Consumer Packaged Goods (CPG)
What Exactly Are CPGs (Consumer Packaged Goods)?
Food, beverages, clothing, cigarettes, cosmetics, and home products are examples of consumer packaged goods (CPG) that need to be replaced or replenished on a regular basis.
While consumer demand for CPGs is relatively stable, the industry remains extremely competitive due to high market saturation and low consumer switching costs, allowing customers to simply and inexpensively alter their brand loyalties.
Consumer Packaged Goods: An Overview (CPG)
Despite a recent slowdown in growth, the CPG business is one of the largest in North America, with a market capitalization of nearly $2 trillion, driven by well-known brands such as Coca-Cola, Procter & Gamble, and L'Oréal.
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Despite the fact that CPG manufacturers often have excellent margins and strong balance sheets, companies must constantly compete for shelf space in shops and engage in advertising in order to improve brand awareness and boost sales.
TAKEAWAYS IMPORTANT
Food, beverages, clothing, cigarettes, cosmetics, and home products are examples of consumer packaged goods (CPG) that need to be replaced or replenished on a regular basis.
Despite a recent slowdown in growth, the CPG business is one of the largest in North America, with a market capitalization of nearly $2 trillion, driven by well-known brands such as Coca-Cola, Procter & Gamble, and L'Oréal.
Durable Goods vs. Consumer Packaged Goods
CPGs are designed to be utilised fast and have a limited lifetime. CPGs are generally packed in clearly identifiable packaging that customers can instantly recognise, as the name indicates.
Cosmetics, like other CPGs, have short shelf life because they decay fast when exposed to high temperature changes. Individual packages of lipstick, blush, eye shadow, and foundation are inexpensively offered, and users either discard or recycle the empty containers after using the goods.
Another popular CPG item is frozen meals. These high-volume perishable foods are offered in stores all around the world, and are frequently purchased for immediate consumption by customers who routinely restock their favourite frozen dinners.
Unlike CPGs, which are cheaply sold and changed frequently, durable goods such as vehicles are meant to endure several years and be enjoyed for a long time. As a result, considering the higher price tags, purchasing a durable object usually necessitates a lot of consideration and comparative shopping.
People are more prone to hang on to their money in times of economic uncertainty, hence slowing durable goods sales are common during downturns. This is particularly true for customers who possess earlier models of a durable goods item. Instead of upgrading to a newer model, a family may decide to squeeze a few more years out of an old washing machine. CPG essentials like bread, milk, and toothpaste, on the other hand, are less influenced by market swings.
CPGs in the Digital Age: Special Considerations
Consumer packaged goods (CPGs) are rapidly being offered online, despite the fact that they have traditionally been sold in traditional brick and mortar establishments. Consumers who purchase using the "click and collect" approach receive text message confirmations that their order is on its way. Customers may buy CPGs and have them delivered the next day using Amazon's commercial services like Prime Pantry.
