Definition

Consumer packaged goods (CPG) are products that require frequent replenishment, as opposed to those with longer replenishment cycles.

These items span across various categories, including:

• Food & beverages
• Clothing
• Personal care items
• Pet food
• Household and cleaning products

Examples of well-known CPG brands include L’Oréal, Pepsi, Nestle and Procter & Gamble.

Two main types of consumer goods exist: fast-moving consumer goods (FMCG) and slow-moving consumer goods (SMCG). The distinction between them lies in the speed at which products are sold to consumers, which determines the inventory turnover ratio.

Fast-Moving Consumer Goods (FMCG)

Fast-moving consumer goods (FMCG) are products with a shelf life of less than one year. This category includes food and beverages, personal care items, household and cleaning products, and pet food.

FMCGs are usually priced lower than SMCGs or durable goods, have a short shelf life (less than a year), and have wide retail distribution through brick & mortar and online availability through eCommerce channels.

Slow-Moving Consumer Goods (SMCG)

Slow-moving consumer goods (SMCG) refer to products that have a relatively longer replenishment cycles compared to fast-moving consumer goods (FMCG). This category includes products like home appliances, furniture, and furnishings.

The distinction between slow-moving consumer goods and fast-moving consumer goods lies in the pace at which they are sold and restocked. SMCG items tend to have a lower inventory turnover ratio, meaning they remain on store shelves for a longer period before being purchased and replenished.