Today more than ever, consumer packaged goods (CPG) companies are responding to changing generational expectations, including offering more sustainable product offerings. IRI, Chicago, and NYU Stern Center for Sustainable Business (CSB), New York, released the findings of a new U.S.-based study and established the Sustainable Share Index, an in-depth analysis of consumer purchases of products marketed for their sustainable attributes.
 

The Sustainable Share Index research team sought to discover how purchases of sustainable products have changed over time and how these trends might play out among different CPG product categories.

CSB analyzed data from across 36 product categories, representing approximately 40% of total CPG sales, excluding tobacco and alcohol. The research found that sustainability-marketed products delivered 50.1% of market growth from 2013-2018 while representing 16.6% of the CPG market in dollar sales in 2018.

“Across industries, companies are beginning to recognize that sustainable business is good business,” says Tensie Whelan, professor at NYU Stern and founding director of CSB. “Results from this research reinforce the idea that embracing sustainability leads to better business results. We are excited to launch the Sustainable Share Index and look forward to continuing our research in the years to come.”

Additional findings entail:

  • Across all categories, sustainability-marketed products delivered $113.9 billion in sales in 2018; +29% vs. 2013 and are expected to grow to $140.5 billion by 2023, based on an extrapolation of the analysis.
  • Products marketed as sustainable grew 5.6 times faster than conventionally-marketed products, and 3.3 times faster than the CPG market.
  • In over 90% of individual product categories examined, the growth of sustainability-marketed products outpaced total category growth.
  • Sustainability-marketed products account for 16.6% share of market in 2018, up from 14.3% in 2013.
  • Sustainable products have more than 20% category share in many food categories, including cheese.

“CPG companies should take notice—the benefits of sustainability cannot be ignored,” says Randi Kronthal-Sacco, senior scholar, marketing and corporate outreach, Stern’s Center for Sustainable Business, who led the research initiative. “In fact, this groundbreaking research shows the significant impact that sustainable products have on overall category growth.”

"IRI is pleased to partner with NYU Stern's Center for Sustainable Business on this eye-opening study, and we're delighted to reveal the results publicly at this year’s IRI Growth Summit in Denver, where over 1,500 CPG and retail leaders will convene," says Robert Tomei, president, market and shopper intelligence at IRI. "The results of this research show that sustainable products play a key role in consumer decision-making, and we know this is particularly important to Millennials and GenXers.”