What are the essential qualities of FMCG products?

Published on Jul 09 2020

In our daily life, we make proper use of a lot of things our life is incomplete without them. But sometimes we do not know where these things even come from or what are they called. From using toilet papers in the morning to maintaining skincare regime before going to sleep- everything is impossible without these products. Yes, I am talking about FMCG Products. FMCG means Fast Moving Consumer Goods which is also referred to as Consumer Packed Goods (CPG) and are non-durable goods that are sold within a quite short time. Some of the daily used FMCG products examples are cleaning products, skincare products, prepared foods, dry goods, beverages, cosmetics, personal care products, candies, over-the-counter medications etc. these products have a great impact in our life. So, from marketers to common man every person can relate to the qualities these products provide.  

So, what exactly is Fast-Moving Consumer Goods (FMCG)?

Well, the word ‘Fast-moving’ explains the nature of the goods already that it sells quickly and it is used also rapidly. The usage of these products happens usually on day today. Fast-Moving Consumer Goods are those products that are sold quickly at comparatively low cost because of its importance in every person’s life from poor to rich (as I mentioned, “incomplete”). These goods are also called ‘consumer packaged goods’.

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Since these goods are used daily, FMCGs have a short shelf life. They are always on high consumer demand (e.g., confectionery food items, soft drinks etc.) or because they are perishable (e.g., dairy products, and meats those are not to be preserved for long). These goods are purchased frequently, are consumed rapidly, are priced low, and are sold in huge quantities. They also have a high turnover when they’re on the shelf at the store.

Source: https://www.investopedia.com/terms/f/fastmoving-consumer-goods-fmcg.asp

Analysing Fast-Moving Consumer Goods (FMCG) and its essential qualities-

It is not very difficult to understand what is fast-moving consumer goods as almost everyone in the world uses FMCG products nearly every day. Those are the limited consumer purchases we make at the grocery stores, supermarkets etc.

FMCG examples include milk, toilet paper, candy, fruit and vegetables, beer, soda and some over-the-counter medicines etc.

Definition of FMCG

Although there is no proper definition given in any marketing textbook or anywhere for FMCG products, it is to be analysed that the major quality of any FMCG product is to be fast-moving goods. To be precise, whenever these products are manufactured and comes available in the real market for sale, it moves relatively quickly from shops to consumers’ homes and from their shelf as well. As mentioned before, it has a very short period of time. These products are quickly sold.

Difference between Fast-moving consumer goods and Slow-moving consumer goods is that slow-moving products have a longer shelf life and are purchased over time, those products include items like furniture and appliances.

Types of Fast Moving Consumer Goods

To know, what are Fast Moving Consumer Goods it is important to categorise the FMCG products according to the types for better understanding. Here is a complete list of the major FMCG categories for acquiring a general idea of what the category comprises and the examples of FMCG goods that may be found within that particular category. However, to understand the qualities that these products contain, it is essential to know what comes under the FMCG products and the list below will help exactly in that regard.

Types of FMCG products-

  • Prepared meals: Ready-to-eat meals
  • Baked foods and essentials: Cookies, croissants, and bagels, Baking soda,
  • Processed foods: Cheese products, cereals, and boxed pasta
  • Beverages: Bottled water, energy drinks, and juices
  • Fresh foods: Fruits, vegetables
  • frozen foods: Frozen peas and carrots,
  • Dry goods: Raisins and nuts
  • Toiletries: Toothpaste, and soap
  • Cosmetics: Haircare products, concealers etc.
  • Medicines: Aspirin, pain relievers, and other medication that can be purchased without a prescription
  • Cleaning products: Cleaning liquid, oven cleaner, and window and glass cleaner
  • Office supplies: Pens, pencils, and markers

Generally, consumer goods are divided into three different categories:

  • Durable,
  • Nondurable goods, and
  • Services.

Durable products have a shelf life of three years or more while the nondurable ones have a shelf life of less than one year. Fast-moving consumer goods are the largest sector of consumer goods. They fall into the category of non-durable, as they are consumed immediately and have a short shelf life.

FMCG Companies

The Fast Moving Customer Goods play an essential role in the economy of every country. One of the basic characteristics of any company operating in the FMCG domain is a significant goods turnover, a large number of selections and a low to the medium cost of goods sold percentage. There is some serious effort required for a market share among the FMCG manufacturers. Hence the innovation rate is growing, but at the same time, the life-span of the products becomes shorter. To understand the course of FMCG implementation it is important to study the leading FMCG giants.

With continuous growth and improvement in the standards of living, the role of the FMCGs is of crucial importance. The list of the companies below contains the leading FMCGs in the business in respect to the product quality and packaging. These companies are constantly striving to make it easy for the millions of customers to reach out for groceries, quick meals and other FMCG products as many times as needed in a day!

Fast Moving Consumer Goods FMCG Companies-

  • Emami
  • Hindustan Unilever
  • Amul
  • Patanjali
  • Colgate Palmolive India Ltd.
  • Dabur India Ltd.
  • P&G
  • Himalaya Healthcare Ltd.
  • Britannia
  • Parle Agro
  • ITC
  • Marico

Image courtesy- https://www.pinterest.com/pin/679410293755595937/

Seeing into the FMCG stocks while taking a note on FMCG business, if one thinks of FMCG companies as investments, it is very clear as of now that FMCG stocks generally do not promise a very high level of growth but are safe bets with anticipated margins, stable returns, and regular dividends.

Fast-Moving Consumer Goods and E-Commerce

There are certain differences between FMCG products selling in the brick and mortar stores and through e-commerce stores. During the reign of e-commerce in the marketing world of consumer goods, the FMCG e-commerce stores like Grofers, Big Basket etc. have made a great impact on shoppers across the globe. The purchasing activity has increased online. The products being sold online have benefit regarding certain conveniences. They provide unmatched services from delivering orders right at the door to a large selection of products and low prices- that those physically present shops can’t.

Although the most popular categories of goods in e-commerce happen to be the non-consumable ones—durables and entertainment-related products, the online market for buying groceries and other consumable products is growing. Companies are constantly trying to redefine the efficiency of delivery logistics which shorten delivery times. In the list of e-commerce goods, the non-consumable categories may lead than the consumable products in the online market. However, the gains in logistics efficiency have increased and certainly improved the use of e-commerce networks for acquiring FMCGs.

How Fast-Moving Consumer Goods Industry functions?

Because fast-moving consumer goods have such a high turnover rate, the market is not only very large, it is also very competitive. Some of the world’s largest companies compete for market share in this industry including Unilever, Procter & Gamble, Nestlé, Kellogg’s, and Colgate Palmolive. Companies with a strong distribution network tend to dominate these industries. Earlier a newcomer had difficulty to compete with an incumbent because of their already established distribution network. But now due to e-commerce, things have started to change. Now any company can virtually deliver anywhere in India with the help of e-commerce companies like Amazon and Flipkart.

The packaging is a very important factor in the production process. The logistics and distribution systems often require secondary and tertiary packaging to maximize efficiency. The unit pack or primary package is critical for product protection and shelf life, and also provides information and sales incentives to consumers.

FMCG goods account for more than half of all consumer spending, but they tend to be low-involvement purchases. FMCG products are generally not very thoughtful purchases. They are more essential purchases or indulgence purchases. FMCG products like chocolates, chewing gums etc. are placed near counters to get consumers to do some impulsive purchase.

Different FMCG qualities from Consumer and Marketer’s views:

From the customer’s perspective-

  • Its low cost helps the consumer to purchase it as many times as they need
  • frequent purchase is one of the major elements in the FMCG goods due to its usage,
  • the growing awareness amongst the customers and users,
  • easy availability for large quantity manufacturing,
  • Due to the packaging and quality materials containing in the goods, it makes a shift of choice and change preferences of companies among the consumers.

From the marketers’ perspective –

  • Low margin,
  • high distribution network plays a crucial part in making it easily available across the world
  • From changing lifestyles with newly updated products, and everyday delivery service

These were above some of the factors for the growth of this sector.

As mentioned above, in one sentence, the fast-moving consumer goods are those non-durable goods that have a short lifespan and are consumed or used at a rapid or fast pace. After all the analysis and understanding of the Fast-Moving Consumer Goods, it can be better to say that they can be alternately called the Household Goods. Typically the household is incomplete and our daily life is incomplete without these goods from consumable goods to the everyday necessary products everything is covered under the FMCG. Till the world is there, the demand for FMCG products will never end. FMCG is a broad market with never-ending consumer demands. So, it can be said that there are only three essential qualities- for its daily usage the low-cost sale, it covers all the household needs and it makes life easy and healthy.

If you are interested in reading more FMCG related content, please check out our resource centre.  

Category:
Article English
Author Info:
Gourab Mukherjee

A writer by passion, a consultant by profession. Loves to write about the latest technology, FMCG, and Sales techniques. In his free time, loves to read books and desires to travel the world

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