The Consumer Products & CPG industry comprises a wide variety of goods that consumers buy regularly. They are often inexpensive, sold in large quantities, and have short shelf lives. Since consumer packaged goods are frequently used, the industry is highly competitive, with limited shelf space. In addition, companies can quickly increase their market share and revenue through their products. Consumer packaged goods also include fast-moving consumer goods, or FMCG. Due to their high demand, retailers often have to replenish their shelves regularly.
Today, there are many ways to market and distribute your products, from direct mail to online sales. Many companies have launched online stores or partnered with traditional brick-and-mortar stores to reach a larger audience. These efforts are helping CPG companies diversify their distribution channels and reach new segments of the population. Changing consumer preferences are forcing companies to rethink their marketing strategies, and to adapt to these new ways of communicating with consumers.
One area of constant concern for CPG companies is globalization. As the industry expands globally, it must stay informed on the impact of global events. The ratification of NAFTA, BREXIT, and ongoing trade talks will all impact the industry. Tariffs, import and export quotas, and economic viability all have an effect on the way products are sold and sourced. The CPG industry is not immune to climate change, however.
In times of economic uncertainty, CPGs continue to sell well, despite the decline in sales of durable goods. While the economy is shaky, people are more likely to hold onto cash than to replace a durable product, such as a television. Similarly, people may choose to keep older and less expensive products, such as washing machines, to stretch the life of their cars. However, CPG staples, such as cereal and toilet paper, do not seem to be influenced by these market conditions.
In order to manage complexity in the CPG industry, companies must distinguish between strategic portfolio growth and costly SKU proliferation. In the confectionery category, for example, companies are required to have a wider range of SKUs and seasonal products. While a diverse portfolio can create new opportunities, it can also increase risk and diminish profitability. By assessing the complexity of the Consumer Products & CPG industry, companies can invest in value-adding activities and avoid potential value-diluting complexity.
However, CPGs have their own unique selling dynamics. While FMCGs are a relatively fast-moving commodity, cosmetics still tend to be inexpensive and purchased frequently. Therefore, companies using retail analytics can increase their sales and invest in the products that are selling best. This is critical in any CPG manufacturing business. And in addition to retail analytics, CPG manufacturers can also benefit from the insights of customer preferences by focusing on products that are selling at a higher rate.
A consumer products and CPG industry has become highly competitive. Consumer packaged goods are goods that consumers consume almost every day, whether it is coffee or soda, toilet paper, tissues, or other products. The industry is also highly competitive, and companies aim to maximize their revenue by selling their products to consumers and retailers. Marketing plays a significant role in CPG companies, as it helps to build a stronger bond between consumers and their brands.
While traditional consumer-centric companies are largely focused on price and quality, consumers are increasingly concerned with the collaborative experience they get when they purchase a product. If a CPG fails to meet the expectations of its consumers, they will likely quickly move on to a competitor. A company with a streamlined supply chain is well-positioned to respond to heightened uncertainty. And in today’s rapidly evolving consumer behavior, CPG firms are making innovative use of digital technology to improve their product life cycles.