FMCG Full Form

Sudeshna chakrabartiUpdated On: September 12, 2023 10:23 am IST

FMCG full form is Fast-moving Consumer Goods, which are the products that sell quickly at relatively low cost. The goods and commodities are also known as consumer packaged goods.

FMCGs tend to have a short shelf life because of high consumer demand (e.g., soft drinks and confections) or because they are perishable in nature (e.g., meat, dairy products, and baked goods). Fast-moving Consumer Goods are purchased frequently,  consumed rapidly, are priced low, and are sold in large quantities to the customers. 

Moreover, they also have a high turnover when they're not on the shelf at the store for sale. FMCGs are benefitting the Indian Economy to a larger extent with generating a considerable amount of revenues. The Government of India is taking various means to boost the FMCG sector through various policies, programmes and initiatives.

 

What is the Full Form of FMCG? 

The full form of FMCG is Fast-Moving Consumer Goods. These are the goods used by consumers in their daily lives like food items, dairy items, toilet paper, cold-drink, etc. 

Fast-moving Consumer Goods- Highlights

  • Fast-moving consumer goods are nondurable products that sell quickly at relatively low cost compared to various other goods.
  • FMCGs have relatively low profit margins and high sales volume.
  • Examples of FMCGs are the daily-use products and edible food items such as milk, gum, fruit and vegetables, toilet paper, soda, beer, and over-the-counter drugs like aspirin or paracetamol.

What is Fast-Moving Consumer Goods (FMCG Full Form)?

Consumer goods are products purchased for the sake of consumption by the average consumer. The consumer goods are divided into three different categories: durable goods, nondurable goods, and services. Durable goods retain a shelf life of three years or more while nondurable goods retain a shelf life of less than one year. Fast-moving consumer goods are the largest segment of the consumer goods industry.

They fall into the category of nondurable goods, as they are consumed immediately and have a shorter shelf life. The market in Fast-Moving Consumer Goods is highly competitive in nature because of high-turnover rate of the FMCG products. The products are sold at a faster rate and at relatively low prices with high usability.

Mostly, everyone in the world uses or consumes the FMCG products, the full form of which is fast-moving consumer goods (FMCG) almost every day. FMCG Goods are the small-scale consumer purchases we find at the different store, grocery store, supermarket and warehouse outlet.FMCGs account for more than half of all consumer spending together, but they tend to be low-involvement purchases and daily consumption items. Consumers are more likely to show off durable and high price goods such as a new car or beautifully designed smartphone than a new energy drink they picked up for $2.50 at the convenience store. These can be the goods of snob appeal.

The Nature of Fast-moving Consumer Goods Industry

Because fast-moving consumer goods have such a high turnover rate, the market is not only explicit, it is also very competitive in nature. Some of the world's largest companies compete among themselves for market share in this industry such as Coca-Cola, Unilever, Nestlé, PepsiCo, Procter & Gamble,  Tyson Foods, and Danone. Companies need to focus their efforts on marketing the fast-moving consumer goods to entice and attract consumers to buy their products to grow their profits.

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

Characteristics of FMCG 

FMCG products form a larger part of our daily lives which creates a high demand in the market. As these products have a shorter shelf life they are quickly replaced by consumers. To gain a deeper understanding of this category of products, let’s discover some of its characteristics.

  • Regular purchase: One of the primary characteristics of FMCG products is that they are bought by consumers on a regular basis as the item forms a part of basic necessities. For eg groceries or toiletries are FMCGs that are purchased often by people.
  • Perishability: These necessary items are known for their perishable nature. Some of the products like bakery items, fruits, vegetables, dairy items, etc. have a short shelf life. Consumer demand for these items is relatively high and requires a continuous supply to ensure availability.
  • High turnover at low-profit margin: Compared to other industries, Fast Moving Consumer Goods generates low profit. However, its constant demand and supply help the industry to earn higher rates of revenue and compensate for low profit margins.

FMCG Industry for Investment

As FMCGs, full form of which is Fast-Moving Consumer, are sold in large quantities, they are considered a reliable source of revenue generating goods. As an option of investments, FMCG stocks generally promise low growth but are safe bets with predictable margins, stable returns, and regular dividends in the share market.

What are the Types of Fast-Moving Consumer Goods?

Fast-moving consumer goods are nondurable goods or goods that have a short lifespan, and are consumed at a fast pace as an edible option. FMCGs can be divided into several different categories such as:

  • Processed food: Products made from cheese, cereals and boxed pasta
  • Prepared meals: Ready-to-consume meals
  • Beverages: Bottled water, energy drinks and packaged juices
  • Baked goods: Cookies, croissants, bakery products
  • Medicines: Aspirin, pain relievers and other medication that can be purchased over-the-counter
  • Cleaning products: Baking soda, window and glass cleaner
  • Cosmetics and toiletries: Hair care products, concealers, toothpaste, tissues and soap
  • Office supplies: Pens, pencils, markers and other stationery

How Fast-Moving Consumer Goods are Affecting Ecommerce?

Consumers across the globe widely purchase online goods because it offers certain conveniences—from delivering orders right to the doorstep to the availability of a wide range of selection and low prices, offers that manual shops cannot.According to a 2018 report by Nielsen, the most popular goods for online purchase are related to travel, entertainment, or durable goods such as fashion and electronics commodities. 

However, the scope of online markets for groceries and other consumable products is rising, as companies redefine the efficiency of delivery logistics and reduce their delivery times. Ecommerce channels are being made use of for gaining efficiency in logistics.

What are Consumer Packaged Goods?

Consumer packaged goods are similar to fast-moving consumer goods. They are commodities with high turnover rates, low prices or short shelf lives. Fast-moving consumer goods (FMCG full form) are demarcated by low profit margins and large sales quantities. Products that fall within this group include soft drinks, toilet paper, dairy products or medicines.

Top FMCG Companies

Some of the world’s largest FMCG companies are Nestlé, Procter & Gamble, and Coca-Cola. Swiss-based Nestlé, for instance, operates over 2,000 brands that cover a wide range from vitamins to frozen foods. Significantly, within the fast-moving consumer goods industry, the competition for market share is stiff. Therefore, companies focus more on packaging not only to attract customers but also to preserve the shelf life and integrity of the product for a longer duration of time.

What are the Challenges Faced by FMCG?

As per a report, the FMCG industry succeeded in achieving 56.8 billion by December 2022 which is a great feat. Well, as you already know the significance of these products therefore the industry has to face some emerging challenges which have been discussed below:

Insufficient Storage Space

This forms part of warehouse challenges as with the growing demand for these items, it often becomes difficult to find sufficient space to store them. It has been found that a lack of proper warehouse specs results in disorganised stock, overcrowding, and similar issues.

Not Complying with Quality Standards

As FMCGs are highly perishable it is crucial to keep these items in a controlled environment so that it does not harm consumer’s health. Another emerging challenge faced by the industry is limited concern in managing the safety standards by mentioning the expiry dates of products.

Sustainability issues

FMCG products have a huge supply that often leads to an increase in the incidence of dumping of wastes in nearby water bodies thereby polluting the environment. The product manufacturing plants emit harmful smoke causing risk to the lives of people and animals.

Different Job Profiles at FMCG Companies?

FMCG products are used by most people on an everyday basis. The work environment of an FMCG company is very friendly which promotes the sharing of creative ideas among the employees. With the huge range of varied products being offered to consumers on a regular basis, the industry needs to keep up with the demand and supply balance and continually come up with new product ideas to maintain a prominent marketplace.

With core areas such as sales, marketing, information services, finance, research and development, and human resources, the industry offers a wide variety of career opportunities and a source of employment generation. Here are some of the roles and positions at FMCG companies, full form of which is Fast-Moving Consumer Goods:

1. Procurement Analyst

The procurement analyst’s role involves the analysis and interpretation of technical data to better understand the expenses incurred by the different aspects of the business in the company.

2. Sales Manager Role

Sales play a significant role in the growth of the FMCG industry. A sales manager is essential in growing the business by attracting new customers and maintaining relations with the existing ones.

3. Stock Control Manager

The stock manager role entails the proper distribution of stocks and monitoring stock levels to meet business targets in the stipulated time.

World’s Largest FMCG Companies

The Fast-Moving Consumer Goods (FMCG full form) industry consists of some of the most well-known brands worldwide, which the reason it is often a great career opportunity to work in FMCG. Here are some of the world’s largest FMCG companies as per e-commerce databases:

  1. Nestlé – $91.1 billion in terms of revenue
  2. Procter & Gamble – $64.5 billion
  3. PepsiCo – $63.5 billion
  4. Unilever – $60.5 billion
  5. AB InBev – $56.4 billion
  6. JBS – $49.6 billion
  7. Tyson Foods – $38.2 billion
  8. Coca-Cola – $35.4 billion
  9.  L’Oréal – $29.3 billion
  10. Philip Morris – $28.7 billion3

FAQs

What is the full form of FMCG?

FMCG full form is the Fast-Moving Consumer Goods. 

 

What are FMCG product examples?

The examples of FMCG products are the daily used products such as milk, fruits and vegetables or the OTC (Over-the-counter) medicines such as aspirin, paracetamol etc.

 

What is the position of the FMCG industry in India?

The FMCG sector is one of the largest sectors in the Indian economy. The revenues of the FMCG sector reached to $52.75 bn in Financial Year 2018, according to the FMCG industry overview. Over the past 2 decades, the FMCG industry has undergone a remarkable transformation in the Indian Economy and is estimated to be the fourth largest sector in India at present. The new FMCG sectors include more health conscious customers and which has led to an emergence of new FMCG sectors such as air and water purifiers or organic food staples.

 

What is the position of the Indian FMCG Sector in 2022?

The fast-moving consumer goods (FMCG) industry or consumer packaged goods (CPG) industry is mainly accountable for producing, distributing and marketing the fast-moving consumer goods. The FMCG industry is considered as the fourth largest sector in the Indian economy. How big is the FMCG industry? India’s FMCG market was valued at 110 billion U.S. dollars in 2020. The FMCG sector in India is divided into two parts: urban and rural segments. The rise in growth of FMCG products is visible especially in semi-urban and rural areas. The Indian FMCG sector grew by 16%, which is a steep growth rise in the financial year 2021, according to the survey of India Brand Equity Foundation (IBEF). 

 

What are the advantages of FMCG in India?

The advantages of FMCG in Indian Economy are:

  • Rising the digital connectivity
  • Growth in disposable income
  • Health investment opportunities

 

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