What are FMCGs?

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Fast-moving consumer goods are all types of goods designed to attract consumers and promote rapid volume of sales while also providing those goods to consumers at very affordable prices. Goods of this type are often non-durable, meaning they wear out quickly and require frequent replenishment by making further purchases. Due to the nature of this type of consumer packaged goods, sales volume is typically very high and consistent throughout the year.

One of the most common examples of this type of good is fresh and processed food sold in grocery stores and supermarkets. Items such as fresh produce are not durable, meaning fruits and vegetables must be eaten within a limited time after purchase or they spoil. Once foods are consumed, they cannot be renewed, prompting consumers to purchase more units of those same items. The same general concept applies to canned and frozen foods that are eventually used and need to be replaced on an ongoing basis.

With most consumer goods moving fast, the products are not only high-volume products, they are also priced at what is considered reasonable by most consumers. In some cases, the manufacturer of the manufactured goods does not generate a large profit for each unit sold, but realizes a sizable return when a good appeals to a wide range of consumers and is sold in large volumes on a regular basis. Manufacturers offer bulk purchase prices to supermarkets and other outlets, who buy in bulk, then set unit prices to make even a small amount of profit on each unit sold. The end result is that both the manufacturer and the retailer generate profits by selling high volumes of goods, provided quality and attractiveness are present, and the retail price paid by consumers is considered fair enough to keep consumers interested.

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