Fast-moving consumer goods

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Fast-moving consumer goods (FMCG), also known as consumer packaged goods (CPG)^[1] or convenience goods, are products that are sold quickly and at a relatively low cost. Examples include non-durable household goods such as packaged foods, beverages, toiletries, candies, cosmetics, over-the-counter drugs, dry goods, and other consumables.^[2][3][4]

Fast-moving consumer goods have a high inventory turnover and are contrasted with specialty items, which have lower sales and higher carrying charges. Many retailers carry only FMCGs, particularly hypermarkets, big box stores, and warehouse club stores. Small convenience stores also stock fast-moving goods; the limited shelf space is filled with higher-turnover items.

The following are the main characteristics of FMCGs:^[2]

• From the consumer perspective
  • Frequent purchases
  • Low engagement (little or no effort to choose the item)
  • Low prices
  • Short shelf life
  • Rapid consumption

• From the marketer perspective
  • High volumes
  • Low contribution margins
  • Extensive distribution
  • High inventory turnover

Between 2009 and 2023, shelf space in the U.S. supercenters and supermarkets decreased by 5 and 3.3 percent, respectively. This reduction has intensified competition for shelf space among brands, as the number of products available has increased. Retailers often charge slotting fees to brands for product placement. While some well-established brands may avoid these fees, the average cost can range from $100 per item per store to significantly higher amounts.^[5]

Well-known CPG manufacturing companies include:^[6]

• Nestlé
• Procter & Gamble
• Essity
• PepsiCo
• Unilever
• AB InBev
• L’Oréal
• Coca-Cola
• Mondelez International
• Mars Wrigley
• Kraft Heinz
• Heineken
• Kellogg's
• Atlante UK

Consumers in rural areas typically purchase goods from nearby towns and villages. Recently, a shift in consumer purchase behavior toward purchasing locally has prompted the need for better local promotional efforts to generate brand awareness in small towns. FMCGs play a large part in the economy, as they are inelastic products that touch every part of consumer life. Businesses that supply FMCGs to rural communities can help provide employment opportunities and reduce the cost of such products in those rural areas. For instance, FMCGs represent the fourth-largest sector in the Indian economy^[7] and generate employment for more than three million people in downstream activities.^[8]

The retail market for FMCGs includes businesses in the following International Standard Industrial Classification (ISIC) (Revision 3) categories:^[9]

Supplier industries for FMCGs include:

• Category management
• Mass production
• Trade promotion management
• Shelf-ready packaging