How to Drive Sustainable Food and Beverage Sales
In a world increasingly driven by sustainability, the food and beverage industry stands at a pivotal point. With an ever-growing consumer base seeking eco-friendly options, tapping into this market can yield significant rewards. Below, we’ll explore how to enhance the appeal of sustainable products and maximize sales.
Understanding the Market Dynamics
Sustainability has become a mark of quality, with nearly 25% of FMCG products in the U.S. showcasing some form of sustainability claim, as reported by market intelligence agency Circana. Recognizable labels such as USDA Organic, non-GMO, and B-Corp certifications not only attract conscientious shoppers but also help retailers align with the values of a substantial segment of the market.
Price Gap Closing
The price differential between sustainable and conventional products has narrowed significantly—from 40% in 2018 to about 27% in 2024. This shift opens the door to a broader audience eager to invest in sustainable choices without breaking the bank.
Key categories making waves in sustainability include:
- Yogurt
- Natural Cheese
- Milk
- Fresh Bread
- Coffee
- Soup
Breaking the Sustainable Shopper Myth
A recent study published in the Journal of Marketing challenges the notion that sustainable shoppers are a homogeneous group. Retailers often stock sustainable items in areas predominantly populated by affluent, liberal consumers. This geographic bias can overlook the diverse realities of consumer preferences.
A Missed Opportunity
Interestingly, while there’s a correlation between liberal political views and sustainable consumption, the notion that race or income solely dictate purchasing habits lacks substantial economic evidence. In fact, research indicates that minority consumers may be more inclined to support sustainable brands.
Insights from Data Analysis
This study utilized comprehensive data from Circana, analyzing sustainable offerings across various CPG categories such as yogurt, coffee, and frozen dinners from over 25,000 stores nationwide. It categorized products as sustainable based on criteria like organic, non-GMO, and Fair Trade certifications.
“In the U.S. market, refrigerated yogurt accounts for over 90% of total dollar sales, while beverages represent 9.5%.”
— Circana
Do Consumers Really Prioritize Sustainability?
Consumers express a desire for sustainable products, but will they pay the premium?
Price Premium Insights
Cost premiums on sustainable foods vary significantly by category. In dairy:
- Natural cheese has the lowest premium.
- Yogurt and milk exhibit higher price differentials.
Despite this, consumer propensity to buy sustainable products generally remains strong, particularly in grocery stores where sales don’t significantly dip with price increases—except for yogurt drinks.
Profitability Linked to Claims
Not all sustainability claims are created equal. For yogurt, the label “Certified B-Corp” correlates with the highest profit potential, followed by “non-GMO” and “organic”. Meanwhile, in the coffee segment, “Fair Trade” and “Sustainably Sourced” hold significant appeal for consumers.
The Power of Multiple Claims
Multiple sustainable certifications on packaging can enhance profit potential across various categories, indicating a clear demand for transparency and ethical sourcing.
Capitalizing on Private Label Opportunities
Retailers can further capitalize on this trend by developing private label products. With private label goods boasting a 22% share of CPG/FMCG sales in the U.S., there’s ample room to grow. As sustainability takes center stage, creating value-driven, sustainable private label lines can meet rising consumer demand while improving overall profitability.
Conclusion
Ignoring the evolving landscape of consumer preferences could hinder growth in the competitive food and beverage sector. By reevaluating stocking strategies and embracing a wider range of sustainable offerings, retailers can unlock significant sales potential. Sustainability sells—are you ready to invest in a greener future?
Sources:
Bollinger, B., Kronthal-Sacco, R., & Zhu, L. (2025). EXPRESS: Sustainable Product Profit Potential and Availability. Journal of Marketing, 0(ja). DOI: 10.1177/00222429251343823
