CPG stands for consumer packaged goods. It is a type of commodity that consumers use or consume every day.
Those that fall under the category of CPG are in need of constant replacement unlike other products that users can use for a long time.
Marketing CPG is often tricky since there are many similar products on the market and because of consumer behavior. Consumers of CPG may switch to similar products because of a more competitive pricing scheme.
The CPG market
A consumer product good includes clothing, beverage and food tobacco and household products, to name a few.
The CPG is a very competitive industry but a large one. For example, in Northern America, CPG has a value of around $2 trillion.
Retail vs. CPG
Many people get confused over consumer product goods and retail. Retail pertains to the selling of the products to the consumers or users.
CPG, on the other hand, is broader since CPG’s composition includes the sellers and manufacturers of the physical product which later on is sold by the retailers.
The popular retailers are Costco, Target, Walmart and Amazon, to name a few, and all of them sell CPG.
Simply put, a retailer can be found at the end of the supply chain, but the CPG firm is one step below the end process since they manufacture the goods. CPG firms also sell their products, but they sell in bulks or in wholesale.
There are good examples of CPG firms such as the large ones like Unilever, Proctor and Gamble, Clorox and Johnson and Johnson. These firms manufacture every day products like soap, household items, among others.
There are also some CPG companies that also act as retailers since they manufacture and sell their products on their stores. Examples of companies that manufacture and sell in their stores include high-end brands like Prade, Dolce & Gabanna, DKNY, Nike and Adidas just to name a few.