DEFINITION of ‘Fast-Moving Consumer Goods (FMCG) ‘
These are consumer goods products that sell quickly at relatively low cost – items such as milk, gum, fruit and vegetables, toilet paper, soda, beer and over-the-counter drugs like aspirin.
BREAKING DOWN ‘Fast-Moving Consumer Goods (FMCG) ‘
Nearly everyone in the developed and developing world uses fast-moving consumer goods (FMCC) every day. They are the small-scale consumer purchases we make at the produce stand, grocery store, supermarket and warehouse outlet. FMCG have short shelf lives, so, while the profit margin on individual FMGG sales is low, the volume of sales makes up for it. The market for $3.99 orange juice is a lot larger than the market for $399 juicing machines.
The FMCG marketplace is huge and includes some of the largest companies in the world – Dole Foods Co., The Coca-Cola Co. (KO) Unilever <UL), General Mills, Inc. (GIS). As investments, FMCG stocks are a generally low-growth, but safe bets with predictable margins, stable returns and regular dividends.
FMCG accounts for more than half of all consumer spending, but they tend to be low-involvement purchases. Consumers are more likely to show off a durable good such as a new car or beautifully designed smartphone, than wax poetic about a new energy drink they picked up for $2.50 at the convenience store.