What is a CPG? Definition, Examples, and Tips for Success

By Indeed Editorial Team

Updated September 1, 2022

Published November 30, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

There are different types and categories of products that consumers purchase for short-term and long-term use within the retail space. One variety of items are consumer packaged goods, or CPG. Learning about consumer packaged goods can help you become more confident in understanding this competitive product-based industry. In this article, we discuss the definition of consumer packaged goods, identify the types of consumer products, explore various examples of these items, and offer several tips for working within a successful CPG company.

What is a CPG?

If you work in retail, marketing, or manufacturing, you may wonder how to answer the question, "what is a CPG?" A CPG, or consumer packaged good, is an item that customers purchase and use frequently. Because an individual uses this type of product daily, the average user replaces or replenishes the product consistently. Some examples of consumer packaged goods, also known as fast-moving consumer products, include food and beverages, clothes, and household cleaning supplies.

CPGs typically have short lifespans, as customers use the products quickly and then replace them with more. As a result, consumer packaged goods are a highly competitive and heavily saturated industry, with many large companies offering similar products at low costs. In addition, manufacturers use easily recognizable packaging for consumers to identify the brand on store shelves, making marketing and advertising an essential component of the success of a CPG.

Types of consumer products

Economists group consumer products into one of two categories, durable and non-durable goods. Each segment has specific characteristics that make it different from the other:

Durable goods

You can identify durable goods by their lifespan and frequency of purchase. They have a long time of usage because of their durability of design, manufacturing, and quality. The retail industry recognizes durable goods to have a minimum life of three years. Therefore, a customer buys durable goods less frequently and considers them as more expensive purchases. Examples of durable goods include:

home electronics, such as televisions, stereo systems, and home computers
automobiles and motorcycles
home appliances, such as laundry washers and dryers, refrigerators, stovetops, and dishwashers
furniture, such as recliners, beds and mattresses, and dining tables
lawn and garden equipment, such as lawnmowers, garden tractors, and chainsaws

Non-durable goods

As with durable goods, you can identify non-durable products by their limited lifespan and greater purchasing frequency. Companies design and manufacture non-durable goods for single use or a limited amount of service for the consumer. These products last for less than three years and require consistent or frequent purchasing. Non-durable products are products used daily by customers and have a lower cost than durable goods. Examples of non-durable goods include:

packaged foods and beverages
footwear
clothing
vitamins and nutritional supplements
hair care products

Examples of consumer packaged goods

Because customers routinely purchase consumer packaged goods, most people have many of these items in their homes and work environments. Some examples of consumer packaged goods include:

Related: What Are Fast-Moving Consumer Goods (FMCG)? (With Examples)

Packaged foods

A typical example of CPG includes packaged or processed foods. People purchase and consume these items regularly, and there is strong brand awareness for specific food items. Customers become loyal to a brand and may specifically seek it out. Prices within this category are competitive, with intensive marketing strategies targeted to particular target audiences. Examples of packaged foods within consumer packaged goods can include:

chocolate bars, candies, and gum
snack foods, such as potato chips, popcorn, ice cream bars
crackers, cookies, and biscuits
perishable packaged foods, such as milk, yogurt, margarine, and orange juice
packaged fruits and vegetables, such as salad mixes, frozen fruit, and pre-cut vegetables

Beverages

Beverages represent a highly competitive industry in consumer packaged goods. Because of targeted advertising and effective marketing strategies, consumer beverages are in high demand. Even though customers may consider beverage purchases essential, such as water, milk, or juice, manufacturers still use influential packaging and product placement to draw attention to their brand. Examples of beverages within the consumer packaged goods space include:

bottled water
juices
milk and dairy-free drinks
carbonated drinks
coffee, tea, and hot chocolate mixes or pre-mixed drinks
alcoholic drinks, such as beer, coolers, and pre-mixed beverages

Cosmetics and personal care products

Cosmetics and personal care products are examples of consumer packaged goods. Customers consistently purchase and use these products and replenish them often with new supplies. Cosmetic brands may focus on a specific target market and change their products within the season. For example, a cosmetic company may launch a new makeup colour palette for spring or autumn. Personal care products offer a wide variety of consumer packaged goods that are readily available to customers. Examples of cosmetics and personal care products within consumer packaged goods include:

shampoos, conditioners, and hair styling products
body lotions, shower gels, and bath soaps
feminine hygiene products
toothpaste, disposable toothbrushes, mouthwash, and dental floss
deodorant, disposable razors, and shaving cream

Over-the-counter medication

Another example of consumer packaged goods is over-the-counter or OTC medications. Customers purchase these items to treat or prevent health conditions or issues. Medical supplies such as bandages, medical tape, and ointments also fall into this category. Individuals routinely purchase OTC medications, as they have a short shelf life and require frequent usage. Prescription medications don't apply to this category, as they require a doctor's prescription, which makes their availability less accessible. Some examples include:

allergy and anti-nausea medications
headache or pain-relieving pills or ointments
first aid care products
vitamins, minerals, and nutritional supplements

Paper products and cleaning supplies

People use cleaning supplies and paper products consistently, making them part of the consumer packaged goods category. These products have a short lifespan and require constant purchases to replenish supplies. Several examples of paper products and cleaning supplies include:

paper towels
toilet paper
facial tissue
laundry detergent
dishwasher detergent
dish soap
household cleaners
disinfecting spray

Tips for a successful consumer packaged goods business

Working within the consumer packaged goods industry is highly competitive. Staying on top of the latest trends and innovations can help ensure your success. Here are several tips to consider when working within a consumer packages goods business:

Related: 10 Key Entrepreneurial Skills You Need to Start a Business

Provide product research information for customers

Customers are becoming savvier with researching product brands before making a purchase. This trend also filters over to consumer packaged goods. Be sure to keep online content fresh and engaging while offering information to customers about your products. You can include a frequently asked questions section on the company website, post regular content on social media channels, and offer product ingredients, usage tips, or packaging details for added value.

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Encourage brand loyalty

With many consumer packaged goods industry segments being saturated, it's critical to encourage brand loyalty to stand out from the competition. Turning consumers from customers into advocates of the brand is vital to long-term success in the marketplace. Several ways you can do this include:

creating and sharing tailored content on social media channels
offering rewards or incentive programs for loyal customers
providing exclusive content or add-on products to encourage loyalty

Diversify opportunities for brand discovery

Because the consumer packaged goods industry is competitive, it's vital to the long-term success of a CPG company to diversify opportunities for customers to discover the brand. This means considering a variety of advertising platforms. Several examples include advertising on television, radio, podcasts, websites, social media platforms, magazines, and newspapers. In addition, many companies collaborate with retail sellers to promote their items by offering special pricing and advertising in weekly flyers. Using marketing materials in retail stores can also improve product visibility for consumers, letting them learn about the brand.

Have an online presence

As more consumers move from shopping in-store to online, it's essential to develop an online presence. Unfortunately, not all consumer packaged goods brands offer direct online shopping as they funnel their distribution through retail chains and stores. Regardless of whether a CPG company offers direct online shopping, there is a need to have a solid online presence. This can be as simple as having a product website for consumers to research product information, ingredients, or use of the item.

Consider marketing partnerships

Many consumer packaged goods companies are moving towards building marketing partnerships with other organizations. One such example is a potato chip company partnering with a wine brand. Their combined marketing focuses on creating a relaxing environment at home for consumers while watching movies and enjoying chips and wine. The benefit of this marketing strategy is combining two similar audiences for cross-promotion of non-durable goods. You can share the cost of advertising while increasing brand awareness of both products.