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

Sustainable products continue to gain traction among consumers, yet companies often face challenges in capturing this green demand effectively. Research by NYU Stern’s Center for Sustainable Business (CSB) and PwC sheds light on strategies that help companies unlock the full value of sustainability in marketing.

Key Findings on Growth and Consumer Willingness to Pay

• Sales Growth: Analysis of 12 years of U.S. point-of-sale data across 36 consumer packaged goods (CPG) categories reveals sustainability-marketed products grew at an average annual rate of 12.3% between 2019 and 2024—more than twice the growth rate of conventional products.
• Market Share: By 2024, these products accounted for nearly 24% of overall CPG sales.
• Price Premium: Consumers indicate they are willing to pay about 9.7% more, while actual premiums averaged 26.6%, frequently surpassing 50% in categories like coffee, cereal, and chocolate, and even exceeding 100% for some paper goods.

Who Buys Sustainable Products?

Demographic insights from CSB research identify that:

• Millennials, college-educated individuals, urban residents, and high-income consumers tend to buy more sustainability-marketed products.
• Sustainable products also have broad appeal across ages in categories such as dairy, often commanding significant price premiums.

Crafting Effective Sustainability Messages

Research conducted jointly by CSB and communications firm Edelman underscores how to resonate with customers:

• Combine Core Product Attributes with Sustainability: Highlight a product’s primary appeal (e.g., taste, efficacy) alongside one or two strong sustainability claims. This layered approach boosts product appeal by an average of 30 percentage points.
• Select Relevant Sustainability Messages: Focus on sustainability aspects that align with product category benefits, e.g., in skincare, emphasize “formulated with sustainable ingredients that are good for your skin.”

Which Sustainability Claims Work Best?

According to consumer feedback:

High-Appeal Claims:

• Protecting human health (absence of harmful ingredients)
• Saving money
• Supporting local farms and food systems
• Benefiting future generations and children
• Preserving animal health
• Sourcing locally or sustainably

Less Effective Claims:

• Scientific properties like biodegradability or climate neutrality
• Traceability details
• Packaging claims (except those about 100% recycled content)
• Sustainability certifications alone (helpful for validation but insufficient for appeal)

Navigating Trust and Regulatory Compliance

• Avoid vague or generic claims such as “clean,” “natural,” or “safe,” especially for products applied to skin or consumed, as these are prone to legal challenge.
• Monitoring evolving regulations is crucial. European directives including the Corporate Sustainability Reporting Directive and the forthcoming Green Claims Directive will require companies to substantiate claims with solid scientific evidence and documentation.
• Building robust value chain analysis and traceability capabilities will be essential to comply and maintain consumer trust.

Practical Takeaways for Marketing Leaders

• Understand which customer segments are most receptive to sustainable offerings within your product categories.
• Develop marketing messages that integrate authenticity, product excellence, and carefully chosen sustainability claims.
• Prioritize precision and evidence in claims to avoid legal pitfalls and regulatory sanctions.
• Use certification seals as validation tools but complement them with clear consumer-relevant messaging.

About the Authors

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

By strategically aligning sustainability with core product appeal and building credible, evidence-backed claims, companies can capitalize on growing consumer demand, commanding higher price premiums while fostering trust and long-term brand loyalty in the sustainable products marketplace.

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.