A consumer’s needs are varied and are driven by several factors, including location, price, and quality. As a result, CPGs often sell well even in times of recession. For example, consumers are more likely to hold onto their cash during uncertain times and will tend to buy products that have been in production for a long time. Durable goods, like cars, may not sell well in an economic slump, but CPG sales will continue to grow even during such times.
Some examples of CPGs are toilet paper and deodorant, but other products include packaged food, coffee, and water. These products are necessary for everyday use, and companies manufacture them in order to meet these needs. Consumers may buy one of these products to use it immediately, but if they want to maintain the quality of the product, they can always buy a new one. And, unlike CPG items, these goods typically require more frequent replacement and are more expensive.
In addition to this, climate change is a growing threat to the CPG industry. With climate change concerns increasing, CPG companies need to consider ways to adapt their risk management and security programs. When major climate events occur, they can impede the production process and impede the flow of goods to end consumers. These challenges are often met through various CPG-specific risk management solutions, such as a global data analytics system.
The current market landscape highlights the need for active management to avoid erosion of profitability and productivity. Companies need to refocus their efforts to meet the new demands of consumers. By incorporating digital solutions, they can improve their business by improving their products’ experience and increasing their profitability. Consumers are increasingly demanding of a collaborative product experience. Those who can’t provide that experience will quickly move on to a different brand.
Another feature of CPGs is package branding. Many of these companies differentiate their products with bright orange containers to stand out on the shelves. While CPGs have great revenue potential and are sold in large quantities, they face high competition. Competition is fierce in the industry, as a range of brands compete for limited shelf space and consumer dollars. Despite these factors, consumers are still likely to spend time thinking about a new laptop purchase before making a final decision.
Digitalization has brought about an evolution of the consumer goods industry. CPGs have traditionally been sold in brick and mortar stores. Now, however, consumers are increasingly buying CPGs online. For example, the “click and collect” model allows consumers to purchase CPGs from the comfort of their homes and get text messages when their orders arrive. The business services offered by Amazon allow customers to purchase CPGs and receive next-day delivery.
Brand integrity is also crucial for CPG brands. A brand’s packaging can increase or decrease consumer loyalty, and companies should protect their intellectual property from being stolen. Intellectual property theft and infringement can damage the company’s reputation, negatively impacting the bottom line, and stifling innovation. Furthermore, counterfeit pharmaceutical and cosmetics are not only illegal, but can also pose a health or safety risk. In such cases, it is crucial for CPG companies to ensure that their brands are marketed and advertised according to consumer demand and perceptions.
When comparing CPG and FMCG, it’s essential to understand the differences between the two. While FMCG products are marketed as fast-moving consumer goods, CPG brands are sold at a slow pace. A brand that is selling million dollars of milk will sell a million copies faster than a similar product in FMCG. Therefore, a manufacturer of milk will sell more milk than a brand of cat litter, for example.
The consumer packaged goods industry includes the retail and wholesale industries. The retail industry focuses on the sale of finished products to end consumers. Retailers include brick-and-mortar stores and e-commerce sites. The consumer products and CPG industry encompasses the entire supply chain and involves any individual or company involved in the production, selling, and marketing of finished goods. Retailers can be privately held or publicly traded and can include individual companies and large multi-store retail chains.