Not Marketing Sustainability? New Study Shows You’re Losing Sales If So

The 2024 Sustainable Market Share Index (SMSI), an annual research initiative at the NYU Stern Center for Sustainable Business (CSB) in partnership with Circana, has found that consumer packaged goods (CPG) products with sustainable attributes marketed on the package enjoy 23.8 percent market share, up from 21.2 percent in the previous year.

“Sustainability isn’t just a trend; it’s a business imperative,” said Joan Driggs, vice president of content and thought leadership at Circana. “This research demonstrates that products marketed as sustainable are not only performing well but outpacing conventional goods in growth, proving their value for consumers and the bottom line alike.”

CPG products marketed as sustainable in the U.S. have been steadily gaining market share, driving growth faster than conventionally marketed alternatives. However, the research reveals that current U.S. market performance falls significantly behind European counterparts studied. The gap highlights immense potential for innovation and investment in sustainable offerings to align with evolving consumer preferences.

“We continue to see sustainable products outpace the growth of conventional, with veteran brands adopting sustainable claims on legacy products and driving category shifts,” said Randi Kronthal-Sacco, senior scholar at the NYU Stern CSB, who leads the research initiative. “We are encouraged to see that even with continued inflation, price premiums remain stable and sustainable products continue to eat into the market share of conventional products.

Key findings from the report include:

• In 2024, the United States’ market share of sustainable products was 23.8 percent. The share of sustainable products and private label products are both steadily increasing at the expense of conventional products.
• The U.K. and German sustainable markets largely outweigh the U.S. share. In the U.K., sustainable products make up 36.8 percent of the market share, and in Germany, 42.0 percent.
  Market share of sustainable products in the U.S. has increased by 9.2 percentage points since 2013.
• Products marketed as sustainable achieved a five-year CAGR of 12.4 percent, growing 2.3 times faster than conventionally marketed products and outpacing the total U.S. market’s 6.8 percent CAGR.
• Nineteen of the 36 individual categories analyzed in the U.S. have seen a 10 percent point increase in the sustainable market share since first analyzed in 2013.
• Sustainable products in the U.S. still enjoy a significant price premium, costing an average of 26.6 percent more than their conventional counterparts. However, the price premium has stabilized, largely unchanged throughout the recent inflationary period. Moreover, the average price premium across all categories is at or below 5 percent in the European markets studied.