FMCG vs CPG — a comparison
What is CPG?
CPG’s full form is Consumer packaged goods; these are items that people buy regularly, such as apparel, cosmetics, and other household items. These items have a short shelf life and are designed to be used as soon as possible after purchase. Every consumer packaged good (CPG) company must contend with a fiercely competitive market and limited shelf space. However, because demand is great, success can swiftly result in revenue and increasing market share.
What is FMCG?
Fast-moving consumer goods, or FMCG, refer to products that can be sold fast and at a low cost. Because of the high turnover rate, retailers are required to refill the shelves frequently. This is either because they are perishable or because there is a strong demand for them in general.
CPG vs FMCG
Some may argue that CPG and FMCG are interchangeable. The first clue is that CPG’s name is noticeably devoid of the word “quick.” While CPG companies are still “quick,” they sell at a little slower pace than FMCG brands.
Consider the following scenario: You’re shopping at your favorite local big-box retailer. You go in to get your weekly groceries, but you also stray into the cosmetics aisle and buy a new nail polish color or a face mask for yourself. It’s not a “fast-moving” consumer commodity like potato chips or something you buy every week at the supermarket. It is, however, still reasonably priced and is purchased regularly.
What are the primary distinctions between CPG and FMCG?
One of the most important differences between CPG and FMCG is the language we use when discussing sales. If you are employed in the retail sector, you need to be aware of how these differences affect the velocity of sales. Assume for a moment that a dairy company makes a million dollars from milk sales. Assume that the same company sells cat litter valued at a million dollars. These are two quite different sales achievements. Selling a lot of milk, a common FMCG, is far simpler than selling a lot of litter.
The way these names are used throughout the nation is another distinction between them. It’s evident that North American industry professionals favor using CPG. On a global scale, though, FMCG seems to be the accepted acronym.
How to use retail data in the FMCG and CPG industries?
One of the most important methods for a CPG manufacturing company to increase sales of both CPG and FMCG products is through retail analytics. If you don’t know which products are selling the quickest and in which countries, you run the risk of falling behind. If you know that one of your products sells more quickly than the others, you can deliberately invest to increase sales velocity and secure greater distribution. Additionally, you must understand how to employ store sales skills and consumer preferences to modify your strategy to the extent necessary, given your product range.
The bottom line: It’s critical to understand FMCG and CPG
Gaining insight into the technical terms employed by consumer packaged goods companies will enhance your comprehension of your clientele and forge closer relationships with retailers. A mistake in your CPG pitch deck could hurt your chances of getting more distribution, so you don’t want that to happen. Although they are both non-durable goods, their sales velocity is what really sets them apart. Consequently, it makes sense that FMCG sells a little bit more quickly than CPG in the CPG vs. FMCG comparison. We can use our creativity to create two groups within the nondurable items if we look at how quickly one product could be sold over another. It’s important to keep in mind, though, that FMCG and CPG refer to the same product category.
