Consumer Packaged Goods: CPG Examples and Trends (2024)

When was the last time you purchased boxed food, soap, or toothpaste? In case you’re like many consumers, you buy these items several times a month. These products—prepared foods, toiletries, and the like—are consumer packaged goods (CPG), and so they are a part of a multitrillion-dollar industry.

Consumer packaged goods are stalwarts of brick-and-mortar retail, and so they’ve change into a serious a part of the ecommerce economy. Here’s an summary of CPG, including major trends within the industry.

What are consumer packaged goods (CPG)?

Consumer packaged goods (CPG) are nondurable products people purchase and devour quickly. You’ll be able to typically find them in grocery stores, pharmacies, and convenience stores. Three things define a CPG: a high turnover rate, a necessity to on a regular basis life, and consistent consumer demand. Examples of consumer packaged goods include:

• Food. Snacks, cereals, frozen meals, and beverages.

• Home items. Cleansing supplies, toilet paper, and batteries.

• Personal care items. Cosmetics, toiletries, hygiene products, and over-the-counter medications.

Consumer packaged goods should not the identical as durable goods, a distinct style of consumer goods that last for years, if not a long time. The CPG sector is very competitive, with manufacturers and retailers specializing in brand loyalty, promoting, packaging, pricing strategies, and distribution networks to capture market share.

CPG vs. FMCG: What’s the difference?

FMCG, or fast-moving consumer goods, is a subset of CPG that refers to products with particularly fast turnover rates. These things fly off the shop shelves, constituting each day or weekly purchases. Examples of FMCG include basic necessities like bread, milk, eggs, and bathroom paper, and highly consumable items like coffee, snacks, and soda.

CPG is the broader category encompassing all these incessantly purchased items, while FMCG specifically focuses on the fastest-selling ones. CPGs can vary widely in cost and packaging size; FMCGs typically have a lower cost per unit and are sold in higher volumes. FMCGs are sometimes perishable, but this shouldn’t be all the time the case. As an example, milk is an FMCG, but so is Coca-Cola.

Trends within the CPG industry

Valued at roughly $2 trillion, the North American CPG industry is experiencing significant growth and transformation. Driven by aspects like population shifts and evolving consumer preferences, the industry will likely undergo major changes in the approaching years.

CPG growth

Consumer spending on CPG products may approach $2.8 trillion by 2029, fueled by several key aspects:

• Rising disposable income. Increasing incomes in emerging markets have driven consumer spending on CPG brands in recent times.

• Population growth. A growing global population will create a bigger consumer base for CPG, as a part of an overall growth in demand for goods and services.

• Evolving consumer preferences. Consumers increasingly seek healthier, sustainable, and personalized products.

Market potential

Three forces shape the market potential for CPG:

1. Latest international markets. Emerging markets like China, India, and Southeast Asia offer immense potential for CPG growth on account of their large and rapidly growing populations.

2. Ecommerce. The rise of CPG ecommerce and omnichannel shopping creates latest opportunities for brands to achieve consumers directly and offer personalized shopping experiences.

3. Latest technologies. Technological advancements like artificial intelligence and data analytics might help CPG corporations optimize their global supply chain, while CPG marketers higher personalize their outreach.

CPG industry changes

Over the past several years, the CPG industry has shown a big shift toward:

• Health and wellness. Customers increasingly prioritize healthy ingredients of their food and private care products, and retail stores are dedicating more shelf space to these things in response.

• Health care. Diving deeper into the wellness sector, the CPG market is showing growth in non-prescription medications and over-the-counter health supplies, comparable to pain relievers, cold remedies, vitamins, and residential remedies.

• Direct-to-consumer (D2C) models. More CPG corporations are bypassing traditional retail stores and selling on to consumers online, offering greater control and data insights.

• Private-label brands. Retailers are increasingly developing private-label brands, offering high-quality products at a competitive price.

An example of a CPG company

When Heyday Canning launched its line of canned beans, cofounders Kat Kavner and Jaime Lynne Tulley believed they might sell consumer packaged goods that stood out from the usual offerings of competitors. “Canned food is that this massive industry, but it surely’s just not something that’s top of mind, since the food that fills those shelves is, , pretty boring—lots of low-cost commodity stuff,” Kat says on the Shopify Masters podcast. “There’s nothing particularly modern or exciting or flavorful.” That modified when Heyday rolled out canned beans made for consumers who value flavor and premium quality—but still just like the convenience of just grabbing a can from their pantry.

Breaking into the CPG market will be particularly difficult. In any case, CPG products are likely to be easily interchangeable, and consumers often purchase from established brands out of habit. “The important thing metric in CPG is velocity,” Kat says. “What number of units in a given store in a given week for every item are you selling?” For Heyday, an in depth marketing push helped keep its products top of mind for consumers—and keep sales volume at a sustainable level. Free in-store samples, coupons, and well-funded viral marketing campaigns all helped establish the Heyday brand.