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

The Challenge of Marketing Sustainable Products

Despite growing consumer preference for sustainable products, companies often struggle to translate this demand into profitable growth. Key obstacles include:

• Demonstrating that sustainable products can deliver strong sales growth and justify higher prices.
• Balancing sustainability features with other product attributes customers desire.
• Communicating trustworthy sustainability claims amid a confusing array of labels and certifications.

Encouraging Growth and Price Premiums

Research from NYU Stern Center for Sustainable Business (CSB), analyzing 12 years of U.S. point-of-sale data via Circana, reveals:

• Sustainability-marketed consumer goods grew sales at an annual rate of 12.3% between 2019 and 2024, more than double the growth rate of conventional products.
• By 2024, sustainable products accounted for nearly 24% of total consumer packaged goods (CPG) sales, covering about 40% of the market (excluding alcohol and tobacco).
• PwC’s 2024 consumer survey found shoppers willing to pay on average 9.7% more for sustainably produced or sourced goods.
• Actual price premiums average 26.6% higher than conventional products, with some categories like paper products exceeding 100% premium, and coffee, cereal, and chocolate around 50% premium.

Maximizing Marketing Impact: Three Strategic Steps

1. Recognize the Market Reach and Customer Segments

• Millennials, college-educated shoppers, urban residents, and high-income earners purchase more sustainability-marketed products.
• Sustainable items also hold significant market share across demographics in categories like dairy.
• Understanding specific customer groups within product categories is essential to tailor marketing efforts effectively.

2. Amplify Sustainable Appeal by Integrating Core Product Qualities

• Successful marketing combines a product’s core benefit (taste, scent, effectiveness) with one or two targeted sustainability messages.
• Research by CSB and Edelman shows this approach increases product appeal by 30 percentage points on average.
• Sustainability claims should relate directly to attributes important to the category. For example, skincare products highlight "formulated with sustainable ingredients that are good for your skin," linking sustainability to personal benefit.

3. Prioritize Credible and Consumer-Valued Claims

• Consumers respond best to claims that highlight tangible benefits, such as:
  • Protecting human health (free of harmful ingredients)
  • Saving money
  • Supporting local farms and food systems
  • Safeguarding animals’ health
  • Originating from local or sustainable sources
• Less effective claims involve scientific jargon (biodegradability, climate-neutral), generic sustainability certifications, or traceability without clear consumer relevance.
• Certification seals validate claims for regulators and discerning consumers but are insufficient alone for broad appeal.

Navigating Regulations and Building Trust

• Ambiguous claims like "clean," "natural," or "safe" risk legal challenges, especially for products used by children or applied to skin.
• Companies should monitor evolving regulations such as the EU’s Corporate Sustainability Reporting Directive and the pending Green Claims Directive, which demands rigorous scientific substantiation of environmental claims.
• Establishing strong value chain analysis and traceability capabilities will enhance claim credibility and regulatory compliance.

Conclusion

Marketing sustainable products effectively requires:

• A clear business case backed by robust sales and price premium data.
• Crafting messages that harmonize core product attributes with relevant sustainability benefits.
• Delivering precise, evidence-based, and consumer-trusted claims.

By adopting these research-backed strategies, companies can unlock the full potential of sustainable products, satisfying growing consumer demand while driving profitable growth.

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

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