FMCG Characteristics

Fast moving consumer goods (FMCG)  – or Consumer Packaged Goods (CPG) – are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items.^[1] Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be large.

The term FMCG refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year.This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years.

FMCGs have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs – such as meat, fruits and vegetables, dairy products and baked goods – are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products have high turnover rates.

The following are the main characteristics of FMCGs:^[1]

• From the consumers' perspective:
  • Frequent purchase
  • Low involvement (little or no effort to choose the item -- products with strong brand loyalty are exceptions to this rule)
  • Low price
• From the marketers' angle:
  • High volumes
  • Low contribution margins
  • Extensive distribution networks
  • High stock turnover