Nike faces some some uncertainty, but it is a business well positioned for a post-pandemic bounce. Boosted by strong sales growth in China the company’s revenue grew to $40 billion in 2019. Footwear accounts for more than half of the brand’s revenue.
Nike’s leading position for sales is not matched by sustainability. Progress is being made but the business is ranked behind rival Adidas on the Fashion Transparency Index and by its own admission it has not increased the sustainability of its footwear materials in the 4 last years.
Nike does have the ambition to catch up and this is evident in the new ‘Space Hippie Sneaker‘ which is made from a 100% recycled yarn that includes their own production scraps and a base made from a mixture of Nike foam materials. It sets a new standard for Nike and reduces factory production waste. As you would expect the brand hasn’t hesitated in boldly presenting and promoting their “trash transformed” breakthrough.
There is however a difference between this eye-catching initiative and embedding leading sustainability across a product range and throughout a supply chain. In this respect Nike has a pace-maker in the French premium sneaker brand Veja which sells about 2 million pairs annually. Having emerged as the sneaker of choice for the likes of Meghan Markle, Emma Watson, Reese Witherspoon and other high profile influentials Nike has realised there is a race on.
Veja works directly with small producers in Brazil and Peru to produce a selection of eco-friendly trainer styles. It has also recently added a new “post-petroleum” running shoe made from 62 percent natural and recycled material that includes recycled polyester, plastic bottles and rice waste.
But where Veja have really pushed the pace is in the transparency of their sourcing and manufacturing. The company website explains each step of the production process with contracts or accreditations available to download and scrutinise. This goes further in a ‘limits’ section which explains the reason for any compromises on their sustainability goals. Of course, working closely with a small number of producers is easier than addressing a complex global supply chain. Nonetheless, Veja’s website represents a benchmark for consumer transparency for Nike and other established brands.
Veja transparency involves explaining the limits of the materials and process. Decisions on sourcing, banking partners and governance are documented.
Veja’s position as a pacemaker for Nike is no accident. Founders Sebastien Kopp and François-Ghislain Morillion identified Nike’s advertising investment as a significant chunk of their sneaker costs that could be redirected to more expensive sustainable materials. Nike’s business model and sustainability shortfall was an invite to Veja to join the race.
To emerge as a leader in sustainability Nike needs to look at Veja’s approach closely. I recommend you have a look too – you can visit the Veja website with this link: Veja Project.