What are consumer packaged goods?
Consumer packaged goods (CPG) are items of daily consumption and replacement. These include groceries, clothes, personal care, and other household products. This market is highly competitive since consumers can easily opt for one product over another due to the availability of choices as well as the low costs associated with switching brands.
On the other hand, the buying frequency for consumers is stable in this sector. Consumers often purchase groceries at regular intervals and even subscribe to items such as milk for daily delivery. Because of the consistent buying pattern, brands that are successful in delivering a quality product with a competitive price stand to benefit.
The CPG industry has witnessed sustained growth with a current valuation of $598.9 billion in North America and $20 million in India. The flipside is that brands must fight for shelf space in supermarkets and remain competitive in terms of price and positioning.
Consumer packaged goods versus durable goods
|Consumer packaged goods||Durable goods|
|Have a short lifespan, are cheaper, and meant to be consumed quickly||Have a long lifespan and are more expensive, with consumers giving more thought and planning before purchasing them|
|Packaged in easily recognisable wrapping that consumers can identify on a supermarket shelf||Packaging and branding irrelevant as they are not sold off the shelf|
|Comparatively less affected by economic and other disruptions as they are essential items||Often face the brunt of economic slumps since they are expensive and consumers may want to squeeze a few more years out of them|
|Examples include cosmetics, frozen foods, baby care products, groceries, and beverages||Examples include automobiles, refrigerators, washing machines, air conditioners, and kitchen appliances|
CPG industry in the digital age
Consumer products were traditionally sold in brick-and-mortar stores. But the shelf space was finite, and the choices for consumers were limited. With digital platforms selling CPGs and businesses utilising end-to-end BPM services, the CGP industry is currently witnessing a major transformation. With subscription-based models, extremely competitive pricing, and a range of choices, consumers are opting to order on a mobile app than going to a next-door grocery store.