Fast-moving consumer goods

Fast-moving consumer goods (FMCG), also known as consumer packaged goods (CPG) 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.^[1]^[2]^[3]

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.

Characteristics

The following are the main characteristics of FMCGs:^[1]

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

Shelf space

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.^[4]

Consumer packaged goods companies

Well-known CPG manufacturing companies include:^[5]

Rural consumers

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^[6] and generate employment for more than three million people in downstream activities.^[7]

ISIC definition

The retail market for FMCGs includes businesses in the following International Standard Industrial Classification (ISIC) (Revision 3) categories:^[8]

ISIC 5211 retail sales in non-specialized stores
ISIC 5219 other retail sales in non-specialized stores
ISIC 5220 retail sales of food, beverages, and tobacco in specialized stores
ISIC 5231 retail sales of pharmaceutical and medical goods, cosmetic and toilet articles
ISIC 5251 retail sales via mail-order houses
ISIC 5252 retail sales via stalls and markets
ISIC 5259 wholesale goods
ISIC 5269 wholesale medical prescriptions

Supplier industries for FMCGs include:

1511 meat and meat products
1512 fish and fish products
1513 fruit and vegetables
1514 vegetable and animal oils and fats
1520 dairy products
1531 grain mill products
1532 starches and starch products
1533 animal feeds
1541 bakery products
1542 sugar
1543 cocoa, chocolate, and sugar confectionery
1544 macaroni, noodles, couscous
1549 other food products
1551 spirits, ethyl alcohol
1552 wines
1553 malt liquors and malt
1554 soft drinks, mineral waters
1600 tobacco products
2101 pulp, paper and paperboard
2102 corrugated paper containers
2109 other articles of paper and paperboard
2424 soap and detergents, cleaning preparations, perfumes
2430 men's and women's inner garments, shaving gels, deodorants, personal care, home care

References

^ ^a ^b Ramanuj Majumdar (2004). Product Management in India. PHI Learning. pp. 26–27. ISBN 978-81-203-1252-4. Archived from the original on 2023-07-01. Retrieved 2010-06-19.
^ Sean Brierley (2002). The Advertising Handbook (2nd, illustrated ed.). Routledge. p. 14. ISBN 978-0-415-24391-9.
^ Nellist, George (2022-10-06). "By looking to nature, health products manufacturer Melaleuca is breaking barriers". Digital Journal. Archived from the original on 2022-10-09. Retrieved 2022-10-09.
^ Williams, Jennifer (2024-08-14). "'Stress on Shelves'—the Battle for Space in Store Aisles". The Wall Street Journal. Retrieved 2024-08-15.
^ Jesse; Jesse (2020-04-30). "Top 10 Largest CPG Companies by Revenue in the World 2020 | CPG Industry Factsheet". Bizvibe Blog. Archived from the original on 2022-10-09. Retrieved 2022-10-09.
^ "Indian FMCG Industry Analysis". www.ibef.org. Archived from the original on 2020-02-25. Retrieved 2020-02-25.
^ Singaravelu, Dr. K. (October 2013). "Rural Consumer Behaviour on Fast Moving Consumer Goods" (PDF). Archived (PDF) from the original on 2018-10-08. Retrieved 2018-10-07.
^ Aydın Çelen; Tarkan Erdoğan; Erol Taymaz (June 2005). "Fast Moving Consumer Goods Competitive Conditions and Policies" (PDF). Economic Research Center, Middle East Technical University. Archived from the original (PDF) on 2017-12-15. Retrieved 2007-07-09., p.2-4