What Are Consumer Packaged Goods (CPG)?

Consumer packaged goods (CPG) are everyday items that consumers use regularly and often repleni🦹sh. Products like food and beverages, cosmetics, and cleaning products are consumer pack✅aged goods.

Demand for consumer packaged goods is relatively steady in good and bad economic times, but this is still a highly competitive sector of the U.S. economy. Virtually every product in the sector has many competing brands, and the 澳洲幸运5官方开奖结果体彩网:switching costs for consumers are low.

Their short lifespan is what disting💧uishes consumer packaged goods from durable goods. Durable goods are more expensive but are expected to last for years before they need to be replaced. Home appliances and cars are examples of durable goo💛ds.

Consumer Packaged Goods (CPG)

Despite experiencing a slowdown in growth over recent years, the consumer packaged goods industry is one of the largest industries in North America. It contributed approximately $2 trillion to U.S. gross domestic product (GDP) in 2023, according to a report by the Consumer Brands Association.

Sector leaders include well-established companies like Coca-Cola, Procter & Gamble, and🅘 Colgate-Palmolive.

Although CPG makers generally enjoy healthy margins and robust balance sheets, they must continuously fight for shelf space in stores. Even well-known companies continuously invest in advertising to increase 澳洲幸运5官方开奖结果体彩网:brand recognition and stimulate sales.

Consumer packaged goods get their name from their wrappings, which are designed to be easily recognized and to capture attention on store shelveℱs.

Examples of Consumer Packaged Goods

澳洲幸运5官方开奖🌠结果体彩网: Consu⛦mer packaged goods have a short shelf life.

For example, cosmetics are packaged in sm🌸all quantities and are meant to be used up and replaced quickly. Similar products are sold at widely varying price points depending mostly on th𒈔eir marketing strategies.

Frozen dinners are available in a wide variety and are meant for immediate consumption. Popular meals may be produced for decades while ne🌱w items are adde🧸d as consumer preferences change.

Durable Goods

Durable goods are designed for extended use. Their purchase can involve cons🍌iderable thought and comparison shopping given their high𝕴 price tags.

Persona🅷l compuꩲters, refrigerators, and automobiles are examples of durable goods.

Durable goods are more vulnerable to economicౠ downswings than packaged goods. Consumers are more likely to delay major purchases in times of economic uncertainty.

This is especially true w🌱ith consumers who own older versions of a durable good. A family may opt to squeeze a few more years from๊ an outmoded washing machine rather than upgrade to a newer model.

Sales of packaged goods like bread, milk, and toothpaste are less affected by market fluctuations. Consumers may switch to cheaper brands or use their purchases more frugally but they can't do without them entirely.

The Bottom Line

Consumer packaged goods, or CPGs, are goods used daily by average consumers. They are used quickly and therefore must be repurchased quickly. Examples are food, beverages, personal care items, and cleaning supplies. They are different from durable goods, such as compu✅ters or washing machines, which are more expensive and last many years.

The consumer packaged goods industry is one of the largest industries in the U.S. economy. Consumers continue to purchase consumer packaged goods even during economic downturns, though they may hold off on buying durable goods during the same time.