Against the odds, sustainably positioned products are gaining market share, outselling and outpricing conventional alternatives even as consumers become more budget-conscious and a shifting political and legal climate dampen environmental claims, according to new data from NYU Stern Center for Sustainable Business and Circana.
Analysis of more than 250,000 products in 36 categories over the past 13 years in the Sustainable Market Share Index released this month show sustainability-marketed products captured an additional 1.6% of annual dollar share of CPG sales in the past year – reaching 25.4% of share in 2025 compared to 23.8% in 2024 and a mere 14.6% when the index began in 2013.
“This is a huge growth off a sizable base. In fact, in the 13 years we’ve been doing this, it is the third largest year-over-year increase,” said Randi Kronthal-Sacco, senior scholar and adjust professor at NYU Stern Cetner for Sustainable Business.
She added that sustainably marketed products are growing at a five-year compound growth rate of 10.9%, which is a whopping 4.9 times faster than conventionally-marketed products, which grew at a 2.2% CAGR in the same period.
Sustainably-marketed products also are “punching above their weight class” by driving 44.9% of the CPG market growth between 2013 and 2025 despite capturing only 25% of the CPG market dollar share in 2025, she added.
“This is a huge growth engine for CPG,” she added.
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The gains are even more remarkable given the current economic, political and legal environment which, on the surface, would appear to discourage and devalue environmental, social and governance sales and claims.
Under the Trump administration’s second term, political leaders have rolled back many ESG policies initiated under the Biden administration, restricted the use of ESG factors in retirement investments and dismantled federal diversity, equity and inclusion programs.
This paired with an uptick in litigation targeting environmental claims, such as carbon neutral, green or sustainable, has prompted some packaged food and beverage companies to pull back on environmental claims and initiatives.
How impactful is environmental marketing?
Companies’ decisions to pull back on environmental marketing may be a mistake based on additional insights from the Sustainable Market Share Index that suggest shoppers not only are drawn to products making environmental claims, but shunning brands that do not.
“We are seeing that sustainability is more than just nice to have. It is increasingly an expectation,” said Lauren Hazenfield, principal of CPG Thought Leadership Advisory at Circana.
She explained that 85% of consumers surveyed in the Sustainable Market Share Index agreed it is important that name brand product manufacturers practice sustainability.
This is up a significant 5 percentage points from 2025 – “signaling that products that don’t meet sustainability criteria might be removed from a consumer’s consideration set altogether,” she added.
This idea is reinforced by 74% of consumers agreeing that they are more likely to choose a product if a company practices sustainability, which is even higher among younger consumers at 78% for Gen Z and 76% for younger Millennials, according to the data.
What sustainability claims resonate with consumers?
Companies that want to tap into this market potential through marketing should finetune claims based on the consumer set they want to reach, as values differ by generation.
For example, older consumers are more concerned about pollution and food waste reduction, while younger consumers over-index in being extremely concerned about biodiversity loss, overfishing, global warming and climate change, according to the report.
When it comes to product claims, consumers are more motivated by those tied to ingredients, processing, pesticide-free, and reusable or recyclable, Hazenfield said.
She added that more ambiguous claims, like organic or paraben free, are less impactful.
“If they don’t understand what the claim means, it is not going to drive decision making, and so clarity and lack of understanding can still be a barrier in many cases,” she added.
The importance of sustainability claims also differs by category, with consumers placing more value in them for fresh foods than packaged options. For example, the research found, 86% said sustainability considerations are extremely or somewhat important when choosing produce, but only 74% said the same about beverages and 71% about snacks – both of which tend to be more processed and packaged.
How much more will consumers pay for sustainable products?
The research shows a desire to buy sustainable products across consumer groups and generations – but income, education, age and where they live factors into the percent of money they spend on sustainability-marketed products, Hazenfield noted.
Younger consumers with college degrees and higher incomes who live in urban areas are more likely to spend more on sustainability-marketed products, while seniors who are low income with a high school degree or less and who live in rural areas are less likely to buy them.
Of these barriers, prices is the most influential – but that doesn’t mean consumers are unwilling to pay more for sustainability-marketed products.
The research found consumers are willing to pay 9% more for products with sustainability features. But, it also found the average price premium of sustainability-marketed products was a whopping 27%.
This shows that “it’s not that consumers are unwilling to pay for sustainability. It is that at times, there may be a mismatch between what sustainability feels worth and what they’re being asked to pay, especially with hard choices that people are faced with,” Hazenfield said.
She suggested brands and retailers do not have to lower prices to close this gap. Rather, they focus more on the sustainability claims that resonate the most with their target consumer and layer in claims around additional benefits, including quality and performance.
She reiterated that consumers are willing to pay more for products with claims that are tangible and have personal benefits. For example, consumers on average said they would pay 11.2% more for a product claim on no harmful chemicals and 9.9% more for a product that is cruelty-free or does not test on animals. At the other end of the spectrum, they are willing to pay only 6.8% for carbon neutral claims.
Tips to make the most of sustainability marketing
Looking ahead, the research suggests sustainability-marketing will continue to influence consumers and the most effective way to maximize the impact of these claims is to:
- Make the impact understandable by translating claims into plain language,
- Link sustainability claims to personal benefits,
- Prominently place sustainability claims to simplify discover, and
- Tailor sustainability claims to different consumer groups’ motivators, expectations and barriers.
