A Better Way to Market Sustainable Products: Insights from NYU Stern and PwC

Sustainability is increasingly influencing consumer choices, with many shoppers preferring products marketed on their eco-friendly attributes. However, companies often face challenges in tapping into this demand effectively. Research from NYU Stern’s Center for Sustainable Business (CSB) and PwC offers valuable guidance on how to market sustainable products to maximize sales growth, price premiums, and consumer trust.

The Business Case for Sustainability in Consumer Products

• Sales Growth: Analysis of 12 years of US point-of-sale data across 36 consumer packaged goods (CPG) categories revealed that products marketed as sustainable grew at an impressive annual rate of 12.3% from 2019 to 2024 — more than double the growth rate of conventional products.
• Market Share: By 2024, sustainability-marketed items accounted for nearly 24% of overall sales in the analyzed categories, signaling a strong and growing consumer preference.
• Price Premiums: PwC’s 2024 consumer survey indicated shoppers are willing to pay an average premium of 9.7% for sustainable goods. Actual price premiums measured by CSB were even higher, averaging 26.6%, with some product categories like paper goods commanding premiums over 100%, and others, including coffee and chocolate, hovering around 50%.

Maximizing the Impact of Sustainability Marketing

Know Your Audience

• Key demographics purchasing sustainable products include millennials, college-educated consumers, urban residents, and high-income earners.
• Some product categories, such as dairy, see widespread sustainable product adoption across all age groups.
• Understanding which customer segments are most likely to buy sustainable items in your categories is essential for targeted marketing.

Amplify Product Appeal by Linking Sustainability to Core Attributes

• Effective marketing intertwines sustainability claims with the product’s primary desirable qualities (e.g., taste, scent, effectiveness).
• Research from CSB and Edelman shows that combining one core product attribute with one or two sustainability messages can raise consumer appeal by 30 percentage points.
• For example, skincare products perform better when their sustainability claims highlight benefits directly related to skin health, such as “formulated with sustainable ingredients that are good for your skin.”

Focus on Claims that Resonate and Build Trust

• Claims connecting sustainability to consumer benefits attract the most appeal:
  • Protecting human health (absence of harmful ingredients)
  • Cost savings
  • Support for local agriculture and food systems
  • Benefits for children and future generations
  • Animal welfare
  • Use of local or sustainable sources
• Less effective claims involve scientific properties (biodegradability, climate neutrality), traceability, packaging (except all-recycled content), and generic sustainability certifications.
• While certification seals validate claims for regulators and some consumers, they must be complemented with clear messaging to enhance trust.

Ensuring Credible and Compliant Claims

• Avoid vague or generic claims like “clean,” “natural,” or “safe,” which are prone to legal challenges, especially for products used by children or applied to the body.
• Keep abreast of evolving regulations, particularly in the EU, where directives like the Corporate Sustainability Reporting Directive and Green Claims Directive require:
  • Scientific substantiation of environmental claims
  • Monitoring of environmental and social value chain issues
• Develop capabilities in value chain analysis and product traceability to meet regulatory expectations and enhance consumer confidence.

Conclusion

Marketing sustainable products effectively hinges on presenting a strong, evidence-backed business case, aligning sustainability attributes with core product qualities, and delivering trustworthy, consumer-relevant claims. By focusing on these areas, businesses can tap into the growing green consumer market, realize substantial sales growth, and justify premium pricing in a competitive landscape.

Authors: Tensie Whelan, Distinguished Professor and Founding Director of NYU Stern’s Center for Sustainable Business; David Linich, Principal at PwC US specializing in decarbonization and sustainable operations.

Sources: NYU Stern Center for Sustainable Business, PwC Consumer Survey 2024, Circana point-of-sale data analysis

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