Consumer packaged goods (CPG)

Consumer packaged goods (CPG) are products that consumers use daily and restock frequently, such as food, beverages, toiletries, over-the-counter drugs, and cleaning products. Sometimes referred to as fast-moving consumer goods (FMCG), CPG products often sell quickly from shelves either due to being perishable (i.e. food products) or in high demand (i.e. toilet paper/paper goods). CPG products differ from commercial goods, which are products that are not seen as necessities, such as toys, entertainment systems and video games.

The CPG sector has been described as highly competitive, as CPG manufacturers are vying for limited shelf space in stores. Additionally, CPGs typically have low consumer engagement, meaning consumers do not spend a lot of time choosing a CPG product, and brand loyalties can change on a whim. CPG are typically manufactured on a massive scale at a low cost and are sold very cheaply, deriving most of their profit from quantity of product sold.

In the United States, the CPG industry accounts for 10% of the country's gross domestic product (GDP), bringing in around $2 trillion annually.

Like with many other industries, the onset of the COVID-19 pandemic has affected the CPG industry significantly. Many CPG companies have ramped up online sales of their goods, whether through retailer partnerships or by creating direct to consumer (DTC) websites. Many experts assert that this could be the new normal for CPG consumption; according to a mid-2021 report from McKinsey & Company, online sales remain at 35% above pre-pandemic levels. Online sales tend to produce thinner margins for CPGs, due to higher shipping and advertising costs within the e-commerce sector.

Issues of sustainability, with an emphasis on operational efficiency and packaging, have also proven to be a challenge for the CPG industry. In recent years, consumer demand for CPG companies to rely less on plastic in favor of more eco-friendly packaging materials has forced some companies to rethink their operations. These calls have also been echoed in the government sector, with legislation being passed to require CPG companies to look for plastic alternatives. One such legislation is from the US state of California, which signed the U.S.'s strictest recycling labeling and marketing bill into law in October 2021.