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

Sustainable products are increasingly favored by consumers, yet companies often face challenges in effectively marketing them to unlock growth and justify premium pricing. New research from NYU Stern’s Center for Sustainable Business (CSB) and PwC sheds light on strategies that enhance the appeal and credibility of sustainable consumer goods, offering actionable guidance for marketing leaders.

The Business Case for Sustainability in Consumer Products

• Strong Sales Growth: Analysis of 12 years of U.S. point-of-sale data by CSB reveals that sustainability-marketed products grew sales by 12.3% annually from 2019 to 2024, more than double the growth rate of conventional products.
• Market Share Impact: By 2024, sustainable items accounted for nearly 24% of total sales in 36 key consumer packaged goods categories, covering about 40% of the CPG market (excluding alcohol and tobacco).
• Price Premiums: Surveys and studies confirm consumers’ willingness to pay a premium—on average 9.7% more, with sustainability-marketed products commanding a 26.6% price premium over conventional goods. Premiums exceed 100% in some paper products and about 50% in categories like coffee, cereal, and chocolate.

Key Marketing Strategies to Capture the Value of Sustainability

1. Targeting the Right Consumer Segments

Certain demographics show stronger preferences for sustainable products:

• Millennials
• College-educated shoppers
• Urban dwellers
• High-income earners

Additionally, sustainability-marketed products hold significant sales shares across all age groups in essential categories such as dairy. Companies should identify and focus on the customer groups most inclined to purchase sustainable options in their product lines.

2. Amplifying Appeal by Connecting Sustainability to Core Product Qualities

Effective marketing blends sustainability claims with a product’s primary attributes:

• A skincare product might emphasize “formulated with sustainable ingredients that are good for your skin.”
• For food, highlighting rich taste alongside eco-friendly sourcing can boost appeal.

Research shows that coupling one core product claim with up to two sustainability claims increases a product’s overall appeal by about 30 percentage points across diverse customer groups.

3. Focusing on Consumer-Valued and Trustworthy Claims

Consumers respond most favorably to sustainability messages that:

• Protect human health (e.g., “no harmful ingredients”)
• Save money
• Support local farms and food systems
• Benefit children and future generations
• Preserve animal health
• Originate from local or sustainable sources

Less effective claims involve scientific terms like “biodegradable” or “climate-neutral,” vague certifications, or packaging claims (except for notable ones like all-recycled content). Certification seals are useful for regulatory validation but insufficient alone to enhance consumer appeal.

Best Practices: Precision and Evidence in Sustainability Messaging

• Avoid ambiguous terms such as "clean," "natural," or "safe," which are often legally challenged.
• Monitor evolving sustainability regulations, including EU directives like the Corporate Sustainability Reporting Directive and the proposed Green Claims Directive, which require scientific substantiation of environmental claims.
• Build robust capabilities in value chain analysis and traceability to provide credible evidence supporting sustainability claims.

Conclusion

Marketing sustainable products effectively requires a clear business case, strategic consumer targeting, and credible, appealing messaging that ties sustainability directly to what consumers care about most. By adopting these researched insights, companies can unlock growth potential, justify price premiums, and foster deeper trust with shoppers, contributing to both profitability and sustainability goals.

About the Authors

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

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