What Exactly Defines a Consumer Packaged Good?
There are certain terms that you’re bound to hear being thrown around when you delve into advertising jargon. This happens in every specialized sector of business.
One of the most common of these terms is CPG or Consumer Packaged Goods. Let’s look at what a CPG is and how it differentiates from other types of goods in the market.
What is CPG?
You may be thinking, “What is considered a CPG?”; this refers to a consumer-packaged good. These are goods that are sold quickly and are packaged for daily use.
Such items include highly perishable foods such as milk, bread, or other products, such as over-the-counter drugs. CPGs exists to help people meet their basic day-to-day needs.
Is CPG the same as FMCG?
Many people question the difference between a CPG and a FMCG, but that difference is a trivial one. FMCG refers to fast moving consumer goods. In essence, FMCG is just a synonym to CPG.
They both refer to the same thing, and the differentiating factor will more often than not be based on the choice of word usage.
The core remains that, when someone refers to FMCG, it’s the same thing as when that person refers to a CPG. A product is qualified to be a CPG if:
- It’s replaced frequently
- It’s sold quickly
The difference between CPG and retail
Many people tend to confuse CPG and retail. If you ask most people, “What is the difference between CPG and retail?”, you are most likely not going to get a conclusive answer.
However, retail is a point of sale that sells a particular product to the end users. You can think of the retail store around your block or even a mall. They intend to sell to a person that will put the product to direct use.
In this case, retail performs some specific tasks:
- Breaks bulk for the end consumer
- Displays products conveniently for the consumer
- Offers variety to the end consumer
- Bargains on behalf of the end user
CPG is a term that refers to the purpose or nature of a product. They are products that are used by end consumers in their current state without any further processing.
In most cases, CPGs are the same products that retail stores will be selling. Many of the products that we see, whether online or in retail stores, such as a gallon of milk, are CPGs that are sold through the help of retailers.
CPG companies focus on retailers or wholesalers as their customers. Rarely will such companies have any interaction with the end user.
CPG vs. Retail
CPG companies are focused on creating value and convenience for retailers and their customers. The role of these companies is manufacturing. Retailers, on the other hand, play the middleman, distributing the goods to the end user.
This means that they control the market and determine prices. However, these two need each other to function well.