What is the difference between CPG and FMCG?

Matthew Cawsey | August 27, 2024 | 5 minute read

See how you can turn trusted data into a competitive advantage

Get in touch

What is the difference between CPG and FMCG?

Master Data Management Blog by Stibo Systems logo
| 5 minute read
August 27 2024
Difference between CPG and FMCG ➤
9:22

One of the most common questions that come up in conversation at conferences or in business meetings is: “What is the difference between CPG and FMCG?”

The short answer is that CPG is the acronym for consumer-packaged goods and these products encompass the most common and frequently purchased items by consumers.

FMCG is a subset of CPG that is focused on the fastest moving items, i.e., fast-moving consumer goods. Below we will further detail the key industry terms and explain the importance of data and master data management for CPG companies.

CPG vs FMCG comparison chart

 

The comparison of consumer packaged goods and fast-moving consumer goods highlights key differences in the retail industry. Generally, CPG brands (i.e., household products, personal care items, etc.) have much longer shelf lives and higher price points, so these companies tend to focus more on brand loyalty and quality.

The main differences between the two industries are that FMCG brands that manufacture and sell products like deodorant, toothpaste and toilet paper, tend to have a shorter shelf life, higher turnover rate, and comparatively lower costs. Learn more about the differences between CPG and FMCG in the chart below.

Factors CPG industry FMCG industry
Shelf life Long shelf life Short shelf life
Purchase frequency Low purchase frequency High purchase frequency
Product examples Household items, appliances, electronics Groceries, toiletries, beverages
Price point High price point Low price point
Packaging Larger packaging Smaller packaging
Distribution More extensive distribution channels Widespread and rapid distribution
Marketing focus Brand loyalty and quality Availability and convenience

While FMCG is under the umbrella of CPG, the largest differentiator lies in the consumer demand and purchase frequency.

However, both industries (particularly in North America) aim to maximize shelf space and grow market share via targeted sales goals, retail analytics and catering to overall consumer needs.

 

What is CPG?

Consumer-packaged goods are the products that are purchased frequently by most households. CPG products are bought many times in a year and need to be continuously replenished.

Commonly purchased categories include food, beverage, health products, beauty products and household cleaning goods. In contrast, durable goods (like ovens and bicycles) have lengthier usage lifespans of months or years, while CPG products typically last days or weeks.

Furthermore, CPG companies are the manufacturers that procure, develop, produce, market and supply products to retailers and through other sales channels.

Key elements of CPG products from Universal Marketing Dictionary:

  • Sold in smaller packages
  • Carry a lower unit price
  • Distributed through food and drug retailers
  • Are heavily promoted
  • Bought and consumed frequently

 

What is FMCG?

FMCG is an acronym for fast-moving consumer goods. These products are a subset of the CPG products. FMCG products sell very fast at retail and need frequent replenishment and restocking.

These products may have a lower cost than CPG products. Products in this category are either perishable, such as packaged salad, popular beer or wine, and move very quickly.

A common measure in the industry is Days of Supply, which describes the inventory units held on shelf relative to the units sold per day.

For example, certain categories, such as beer cases, or specific snack categories, such as potato chips, may have less than one day of supply, demonstrating the sales velocity and making these some of the best examples of FMCG products.

Categories that fall under FMCG definition (not exhaustive):

  • Beverages: wine, beer, water, juice, soft drinks
  • Health & beauty: dental care, hand and body lotion, vitamins and supplements
  • Snacks: salty snacks, cookies, crackers
  • Dairy: milk, eggs, cheese

 

The role of data at CPG companies has evolved

Traditionally, CPGs have a very linear approach to production, marketing, and sales in partnership with retailers to gain store distribution for the end consumer. The focus has been on launching new products, supply chain optimization, category, and consumer knowledge and, finally, catering to the needs of key retailers.

Most of the effort on data has been in understanding the consumer and the evolving market and melding that information to deliver insights to the retail partners.

For years, the CPGs’ data backroom, including master data management (MDM) and product information management (PIM), and digital asset management (images, videos, brochures) have been a lower priority.

With the consumer adoption of digital buying behavior and increase in ecommerce, marketplaces and other digital channels it has become necessary for CPGs to transform their business and develop an integrated data model on their most important business data.

Master data management can provide key strategic benefits that encompass both increased efficiency and business transformation to capture growth opportunities.

With MDM, leading CPGs can continue to deliver the market and consumer insights to retailers but also gain the capacity to be a trusted data-sharing partner to help retailers succeed across channels.

The role of data and the benefits provided by a master data management strategy transcend the difference between CPG and FMCG.

In any case, business agility is crucial to accommodate quickly shifting consumer behavior, as well as compliance demands and supply chain disruptions. The ability to adapt relies on the availability of trusted data.

While there are nuanced differences between CPG and FMCG products, the way that organizations approach them in terms of data management is the same.

Whether it is CPG or FMCG products, master data management plays a central role in acquiring ingredient and supplier information, managing and enriching data and finally provides the ability to share data internally and with retail partners.

 

Five ways that CPGs (incl. FMCG) can benefit from master data management

1. Time to market

Being first to market in CPG means that you gain digital and physical distribution, and you gain the first adoption of the product by consumers, setting you up for continued success. Master data management helps orchestrate the data to ensure that it is complete and of high quality. Using a data syndication tool ensures that product data reaches key retail partners and digital channels with rich and accurate data on time.

2. Digital transformation

With data becoming more of a driver for value and competitive advantage, most CPG companies are undergoing a digital transformation. Ensuring your business data has a solid foundation and is of high quality and trustworthy is important to encourage greater data use. With an MDM solution, companies can establish ongoing processes and data workflows to help increase data value and support digital transformation strategies.

3. D2C commerce

As more consumers have adopted digital activities as part of their purchase behavior, loyalty is more tenuous because it is easier for switching to other brands or other retailers. Many CPGs have launched a direct-to-consumer (D2C) channel to gain more insight into rapidly changing behaviors and to build stronger bonds and brand communities. This channel requires a new set of capabilities and technical knowhow. An MDM solution provides the data capabilities and agility needed to meet the demands of D2C while ensuring governance and efficient processes.

4. Supply chain optimization

CPGs and retailers have faced supply chain challenges over the past two years and are looking to build resiliency and manage data better to minimize future disruption. It is important to gain a single and complete view of suppliers for the product development team, finance, accounting, customer relationship managers and the rest of the organization. MDM can help you build a 360-degree view of suppliers, develop redundancy in key inputs and assist in establishing more complete information about suppliers to be shared with retail partners and end-consumers.

5. Sustainability

Consumers have gained a greater awareness of climate change and sustainability living and have taken a more purpose-driven approach to shopping. With this interest in sustainability is a deeper need for information on all aspects of the products that are purchased including, source of materials, recyclability of packaging, organic, fair-trade and even quantified carbon footprint. More and deeper consumer interest in product and supplier information requires better data management and agility. Multidomain master data management provides the structure to add relevant attributes by category and provide end-to-end transparency

Finding the best master data management solution for your business

No matter your business needs, the right MDM solution can provide a major impact on your organization. Learn how to choose the right MDM solution and find out how to get started today.


Topics: 
Master Data Management Blog by Stibo Systems logo

Driving growth for customers with trusted, rich, complete, curated data, Matt has over 20 years of experience in enterprise software with the world’s leading data management companies and is a qualified marketer within pragmatic product marketing. He is a highly experienced professional in customer information management, enterprise data quality, multidomain master data management and data governance & compliance.

Discover Blogs by Topic

  • MDM strategy
  • Data governance
  • Retail and distribution
  • See more
  • Customer and party data
  • Manufacturing
  • Data quality
  • Product data and PIM
  • Supplier data
  • AI and machine learning
  • CPG
  • Financial services
  • GDPR
  • Sustainability
  • Location data
  • PDX Syndication
  • Cloud

Live Shopping: How to Leverage Product Information for Maximum Impact

10/22/24

Why data accuracy matters for CPG brands

10/16/24

Why Choose a Cloud-Based Data Solution: On-Premise vs. Cloud

10/15/24

How to Use Customer Data Modeling

10/10/24

Navigating Change: Engaging Business Users in Successful Change Management

9/20/24

What is Digital Asset Management?

9/11/24

How to Improve Your Data Management

9/3/24

The Future of Master Data Management: Trends in 2023-2025

9/1/24

Digital Transformation in the CPG Industry

8/30/24

5 CPG Industry Trends and Opportunities for 2024-2025

8/29/24

What is the difference between CPG and FMCG?

8/27/24

Responsible AI relies on data governance

8/27/24

6 Features of an Effective Master Data Management Solution

8/15/24

Great Data Minds: The Unsung Heros Behind Effective Data Management

8/13/24

A Data Monetization Strategy - Get More Value from Your Master Data

8/6/24

Introducing the Master Data Management Maturity Model

8/4/24

What is Augmented Data Management? (ADM)

7/31/24

Data Migration to SAP S/4HANA ERP - The Fast and Safe Approach with MDM

7/30/24

Data Governance and Data Protection: A Match Made in Heaven?

7/17/24

The Difference Between Master Data and Metadata

5/26/24

Master Data Management Roles and Responsibilities

5/20/24

8 Best Practices for Customer Master Data Management

5/16/24

What Is Master Data Governance – And Why Do You Need It?

5/12/24

Guide: Deliver flawless rich content experiences with master data governance

4/11/24

Risks of Using LLMs in Your Business – What Does OWASP Have to Say?

4/10/24

Guide: How to comply with industry standards using master data governance

4/9/24

Digital Product Passports - A Data Management Challenge

4/8/24

Guide: Get enterprise data enrichment right with master data governance

4/2/24

Guide: Getting enterprise data modelling right with master data governance

4/2/24

Guide: Improving your data quality with master data governance

4/2/24

Data Governance Trends 2024

1/30/24

NRF 2024 Recap: In the AI era, better data can make all the difference

1/19/24

Building Supply Chain Resilience: Strategies & Examples

12/19/23

How Master Data Management Can Enhance Your ERP Solution

12/14/23

Shedding Light on Climate Accountability and Traceability in Retail

11/29/23

What is Smart Manufacturing and Why Does it Matter?

10/11/23

Future Proof Your Retail Business with Composable Commerce

10/9/23

5 Common Reasons Why Manufacturers Fail at Digital Transformation

10/5/23

How to Digitally Transform a Restaurant Chain

9/29/23

Three Benefits of Moving to Headless Commerce and the Role of a Modern PIM

9/14/23

12 Steps to a Successful Omnichannel and Unified Commerce

7/6/23

CGF Global Summit 2023: Unlock Sustainable Growth With Collaboration and Innovation

7/5/23

Navigating the Current Challenges of Supply Chain Management

6/28/23

Product Data Management during Mergers and Acquisitions

4/6/23

A Complete Master Data Management Glossary

3/14/23

4 Ways to Reduce Ecommerce Returns

3/8/23

Asset Data Governance is Central for Asset Management

3/1/23

4 Common Master Data Management Implementation Styles

2/21/23

How to Leverage Internet of Things with Master Data Management

2/14/23

Manufacturing Trends and Insights in 2023-2025

2/14/23

Sustainability in Retail Needs Governed Data

2/13/23

NRF 2023: Retail Turns to AI and Automation to Increase Efficiencies

1/20/23

5 Key Manufacturing Challenges in 2023

1/16/23

What is a Golden Customer Record in Master Data Management?

1/9/23

Innovation in Retail

1/4/23

Life Cycle Assessment Scoring for Food Products

11/21/22

Retail of the Future

11/14/22

Omnichannel Strategies for Retail

11/7/22

Hyper-Personalized Customer Experiences Need Multidomain MDM

11/5/22

What is Omnichannel Retailing and What is the Role of Data Management?

10/25/22

Most Common ISO Standards in the Manufacturing Industry

10/18/22

How to Get Started with Master Data Management: 5 Steps to Consider

10/17/22

What is Supply Chain Analytics and Why It's Important

10/12/22

What is Data Quality and Why It's Important

10/12/22

An Introductory Guide: What is Data Intelligence?

10/1/22

Revolutionizing Manufacturing: 5 Must-Have SaaS Systems for Success

9/15/22

An Introductory Guide to Supplier Compliance

9/7/22

What is Application Data Management and How Does It Differ From MDM?

8/29/22

Digital Transformation in the Manufacturing Industry

8/25/22

Master Data Management Framework: Get Set for Success

8/17/22

Discover the Value of Your Data: Master Data Management KPIs & Metrics

8/15/22

Supplier Self-Service: Everything You Need to Know

6/15/22

Omnichannel vs. Multichannel: What’s the Difference?

6/14/22

Create a Culture of Data Transparency - Begin with a Solid Foundation

6/10/22

The 5 Biggest Retail Trends for 2023-2025

5/31/22

What is a Location Intelligence?

5/31/22

Omnichannel Customer Experience: The Ultimate Guide

5/30/22

Location Analytics – All You Need to Know

5/26/22

Omnichannel Commerce: Creating a Seamless Shopping Experience

5/24/22

Top 4 Data Management Trends in the Insurance Industry

5/11/22

What is Supply Chain Visibility and Why It's Important

5/1/22

The Ultimate Guide to Data Transparency

4/21/22

How Manufacturers Can Shift to Product-as-a-Service Offerings

4/20/22

How to Check Your Enterprise Data Foundation

4/16/22

An Introductory Guide to Manufacturing Compliance

4/14/22

Multidomain MDM vs. Multiple Domain MDM

3/31/22

Making Master Data Accessible: What is Data as a Service (DaaS)?

3/29/22

How to Build a Successful Data Governance Strategy

3/23/22

What is Unified Commerce? Key Advantages & Best Practices

3/22/22

How to Choose the Right Data Quality Tool?

3/22/22

What is a data domain? Meaning & examples

3/21/22

6 Best Practices for Data Governance

3/17/22

5 Advantages of a Master Data Management System

3/16/22

A Unified Customer View: What Is It and Why You Need It

3/9/22

Supply Chain Challenges in the CPG Industry

2/24/22

The Best Data Governance Tools You Need to Know About

2/17/22

Top 5 Most Common Data Quality Issues

2/14/22

What Is Synthetic Data and Why It Needs Master Data Management

2/10/22

What is Cloud Master Data Management?

2/8/22

How to Implement Data Governance

2/7/22

Build vs. Buy Master Data Management Software

1/28/22

Why is Data Governance Important?

1/27/22

Five Reasons Your Data Governance Initiative Could Fail

1/24/22

How to Turn Your Data Silos Into Zones of Insight

1/21/22

How to Improve Supplier Experience Management

1/16/22

​​How to Improve Supplier Onboarding

1/16/22

How to Enable a Single Source of Truth with Master Data Management

1/13/22

What is a Data Quality Framework?

1/11/22

How to Measure the ROI of Master Data Management

1/11/22

What is Manufacturing-as-a-Service (MaaS)?

1/7/22

The Ultimate Guide to Building a Data Governance Framework

1/4/22

Master Data Management Tools - and Why You Need Them

12/20/21

The Dynamic Duo of Data Security and Data Governance

12/20/21

How to Choose the Right Supplier Management Solution

12/20/21

How Data Transparency Enables Sustainable Retailing

12/6/21

What is Supplier Performance Management?

12/1/21

What is Party Data? All You Need to Know About Party Data Management

11/28/21

What is Data Compliance? An Introductory Guide

11/18/21

How to Create a Marketing Center of Excellence

11/14/21

The Complete Guide: How to Get a 360° Customer View

11/7/21

How Location Data Adds Value to Master Data Projects

10/29/21

How Marketers Should Prepare for the 2023 Holiday Shopping Season

10/26/21

What is Supplier Lifecycle Management?

10/19/21

What is a Data Mesh? A Simple Introduction

10/15/21

How to Build a Master Data Management Strategy

9/26/21

10 Signs You Need a Master Data Management Platform

9/2/21

What Vendor Data Is and Why It Matters to Manufacturers

8/31/21

3 Reasons High-Quality Supplier Data Can Benefit Any Organization

8/25/21

4 Trends in the Automotive Industry

8/11/21

What is Reference Data and Reference Data Management?

8/9/21

What Obstacles Are Impacting the Global Retail Recovery?

8/2/21

GDPR as a Catalyst for Effective Data Governance

7/25/21

All You Need to Know About Supplier Information Management

7/21/21

5 Tips for Driving a Centralized Data Management Strategy

7/3/21

Welcome to the Decade of Transparency

5/26/21

How to Become a Customer-Obsessed Brand

5/12/21

How to Create a Master Data Management Roadmap in Five Steps

4/27/21

What is a Data Catalog? Definition and Benefits

4/13/21

How to Improve the Retail Customer Experience with Data Management

4/8/21

How to Choose the Right Master Data Management Solution

3/29/21

Business Intelligence and Analytics: What's the Difference?

3/25/21

Spending too much on Big Data? Try Small Data and MDM

3/24/21

What is a Data Lake? Everything You Need to Know

3/21/21

How to Extract More Value from Your Data

3/17/21

Are you making decisions based on bad HCO/HCP information?

2/24/21

Why Master Data Cleansing is Important to CPG Brands

1/20/21

CRM 2.0 – It All Starts With Master Data Management

12/19/20

5 Trends in Telecom that Rely on Transparency of Master Data

12/15/20

10 Data Management Trends in Financial Services

11/19/20

Seasonal Marketing Campaigns: What Is It and Why Is It Important?

11/8/20

What Is a Data Fabric and Why Do You Need It?

10/29/20

Transparent Product Information in Pharmaceutical Manufacturing

10/14/20

How to Improve Back-End Systems Using Master Data Management

9/19/20

8 Benefits of Transparent Product Information for Medical Devices

9/1/20

How Retailers Can Increase Online Sales in 2023

8/23/20

Master Data Management (MDM) & Big Data

8/14/20

Key Benefits of Knowing Your Customers

8/9/20

Women in Master Data: Kelly Amavisca, Ferguson

8/5/20

Customer Data in Corporate Banking Reveal New Opportunities

7/21/20

How to Analyze Customer Data With Customer Master Data Management

7/21/20

How to Improve Your 2023 Black Friday Sales in 5 Steps

7/18/20

4 Ways Product Information Management (PIM) Improves the Customer Experience

7/18/20

How to Estimate the ROI of Your Customer Data

7/1/20

Women in Master Data: Rebecca Chamberlain, M&S

6/24/20

How to Personalise Insurance Solutions with MDM

6/17/20

How to Democratize Your Data

6/3/20

How to Get Buy-In for a Master Data Management Solution

5/25/20

How CPG Brands Manage the Impact of Covid-19 in a Post-Pandemic World

5/18/20

5 Steps to Improve Your Data Syndication

5/7/20

Marketing Data Quality: Why Is It Important and How to Get Started

3/26/20

Panic Buying: Navigating Long-term Implications and Uncertainty

3/24/20

Women in Master Data: Ditte Brix, IMPACT

2/20/20

Get More Value From Your CRM With Customer Master Data Management

2/17/20

Women in Master Data: Nagashree Devadas, Stibo Systems

2/4/20

How to Create Direct-to-Consumer (D2C) Success for CPG Brands

1/3/20

Women in Master Data: Anna Schéle, Ahlsell

10/25/19

Women in Master Data: Morgan Lawrence, Infoverity

9/26/19

Women in Master Data: Sara Friberg, Acando (Part of CGI)

9/13/19

Improving Product Setup Processes Enhances Superior Experiences

8/21/19

How to Improve Your Product's Time to Market With PDX Syndication

7/18/19

8 Tips For Pricing Automation In The Aftermarket

6/1/19

How to Drive Innovation With Master Data Management

3/15/19

Discover PDX Syndication to Launch New Products with Speed

2/27/19

How to Benefit from Product Data Management

2/20/19

What is a Product Backlog and How to Avoid It

2/13/19

How to Get Rid of Customer Duplicates

2/7/19

4 Types of IT Systems That Should Be Sunsetted

1/3/19

How to Reduce Time-to-Market with Master Data Management

10/28/18

How to Start Taking Advantage of Your Data

9/12/18

6 Signs You Have a Potential GDPR Problem

8/16/18

GDPR: The DOs and DON’Ts of Personal Data

6/13/18

How Master Data Management Supports Data Security

6/7/18

Frequently Asked Questions (FAQ) About the GDPR

5/30/18

Understanding the Role of a Chief Data Officer

4/26/18

3 Steps: How to Plan, Execute and Evaluate Any IoT Initiative

2/20/18

How to Benefit From Customer-Centric Data Management

9/7/17

3 Ways to Faster Innovation with Multidomain Master Data Management

6/7/17

Product Information Management Trends to Consider

5/25/17

4 Major GDPR Challenges and How to Solve Them

5/12/17

How to Prepare for GDPR in Five Steps

2/21/17