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Featured Insight:
Sustainability: The CPG Growth Opportunity
Sustainability-marketed products are growing at twice the rate of conventionally marketed alternatives, contributing over 40% of the sector's total growth since 2013, according to research from Circana and New York University Stern Center for Sustainable Business...
How Consumer Demand for Sustainability in Retail Drives Growth and Innovation
As the definition of sustainability has widened to encompass environmental impact, economic resilience, ethical governance, and other factors centered on the well-being of people and the planet, brands and retailers have more opportunities to engage with mindful consumers by understanding who they are and what propels their decisions. Shoppers are certainly interested, driving double-digit growth in sustainability-marketed products over the last five years. Even amid stiff market headwinds, growth and innovation have accelerated across many areas, and considerations ranging from responsible sourcing to food waste reduction to inclusive product lines open avenues for additional development and success.
Sustainability in Today’s Market
A Key Driver of Consumer Spending and Market Growth
One in nearly every $4 is now spent on items that support sustainability in some way. Circana’s research affirms that it is a real purchase driver: close to one-third of U.S. consumers report they seek out and buy from retailers that offer sustainable products. On the flip side, it can be a barrier to growth if a brand or retailer does not share at least some facet of sustainability in its products or business.
Research led by Circana and New York University’s Stern Center for Sustainable Business indicates that items marketed as sustainable currently comprise less than one-quarter of the overall marketplace (23.8%) but the big-picture takeaway for brands and retailers is the pace of growth. Products under the sustainability umbrella contributed more than 40% of market growth between 2013 and 2024.
Sustainability shows strength across categories and characteristics
The growth of sustainable products sold in retail channels is coming from many categories. In the nonfood arena, household items such as floor cleaners, napkins, cups and plates, paper towels, and facial tissue have nabbed more than 20% market share, while in health and beauty, more share is being captured by sustainable soaps, deodorant, and skincare products. Circana’s data reveals that strong categories for sustainable food and beverage products include fresh bread, cookies, coffee, natural cheese, milk, and yogurt, among others.
The expansion across categories mirrors the different attributes of sustainability. Environmental responsibility remains the hallmark of products billed as sustainable, including items made with sustainable materials and sold in eco-friendly packaging. Circana’s research affirms that 98% of consumers link environmental characteristics with sustainability.
Meanwhile, sustainable supply chain and product lifecycle attributes such as ethical sourcing, circularity, and transparency in production methods are likewise evident in better-for-the-planet and better-for-people products sold at retail. On the social side, consumers have demonstrated interest in attributes related to community engagement, inclusivity, and fair labor practices, among other considerations. Although sustainability matters to people in every demographic, younger millennial and Gen Z buyers are slightly more likely to associate sustainability with social and economic impact.
There is some overlap with health and wellness trends, too. For example, as many shoppers gravitate to clean eating, they place importance on ingredient sourcing and transparency.
How Are Consumers Buying Into Sustainability?
Values Over Price: How Sustainability Shapes Shopper Choices
Shoppers who embrace sustainability claims are especially engaged, given that their beliefs and values often drive their purchase behaviors. Even during the inflationary period of the past few years, people weighed price against their personal priorities and made trade-offs that contributed to the growth of sustainable products.
Millennials and Gen Z sentiments fuel sales
While 90% of consumers agree that sustainability factors are personally important to them, some cohorts take those issues into account more than others when weighing what to buy. For example, 37% of millennials say they seek out and shop at retailers that offer sustainable products, compared to 34% of non-millennials.
Circana’s recent report on generational shifts shows that Gen Z shoppers prioritize ethical consumption and activism on the climate and social front. Although members of Gen Alpha are under the age of 12 as of 2025, they are the second digitally-native generation and are already showing that they are socially conscious.
Research and discovery play into purchases
Consumers who are interested in sustainable products are engaged in many ways. Often, shoppers do some research ahead of their purchase, learning more about specific products and brands online or by reading labels.
The point of sale remains pivotal with these buyers. Circana’s research finds that 69% of consumers discover sustainable products at the shelf or on display while shopping. This behavior underscores the importance of on-package messaging and both in-store and online promotions and education.
SOLUTION SELECTOR
Tap into Circana’s Sustainability Insights
Circana is a leader in providing technology, AI, and data to fast-moving consumer packaged goods companies, durables manufacturers, and retailers seeking to optimize their businesses. Circana provides a holistic look at the market for sustainable products across industries and categories. Our depth and breadth of market and consumer insights, along with robust analytical models and trusted industry expertise, inform strategic planning and tactical decision-making. Because sustainability is not a one-size-fits-all concept and consumers prioritize environmental, economic, and social attributes differently, customer-centric solutions help determine the right path to greater share and growth.
Keeping Up the Sustainability Growth Curve
Unlocking Growth Through Mindful Customer Insights and Sustainable Innovation
Further growth in the sustainability space can be unlocked by understanding your mindful customers and focusing on elements that resonate with them. To maintain or boost market share, brands and retailers can innovate in product development and in their approach to promoting sustainability.
Be mindful of messaging
CPGs and retailers can connect with sustainability-influenced consumers by clearly communicating at different points in the shopping journey. Package design is an important touchpoint, as shoppers read labels to understand how a product was made, packaged, and disposed of at a later point in the lifecycle and even how the business leans into sustainability in its operations.
Brands and retailers can also share their sustainability messaging through in-store and digital platforms, ranging from websites and social media to retail media. Authenticity is integral in communications and should go beyond one or two claims on a package to convey how sustainability is integrated across a business.
Connect with committed cohorts
For younger shoppers in particular, sustainability is a table stake. Over the next 5 to 10 years, millennial, Gen Z, and Gen Alpha consumers will drive growth, both in the sustainability sector and in the overall marketplace.
Understanding what motivates younger, sustainability-focused shoppers will help brands and retailers determine what sustainable practices, product attributes, and messaging resonate with them.
Expand offerings from brands and store brands
While CPGs are innovating in product design and sharpening sustainability messaging, several retailers are dovetailing sustainability with their own private label programs, which include more premium tiers of store brands. Circana’s insights confirm that sustainability and private label offerings are both outpacing conventional products in terms of growth, and the marriage of those elements can spur additional improvements in sales and market share.
