Fast-moving consumer goods (FMCG) are non-durable consumer goods that sell like hotcakes as they usually come with a low price and high usability. Their examples include toothpaste, ready-to-make food, soap, cookies, notebook, and chocolate. These products are usually stacked up on the shelves of the supermarkets like Walmart. Less durability, high demand, and low price are some FMCG traits that enable them to be sold off quickly.
How does FMCG Work?
The FMCG sector’s popularity is far-reaching. The fast-moving consumer goods industry provides affordable solutions to everyday problems, from packaged daily necessities that can be easily grabbed from a store to ready-to-make food. For example, hostel students prefer packaged food like instant noodles as it does not require elaborate cooking. In addition, packaged food helps individuals who live alone and cannot arrange home-cooked meals. Likewise, the industry has been helping consumers by providing medicines, masks, cosmetics, personal care, and hygiene products.
In 2017, the value of the Global FMCG market size was $10,020.0 billion, with its 2025 growth projections being $ 15,361.8 billion. Asia is one of the largest markets for these products. Many studies have found that FMCG brands have used innovation, localization, value-oriented products, better customer targeting, and product diversification.
For example, this Mckinsey study explains how Wrigley chewing gum quickly became a fast-growing product in China, acquiring over $2 billion using products designed especially for Chinese consumers. It further describes how FMCG giant Nestle reduced prices by 30% in its ready-to-drink coffee segment in China to provide more value-oriented products.
A strong distribution channel plays a crucial role in the FMCG industry as it ensures that the products are delivered to the stores on time. However, an expensive supply chain will also add to the cost. As such, global brands try to find ways to source resources locally. For example, Nestle offered discounted coffee in China by saving on the cost of using a local supply base in Yunnan. Consequently, its sourcing became 99 % Chinese.
Moreover, the distribution model is divided into two parts, one part is direct, and another part is indirect. In the natural state, the transaction occurs between the manufacturers and clients without the interference of the third party. In the indirect state, the manufacturers sell the product through a distribution channel to their clients.
Many channels were disrupted, leading to losses in the aftermath of the pandemic. At the same time, the companies had to buckle up to meet the increased demands of consumer goods due to panic buying. Another challenge for the FMCG industry has been the changing consumer preference toward healthier alternatives. Moreover, the e-commerce boom has forced companies to offer online products. Also, more and more consumers are turning price-sensitive. All these challenges have hurdled the growth of the sector.
List of Fast-Moving Consumer Goods (FMCG)
Fast-moving consumer goods are bought on a need basis and sold frequently. Therefore, the classification of the FMCG industry is done primarily by product type. Some of the classes are listed below.
#1 – Processed Foods
They come in a package. Some serve as a cooking ingredient; some are ready-to-eat food, while some have nutritional value. For example, tinned vegetables, cereals, flavoured yoghurt, cheese, tofu, canned beans, etc. Almost all kinds of food are processed. Some of them contain artificial flavours and preservatives to increase their shelf life.
Almost all kinds of food undergo some form of processing. For example, even a can of fresh tomatoes undergoes cleaning, dicing, and packaging. Also, sometimes vitamins are added to dairy products to boost their nutritional levels.
#2 – Beverages
This category includes fruit juice, drinking water, cold drink, shake, and soft drink. For example, you grab a can of packaged orange juice on your way to work.
#3 – Dry Foods
Examples of dry foods are sugar, powdered milk, tea, rice, flour, etc. Had they not been available as packaged food, people would have had to head to a factory or a farmer’s cottage to purchase a bag of rice.
#4 – Fresh Foods
Fruits and vegetables are examples of fresh foods, but they are perishable by nature, making them less durable.
#5 – Bakes Foods
Different types of cookies, biscuits, packaged cakes, doughnuts, muffins, etc., come under this category. The fast-moving consumer goods companies keep developing innovative varieties of baked goods to entice customers. However, the products also come with a shelf life; if they are not consumed by then, they become unfit for consumption.
#6 – Cosmetics and Toiletries
This category includes skin moisturizers, facial makeup, hair colours, beautifying products, deodorants, etc. Examples of toiletries include soap, toothpaste, razors, shaving creams, etc.
#7 – Ready-to-Eat
They are ready-to-eat food and need to be consumed immediately. Examples include snacks, noodles, soups, etc.
#8 – Frozen Foods
Ice creams, sausages, etc., belong to this category.
#9 – Consumer Electronics
Electronic equipment is typically used in everyday life. Examples of this category include memory cards, headphones, laptops, etc.
#10 – Health and Hygiene Products
This includes medicines, surgical masks, hospital gowns, tampons, etc.
#11 – Office Supplies and Stationery
They are the items that are regularly used for performing office work. The list includes a stapler, eraser, marker, highlighter, fountain, pen, sticky notes, folder, etc.
Examples of Fast-Moving Consumer Goods (FMCG) Companies
#1 – Procter and Gamble (P&G)
In 1837, William Procter and James Gamble founded the company in Cincinnati, Ohio. It is one of the giant multinational consumer goods companies. They sell different beauty, personal care, health products, etc. P&G’s market cap is $326.64 billion. The brand is present in approximately 180 countries and territories.
#2 – Nestle SA
The Swiss company was founded in 1866 in Switzerland. It has a presence in almost 190 countries. It has a market cap of over $304.1 billion. Nestle boasts different product lines such as beverages, coffee, cereals, snacks, baby food, dairy, chocolates, pet food, food service, etc. Fast-moving consumer goods saw significant profit during the frenzy food stocking phase of the Covid-19 lockdown, with Nestle outperforming many competitors.
#3 – PepsiCo
The famous company was founded in 1965 in the United States and had a presence in many countries. The wide range of foods and beverages is appreciated by many. The market cap of the brand is $199.18 billion. Post-pandemic, the company also saw massive profit with the increased buying of packaged foods.