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

Sustainable products are increasingly preferred by shoppers, yet consumer product companies face challenges in marketing these offerings effectively. Research from NYU Stern’s Center for Sustainable Business (CSB) and PwC highlights key strategies to unlock growth potential, justify price premiums, and build consumer trust in sustainability claims.

The Business Case for Sustainable Products

• Strong Sales Growth: Analysis of 12 years of US point-of-sale data (covering 40% of the consumer packaged goods market) shows sustainability-marketed products grew at an average rate of 12.3% annually between 2019 and 2024, over twice the rate of conventional products.
• Increasing Market Share: By 2024, such products accounted for nearly 24% of total sales in the analyzed categories.
• Meaningful Price Premiums: PwC’s 2024 consumer survey of 20,000 respondents found willingness to pay nearly 10% more for sustainably produced goods, while CSB research revealed an actual premium averaging 26.6%, with some categories like paper products exceeding 100% premiums.

Strategic Marketing Actions to Maximize Sustainability Value

1. Know Your Audience and Categories

• Customer segments such as millennials, college-educated shoppers, urban residents, and high-income earners are more inclined to buy sustainability-themed products.
• Sustainability-marketed products hold significant sales shares in categories like dairy across all age groups, often commanding sizable price premiums.
• Action: Identify which consumer groups are key purchasers within your product categories to tailor marketing efforts effectively.

2. Amplify Sustainable Products’ Core Appeal

• Effective marketing blends core product attributes (e.g., taste, quality, scent) with one or two sustainability messages.
• This combination increases product appeal by an average of 30 percentage points.
• Example: A skincare product emphasizing "formulated with sustainable ingredients that are good for your skin" links sustainability directly to consumer priorities.
• Action: Craft pitches that connect sustainability features with the product qualities most valued within your category.

3. Promote Credible, Consumer-Valued Claims

• Research highlights six sustainability claims that resonate most with consumers:
  • Protecting human health (no harmful ingredients)
  • Saving money
  • Supporting local farms and food systems
  • Helping children and future generations
  • Preserving animal health
  • Using local or sustainable sources
• Less impactful claims include scientific properties (biodegradability), traceability, and generic certifications, although certifications help validate claims.
• Action: Favor precise, evidence-backed claims over vague terms like “natural” or “clean” to avoid legal challenges and build consumer trust.

Navigating Regulatory Landscape and Ensuring Compliance

• Ambiguous claims often face legal scrutiny, especially for products used on skin, ingested, or for children.
• Companies must monitor evolving regulations such as:
  • The EU’s Corporate Sustainability Reporting and Due Diligence Directives
  • The proposed EU Green Claims Directive requiring scientific substantiation of environmental claims
• Investing in value chain analysis and traceability capabilities is essential for credible and compliant sustainability messaging.

Conclusion

Sustainability offers robust growth and premium opportunities in consumer products, but realizing full value demands clear, credible messages that align with core product benefits and meet consumer expectations. Companies that strategically target the right customer segments, blend sustainability with product quality, and rigorously substantiate claims will succeed in building trust and driving sales in the expanding sustainable market space.

Authors: Tensie Whelan, Distinguished Professor at NYU Stern and Founding Director of CSB; David Linich, Principal at PwC US specializing in decarbonization and sustainable operations.

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.