CPG vs FMCG: The Similarities and Differences

Original Source: https://ecommerce-platforms.com/articles/cpg-vs-fmcg

Retail has its own jargon in the same way other sectors do. Two such acronyms you might have come across include CPG and FMCG. 

In a nutshell, the former stands for consumer packaged goods, while the latter refers to fast-moving consumer goods. 

For clarity, here’s a quick definition of both CPG and FMCG:

What is CPG?

Consumers buy CPG goods often and tend to use them soon after purchase; as a result, their demand is pretty high. 

It’s also worth noting that CPG prices are usually low, but sales volumes are high, so lots of sales can generate a healthy profit.

What is FMCG?

Fast-moving consumer goods sell quickly, have a short shelf life, and are purchased frequently. Like CPG, they’re also sold at a low cost and can sometimes (confusingly) be referred to as CPG and sometimes called FMCPG (fast-moving consumer packaged goods). 

In summary:

Both CPGs and FMCGs have the following in common:

Low cost

Bought frequently

Require little customer engagement

Used quickly

Sold in high volumes

Distributed widely

Have low-profit margins

Have a high inventory turnover

In this article

What are CPG and FMCG?

Types of CPG 

Types of FMCG

CPG vs FMCG: The Main Differences

CPG vs FMCG: The Similarities

CPG vs FMCG: Brand Strategy 

CPG vs FMCG: Marketing Approaches

CPG vs FMCG: Advertising

CPG vs FMCG: My Final Thoughts

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What are CPG and FMCG?

These terms are often used interchangeably, and products sometimes fall into both categories.

There are, however, some key differences, and we’ll look in more detail lower down. 

But, for now, the best way to think about CPG and FMCG is that although they’re incredibly similar, FMCG is kind of a subset of CPG, and goods that fall within it just happen to be consumed and sold faster than CPG. 

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Types of CPG 

Here are a few examples of different CPG types:

Beauty, toiletries, and personal care: cosmetics, makeup, skincare, haircare, deodorant, shower gel, toothpaste, soap, etc. 

Child and baby products: toys, diapers, baby food, formula milk, etc. 

Food and drink: packaged food (like potato chips), drinks, and other digestible goods

Household products: cleaning products and tools, small appliances, storage containers, detergents, and so on. 

Medicines: over-the-counter pharmaceutical remedies like painkillers, vitamins, supplements, and so on.

Pet products: pet food, pet toys, snacks, and so on for domestic animals. 

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Types of FMCG

Types of FMCG include:

Beauty and personal hygiene: toothpaste, shaving cream, razors, soap, body wash, and other items used daily by most consumers. 

Cleaning products: goods that sell fast and are used daily or often, such as dishwasher tablets, washing-up liquid, laundry detergents and fabric softeners, and house cleaning products. 

Drinks: that are bought by many consumers and consumed more than once a day, like tea, coffee, and soft drinks

Over-the-counter medicines: pain killers, antacids, and other remedies for day-to-day ailments.

Confectionery: items bought and eaten daily, such as chocolates, sweets, and chewing gum

Pet products: pet food

Paper goods: goods that are used quickly and regularly, like paper towels, toilet paper, and napkins

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CPG vs FMCG: The Main Differences

CPG products tend to be of occasional use and are sometimes durable goods; e.g., a bottle of shampoo won’t need to be used or replaced daily. 

In contrast, FMCG products are often part of daily life, so they sell faster and in greater volume. A sometimes cited example is milk vs cat litter. The former is easier to sell in larger volumes than the latter.

Another difference is that CPG businesses tend to invest money into brand development and aim for long-term customer loyalty. Conversely, FMCG businesses focus more on driving fast sales from a larger market. For example, in brick-and-mortar stores, FMCG products tend to be placed close to high consumer footfall areas to attract impulse buyers. For example, at checkouts and aisle ends. 

In short, CPG and FMCG brands take slightly different approaches to marketing to their target demographics (see below).

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CPG vs FMCG: The Similarities

Both can have a short shelf life. 

Both can vie for shelf space in physical stores.

Both are in high demand, low cost, and sold in high volumes.

Both tend to have mass market appeal and rely on hefty advertising and marketing campaigns to drive sales, customer loyalty, and brand awareness. 

Manufacturers of CPG and FMCG compete in a populated marketplace.

Larger FMCG and CPG companies often manage a range of brands that offer the same type of products that cater to different market segments, e.g., P&G with Olay skincare and SK-II luxury skincare.  

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CPG vs FMCG: Brand Strategy 

Given the competitive marketplace in which CPG and FMCG reside, companies in this arena need a strong brand strategy to increase sales and nurture brand loyalty. 

Part of any CPG and FMCG brand strategy must include market research and consumer product testing. 

However, marketing approaches will vary depending on what the products and target demographics are. 

Put simply, market research and consumer insights are essential (I.e., gathering data on consumer behaviors, preferences, and buying habits and keeping abreast of CPG and FMCG trends). 

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CPG vs FMCG: Marketing Approaches

It’s not an exact science, and you’ll find that in some instances, how CPG and FMCG brands market themselves is similar or the same. However, there are a few nuanced differences. 

For example, CPG marketing involves targeted campaigns aimed at particular consumer groups. Campaigns such as these often use a mix of traditional and more contemporary advertising methods. For example, print, TV, and radio in combination with digital channels, AI, email marketing, and social media. 

For instance, Nestle, PepsiCo, and Mars are apparently using an AI platform called Tastewise to help them with product ideas and market research reports. 

Some CPG businesses use influencers to engage with consumers and grow brand awareness. For example, the Grounded Food Co. uses TikTok influencers. 

As for FMCG marketing, this is often aimed at a broader target demographic, so mass marketing is the order of the day. This usually includes large-scale advertising and promotional campaigns, including various media channels like TV, online advertising, billboard ads, etc.

An example of mass marketing by an FMCG brand is McDonald’s. The brand frequently uses a mix of TV, billboards, and social media to promote its fast food. 

In addition, FMCG brands might also harness sponsorships to increase sales and build brand awareness. For example, Heineken beer sponsorship with the Formula One World Championship and Coca-Cola with the International Olympic Committee. 

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CPG vs FMCG: Advertising

As above, it isn’t an exact science. Still, broadly speaking, both CPG and FMCG use advertising to raise brand awareness and boost sales. 

Where CPG brands are concerned, they tend to focus on their products’ unique properties and benefits. For example, beauty products that promote anti-aging. 

CPG brands may also focus on specific demographics. For example, a brand might focus its attention on moms, like Target did when it created a range of sensory-friendly kids’ clothes. 

In contrast, FMCG brands might be more likely to use bigger and broader marketing tactics with mass appeal. Creative campaigns like this often focus on inciting humor and emotion to grab the attention of their customers. 

For example, the McDonald’s Raise Your Arches campaign turned the brand’s iconic arches into a pair of eyebrows in recognition of the universal appeal of grabbing a burger. 

FMCG ads might also include celebrity endorsements to broaden a product’s appeal, such as the Starbucks and Taylor Swift partnership.

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CPG vs FMCG: My Final Thoughts

You’ve made it to the end of my take on CPG vs FMCG! Hopefully, you now have a better understanding of what CPG and FMCG are and their similarities and differences. 

While CPG and FMCG are both non-durable products, the critical difference is that products that fall into the latter category sell faster.

What’s also clear is that the two terms are often interchangeable. However, there are a few differences, particularly in how brands market and sell such products.  

Navigating the retail industry can be challenging, so staying on top of its nuances is essential if you’re a seller who wants to penetrate a particular market. 

That’s all from me! Are you planning on selling CPG and/or FMCG? Let us know in the comments below. 

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