A Better Way to Market Sustainable Products

Introduction

Sustainable products are increasingly preferred by consumers, yet companies often struggle to effectively market these offerings. Challenges include demonstrating growth potential and price premiums, balancing sustainability with key product features, and delivering trustworthy claims amidst numerous competing labels and certifications.

Research Insights by NYU Stern and PwC

Collaborative research from NYU Stern’s Center for Sustainable Business (CSB) and PwC offers actionable guidance for marketing leaders to unlock the full value of sustainable products by:

• Clarifying the business case for sustainability.
• Amplifying the appeal of sustainable product attributes.
• Elevating credible and trusted sustainability claims.

The Business Case for Sustainability

• Sales Growth: Analysis of US point-of-sale data across 36 consumer packaged goods (CPG) categories showed sustainability-marketed products grew at an annual rate of 12.3% (2019-2024), outpacing conventional goods by 2.3 times.
• Market Share: In 2024, sustainable products accounted for nearly 24% of overall sales within the covered categories.
• Price Premiums: Surveys and studies confirm consumers are willing to pay approximately 9.7% more for sustainably produced goods. CSB research found actual premiums averaging 26.6%, with some paper products exceeding 100% and categories like coffee, cereal, and chocolate around 50%.

Targeting the Right Customer Segments

Understanding which groups drive sustainable product sales improves marketing effectiveness. Key demographics include:

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

Sustainability-marketed products also hold significant shares in common categories such as dairy, across all age groups.

Crafting Effective Marketing Messages

Marketing sustainable products successfully requires blending core product qualities with sustainability attributes, similar to how music producers harmonize instruments for a perfect tune.

• Core Attribute First: Highlight the main product benefit (e.g., taste, cleanliness).
• Add Sustainability Layer(s): Incorporate one or two sustainability claims to bolster appeal, boosting attractiveness by 30 percentage points on average.
• Category-Relevant Messaging: Tailor sustainability claims to qualities important in the product’s category (e.g., “formulated with sustainable ingredients good for your skin” in skincare).

Building Trust with Credible Claims

Research reveals that the most appealing claims relate to direct consumer benefits:

• Protecting human health (absence of harmful ingredients)
• Saving money
• Supporting local farms and food systems
• Benefiting children and future generations
• Preserving animal health
• Originating from local or sustainable sources

In contrast, claims focused on scientific properties (e.g., biodegradable), traceability, general packaging, or sustainability certifications alone often have less consumer appeal. Certifications still play a role in validation, especially for regulatory compliance, but must be supplemented with relatable messaging.

Ensuring Precision and Compliance

• Avoid vague claims like “clean,” “natural,” or “safe” without evidence, as these are prone to legal challenges, especially for products used by children or applied to skin.
• Stay informed on evolving regulations, including:
  • The EU Corporate Sustainability Reporting Directive
  • The Corporate Sustainability Due Diligence Directive
  • The anticipated EU Green Claims Directive, which will require scientific substantiation of environmental claims.

Robust value chain analysis and traceability mechanisms are critical for valid claims and regulatory adherence.

Conclusion

Marketing sustainable products successfully hinges on a clear business case, targeted customer understanding, carefully crafted messaging linking sustainability with product benefits, and credible, evidence-backed claims. By adopting these practices, companies can harness the growing consumer demand for sustainability, achieve price premiums, and build lasting trust.

Authors:

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

Tags: consumer packaged goods, sustainable marketing, price premiums, credible claims, sustainability regulations

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