Sustainability Challenge: Adapting to Shifting Consumer Demands

As businesses worldwide navigate an increasingly complex landscape marked by inflation, geopolitical uncertainty, and technological disruptions, one topic remains firmly in the minds of many: sustainability. Despite the multitude of pressing global issues, from political unrest to economic challenges, consumers’ concerns about climate change and sustainability persist. And while businesses have been quick to address short-term challenges, many may be overlooking a significant opportunity to align their strategies with evolving preferences.

In recent years, the conversation surrounding sustainability has shifted from niche discussions to a mainstream expectation. People no longer see environmental responsibility as a “nice-to-have” — it has become a fundamental demand. Yet, despite a growing desire to live more sustainably, many find it difficult to determine exactly how to integrate these values into their daily lives. This gap between intention and action opens the door for companies to step in and play a key role.

This is where the consumer products sector can make a real impact. As business leaders in this space, we understand the deep connections between what people want and how they spend their money. However, one of the biggest challenges remains: many perceive that living a sustainable lifestyle is inherently more expensive. This perception is particularly strong in developed markets, where concerns about the cost of living are adding further pressure on household finances. For example, in markets like the United States and Europe, people often associate sustainability with premium pricing — a hurdle that complicates the decision-making process for companies.

Yet, sustainability doesn’t always have to come with a hefty price tag. Many individuals are adopting cost-saving behaviors that align with environmental responsibility, whether it’s buying secondhand goods, driving less, or cutting down on meat and dairy consumption. These behaviors present a key insight: the public wants solutions that don’t require them to choose between their wallet and their values. The companies that will succeed are those that find ways to bring these values into alignment.

At the same time, in emerging markets, we see a different narrative. Shoppers in countries experiencing rapid growth tend to believe that a sustainable lifestyle will actually save them money. This frugality-driven approach to sustainability poses both opportunities and challenges for brands. While these behaviors can reduce demand and complicate growth strategies, they also indicate a willingness to adopt sustainability — if companies can offer the right solutions at the right price.

But preferences are rarely uniform. They differ not only by geography but also by demographic factors such as age and values. For instance, younger generations in developed markets are more likely to rely on social media for sustainability information, while older generations tend to trust different sources. These generational divides also influence trust in the types of businesses selling sustainable products. In many markets, smaller, local businesses are perceived as more trustworthy, while in others, like China and Japan, larger corporations enjoy greater confidence from consumers.

This fragmentation underscores a critical point: businesses cannot treat sustainability as a one-size-fits-all concept. The most successful companies will be those that tailor their products and messages to meet specific demands in each market and product category. Whether it's promoting the environmental benefits of a product, its health benefits, or the impact on local communities, companies need to communicate in ways that resonate with different audiences.

Take packaging as an example. Across the board, people are paying more attention to the sustainability of packaging. The growing emphasis on recyclability has placed additional pressure on companies to meet both expectations and regulatory demands. Many companies are already behind in meeting their 2025 recycling targets, but individuals aren’t waiting. They are making decisions today based on whether they perceive a product’s packaging as environmentally friendly. For businesses, the challenge is not only in designing sustainable packaging, but in educating people about why those choices matter.

What does this mean for the consumer products sector? It’s clear that the demand for sustainable solutions is not going away. In fact, it’s evolving, and with that evolution comes complexity. Companies that embrace this complexity, by adapting supply chains, introducing flexible product designs, and leveraging digital tools to target specific segments, will be well-positioned to lead in this new landscape.

At Bain & Company, we often discuss the concept of "smart complexity" — the idea that businesses can find a balance between agility and scale, offering tailored solutions without sacrificing efficiency. The consumer products sector, in particular, has an opportunity to apply this thinking as it innovates to meet the needs of sustainability-conscious shoppers. And the companies that can strike this balance will not only gain a competitive edge, but also build deeper, more lasting connections with their customers.

Ultimately, sustainability is no longer just a corporate responsibility issue — it’s a core part of how people make purchasing decisions. Whether it's the environmental impact of packaging or the transparency of sourcing practices, the public is demanding more from the brands they support. For businesses, the challenge now is to keep up with these shifting expectations and provide solutions that make sustainable living accessible, affordable, and appealing to everyone.