What is CPG and how can it benefit your business?

Consumer packaged goods (CPG) businesses create and sell products through various channels. They include supermarkets, drugstores, and convenience stores. These businesses also operate pharmacies and veterinary clinics. In most cases, CPG businesses are associated with food retailing and distribution. Redefining the term ‘consumer goods’ has helped streamline the business activities of companies operating within this sector. The word ‘consumer’ is used more often in these days to describe a person who purchases goods for personal use rather than that of a person who is not a member of the general public but is instead an individual targeted by a particular marketing message. While it might seem like a simple change, redefining the term has brought many benefits to both the business community as well as the consumers they serve!

What is CPG?

CPG products are generally sold through physical retail channels, but they may also be sold online or through other digital channels. The products sold by CPG businesses are usually food items, beverages, household-care products, personal-care products, and tobacco products. CPG products are diverse in terms of markets they serve, product types they offer, and channels they are sold through. These factors are responsible for CPG businesses having relatively complex product portfolios. Consequently, their business models are also complex because they tend to offer a range of products at different price points and in different formats. CPG businesses also run different types of distribution channels. Some of them include supermarkets, drugstores, convenience stores, department stores, gas stations, and airports. Others include specialty grocery stores and mail-order retailers. For more information on what a cpg is, see https://authena.io/what-are-consumer-packaged-goods-cpg/.

Benefits of redefining CPG

– Increased competition – When the definition of consumer goods was changed, it opened up the market for many other businesses to enter into the market with different products. This has resulted in increased competition for all the businesses operating within the CPG sector, which has led to lower prices for the consumer and increased demand for their products.

– Increased consumer choice – Consumers now have many more products to choose from. This has resulted in increased consumer choice, which is good for the consumer in terms of finding the product that best suits his/her needs, but also for the businesses, as it increases the competition and drives prices down.

– Increased consumer trust – As people now have more options to choose from, they are likely to trust the brands and products they do buy more. This increases the potential for these products to generate more sales and build a loyal customer base.

– Improved return rates – When people have the opportunity to try out new products, they are more likely to return the ones they do not like. This improves the return rates for the businesses and allows them to expand their product portfolios.