A Better Way to Market Sustainable Products

Growing Consumer Demand and Market Potential

Sustainable products have seen increasing consumer preference, yet marketing these goods remains challenging for product companies. Key hurdles include demonstrating the growth potential and price premiums of sustainable items, balancing sustainability with other product features, and building customer trust amid numerous competing claims and labels.

Research by NYU Stern’s Center for Sustainable Business (CSB) and PwC highlights encouraging trends and actionable strategies to market sustainable products effectively.

Compelling Business Case for Sustainability

• Sales Growth: Analysis of 12 years of U.S. consumer packaged goods (CPG) data from 36 categories shows sustainability-marketed products grew at an annual rate of 12.3% from 2019 to 2024—2.3 times faster than conventional products.
• Market Share: These products accounted for 23.8% of overall sales in 2024.
• Price Premiums: Consumers express a willingness to pay about 9.7% more for sustainable goods (PwC survey, 2024), with actual premiums averaging 26.6%. Some categories, like paper products, command premiums exceeding 100%, while coffee, cereal, and chocolate have premiums around 50%.

Strategic Marketing Approaches

1. Understand Your Audience and Product Categories

Certain demographics—millennials, college-educated shoppers, urban dwellers, and high-income earners—are more inclined to purchase sustainability-marketed goods. Recognizing which customer groups favor sustainable products within specific categories is essential for targeted marketing efforts.

2. Blend Sustainability with Core Product Attributes

Successful marketing combines the product’s primary appeal (e.g., taste, efficacy) with one or two sustainability messages. This approach increases product appeal by about 30 percentage points across customer segments.

Example: Skincare products positioned as “formulated with sustainable ingredients that are good for your skin” effectively link sustainability with product benefits.

3. Prioritize Credible, Consumer-Relevant Claims

Customers respond best to claims highlighting:

• Protection of human health (absence of harmful ingredients)
• Cost savings
• Support for local farms and food systems
• Benefits to children and future generations
• Animal health preservation
• Use of local or sustainable sources

Less persuasive claims include scientific properties (biodegradability, climate neutrality), traceability, packaging (except for all-recycled content), and generic sustainability certifications—though seals remain important for regulatory validation.

4. Ensure Precision and Transparency in Claims

Ambiguous or generic claims ("natural," "clean," "safe") are prone to legal challenges, especially for products used by vulnerable groups (children, ingestion, topical use). Companies must:

• Provide scientific evidence and supporting data
• Monitor evolving regulations such as the EU Corporate Sustainability Reporting Directive, Due Diligence Directive, and Green Claims Directive
• Develop strong value chain analysis and traceability capabilities

Conclusion

With sustainability-marketed products rapidly gaining sales and commanding significant price premiums, companies have a sound business case for investing in sustainable product development and marketing. Success depends on understanding consumer segments, harmonizing sustainability messaging with core product benefits, emphasizing claims that resonate with customers, and rigorously substantiating claims to build trust in a complex regulatory environment.

Authors:
Tensie Whelan, Distinguished Professor of Practice and Founding Director, NYU Stern Center for Sustainable Business
David Linich, Principal at PwC US, expert in decarbonization and sustainable operations

References:

• NYU Stern Center for Sustainable Business & PwC, 2024-2025 market and consumer research
• PwC Consumer Survey, 2024
• Circana point-of-sale data analysis, 2012-2024

This summary encapsulates key insights for marketing leaders aiming to unlock the value of sustainable products in the growing green consumer market.

Design Delight Studio curates high-impact, authoritative insights into sustainable and organic product trends, helping conscious consumers and innovative brands stay ahead in a fast-evolving green economy.