG (Consumer Packaged Goods) and FMCG (Fast-moving Consumer Goods). There are distinctions between FMCG and CPG that may help you better understand the nuances of navigating the retail industry.
Consumer Packaged Goods area sold just a bit more slowly than brands technically termed as FMCG. For examples when you do weekly groceries you buy face mask , it’s not as “fast-moving” a consumer good as toilet paper, or something that goes in your grocery cart every week, but it is still relatively cheap, and purchased with relative frequency. While FMCG refers to products that consumers use almost evert day such as soap, detergent, shampoo, cooking oil, and potato chips. CPG and FMCG products are regularly purchases, but FMCG is a subset of CPG , a product that just sell a bit faster.
One of the most important differences between CPG and FMCG is the way we talk about sales. For example, a brand sells a million dollars worth of milk (286,000 units sold) and this same brand sells a million dollars worth of multi-cat litter (71,000 units sold). These are very different sales achievements. Even the milk price per volume cheaper than multi-cat litter. It’s a lot easier to achieve volume in milk sales – an FMCG used every day – than in multi-cat litter sales.
Apart from CPG and FMCG difference, their similarity for a consumer are they are a frequent purchases item, low engagement (almost no effort to choose the item), low price, short shelf time, a rapid consumption item. While for marketer CPG and FMCG known as high volume industry, has low contribution margins, extensive distribution, high inventory turnover.