Sustainability is no longer a niche trend; it’s evolving into a massive market force worth that’s fundamentally reshaping how consumers make purchasing decisions.
SPINS’ new “Sustainability Signals” report dives into how sustainability demands are impacting the U.S. food and beverage industry, analyzing consumer behavior, regulatory shifts, and category-level performance to identify where growth is accelerating.
Natural products setting the stage
Natural-positioned products are currently outperforming conventional products, with sales surpassing $73 billion annually. These products have achieved remarkable 8% dollar growth year-over-year, driven by a 6% increase in velocity despite carrying an average 25% price premium over conventional alternatives.
And with 70% of naturally positioned food and beverage products now carrying sustainability-related attributes, it appears that sustainable positioning is becoming the norm rather than the exception.
Sustainability drives growth in dairy, staple products
The dairy sector, in particular, has demonstrated successful sustainability adoption. Creams, ice cream, butter, and yogurt have achieved double-digit growth year-over-year when paired with certifications like Non-GMO, Regenerative Organic, or Greener World.
Sustainability attributes also performed particularly well in categories targeting families and children. Certified Upcycled products in breakfast staples showed triple-digit growth, free-range labeling in protein-centric categories delivered 41% growth, and Glyphosate Residue Free certification drove strong performance in pantry staples.
Shoppers look beyond plastic
Consumer behavior is shifting away from plastic packaging across major categories. There were drops in unit sales of plastic-packaged products for six of the top 10 plastic-heavy categories and notable shifts toward alternative packaging.
Aluminum cans gained 230 million units, while plastic bottles declined by 250 million units. And glass packaging in milk showed 20% growth in units/TDP compared to nearly flat performance for plastic.
Consumer intent meets barriers
The consumer landscape presents both opportunities and challenges for manufacturers. While 44% of consumers express willingness to pay more for products that improve environmental health, a significant gap exists between intention and action. Research shows that 36% of consumers who desire sustainable products don’t follow through on purchases due to price and availability constraints.
This disconnect highlights a critical opportunity for manufacturers: brands that can make sustainable options more accessible and affordable stand to capture significant market share from competitors who haven’t addressed these barriers.
Transparency, certifications build trust
Third-party certifications prove crucial for trust-building credibility that drives repeat purchases. Non-GMO certification leads in fostering loyalty, with 97% repeat buyer rates in grocery categories and 90% in refrigerated products.
SPINS’ data shows clear performance benefits for certified products:
- Regenerative Organic certification resulted in 22% growth when standalone and 30.8% when combined with Non-GMO.
- Fair Trade certification showed 12% growth standalone and 13.9% combined with Regenerative Organic.
- Animal welfare certifications consistently delivered double-digit growth across categories.
Regulatory pressures accelerate change
Consumer demand is not the only driving force behind sustainability initiatives. The industry is facing increasingly stringent regulations affecting sustainability, including:
- Environmental requirements: Extended Producer Responsibility (EPR) laws in California, Washington, and other states mandate companies manage packaging lifecycles, driving demand for recyclable and lower-impact materials.
- Animal welfare standards: California’s Proposition 12 restricts sales of products from inhumanely confined animals, with potential federal expansion affecting supply chain practices nationwide.
- Ingredient restrictions: FDA bans on synthetic dyes and additives are expanding, with states like New York and California leading additional restrictions on ingredients like Red Dye 3 and brominated oils.
Essential steps for sustainability success
Success in the sustainable food market requires a three-pronged approach centered on transparency, innovation, and accessibility.
Transparency is the foundation for any sustainability strategy, which includes pursuing relevant third-party certifications that build consumer trust, clearly communicating sustainability claims on packaging where shoppers can easily see them, and ensuring all sustainability messaging is visible and AI-readable for e-commerce platforms where an increasing number of purchase decisions are made.
Innovation for impact represents the second critical pillar, requiring manufacturers to design packaging for circularity and reduced environmental impact, invest in upcycling and waste reduction technologies that address consumer concerns about food waste, and position themselves as category leaders rather than followers in sustainability initiatives. This proactive approach helps companies capture market share while competitors scramble to catch up.
Finally, access and affordability strategies can unlock the significant portion of consumers who want to make sustainability a priority, but face challenges following through. This involves developing private label sustainable options that democratize access to environmentally conscious products, using promotional strategies to reduce price barriers that prevent trial and adoption, and removing friction throughout the entire shopper journey from discovery to purchase to repurchase.
The sustainability trend represents more than consumer preference — it’s becoming a business imperative driven by regulatory requirements, supply chain pressures, and competitive dynamics. And surface-level sustainability claims won’t be enough. Food manufacturers must demonstrate genuine impact through certified practices, transparent communication, and accessible products.
The $73 billion natural products market provides a clear roadmap: meet consumer values with verifiable action, and sustainable growth will follow.
