By Retail Brew Staff
less than 3 min read
Definition:
Consumer packaged goods (CPG) are the things you run to the store to pick up—or toss in your shopping cart when you’re out buying what you really came for. They’re everyday products like snacks, drinks, personal care items, cleaning supplies, and more that come in boxes, bottles, wrappers and tubes. Unlike durable goods—such as furniture and appliances, which last longer and therefore tend to be purchased less often—CPG products need to be replenished regularly and are used on a daily (or near-daily) basis. Designed to be readily available and relatively affordable and typically sold in mass retailers, grocery stores, and increasingly online, the highly competitive CPG sector is all about volume and slim margins and worth around $2.5 trillion in the US alone.
Origins of CPG
The roots of the CPG industry predate plant-based milk hitting shelves by many decades. Industrial Revolution advances in manufacturing and transportation made producing goods at scale possible, while the prosperity of the post-World War II years brought suburban expansion, supermarkets, soap operas (and advertising), Tang, Tide, and TV dinners. The boom led to consolidation in the 1980s and 1990s as big players gobbled up smaller ones in an effort to be more efficient and compete for shelf space, and by the 2010s, digitally native brands fueled the direct-to-consumer boom. Today, the industry is a mashup of legacy giants attempting to modernize their game with the help of AI and innovative packaging and upstarts going viral on TikTok.
CPG in context
In 2024, price hikes were the order of the day at major CPGs, which caused sales volumes to drop. Heading into 2025, which Deloitte said “could be a pivotal year,” execs predicted pricing strategies might have to change. In fact, more than half of respondents to a Deloitte survey of 250 CPG executives said they couldn’t rely on price increases for revenue growth this year.
