Herzogenaurach The future of Adidas also lies in the hands of Paul Smith. In the laboratories at the company headquarters in Herzogenaurach, the Canadian developer shreds sneakers, tests the durability of sneakers made of mushroom netting instead of leather and experiments with T-shirts made of wood fibers. “Some of what we’re doing here we’ll see on the market in a few months, others may take years to catch on,” says Smith.
They are not technological gimmicks. The call for sustainability has become an existential challenge for sporting goods manufacturers. While it used to be just about the fastest shoes, the chicest brands and the most famous stars, there is now a whole new competition.
“Our main customer belongs to Generation Z,” says Marwin Hoffmann. He has played a key role in developing Adidas’ sustainability strategy in recent years and has recently been in charge of marketing for the outdoor division Adidas Terrex.
Climate change is a key issue for these 11 to 26 year olds. For more than 90 percent, sustainability is a decisive purchase criterion, and one in ten can be described as an activist. “They are extremely well informed, you can’t fool them.” One of the most searched words on Adidas’ online pages is “vegan”.
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Felix Mutter from Deloitte’s Sport Business Group also says: “We are observing in the market that the pressure to act is primarily coming from consumers.” According to the study, 57 percent of customers in Europe are also willing to pay a surcharge for sustainable products.
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It is true that quality and functionality are currently even more important for many customers when making a purchase decision. But it is no longer possible without sustainability.
And so Adidas boss Kasper Rorsted promised in his new medium-term strategy “Own the Game” that by 2025 nine out of ten articles should be made of sustainable materials. It is currently 60 percent.
The smaller rival Puma also wants to achieve a share of 90 percent by 2025. “I want to integrate environmental and social sustainability into all of our production, from the sourcing of raw materials to the manufacture of our products,” said CEO Björn Gulden.
Ex-Adidas CEO Eric Liedtke, who pushed the issue enormously during his time at Adidas, even wants to do completely without plastic with his new streetwear label Unless.
In order to fulfill the promises, Adidas relies on a three-pillar strategy.
1. New materials
The most exciting field for customers is new materials. These should primarily replace the oil-based plastic. The group is also looking, for example, for textiles that use less water than cotton.
“It’s not just about the topic of plastic,” says Adidas strategist Hoffmann. Nowadays, the carbon footprint of a manufacturing process has to be taken into account just like other ESG (environmental social governance) criteria.
Because, unlike in the past, it’s not just about spectacular showcases that are produced in small numbers and then disappear back into the archives, cost-effectiveness also plays a central role.
“The new technologies must be scalable,” says Hoffmann. They must therefore be suitable for mass production and, if possible, not more expensive than conventional processes in the long term. “The shoe has to be just as good and price-competitive as a non-sustainably produced product,” said Adidas boss Kasper Rorsted to the Handelsblatt. In the meantime, the sustainable products are “almost, but only almost as profitable”.
For a particularly innovative approach to new materials, Adidas has chosen one of its most iconic models: the Stan Smith, one of the most successful models in the company’s history.
Developer Smith has one of the first examples of the Stan Smith Mylo in his lab. The sneaker consists of a natural and renewable leather substitute made from mushroom mycelium, which was developed together with the biotech start-up Bolt Threads.
The sporting goods manufacturer uses mycelia as the basis for climate-friendly sneakers.
Mycelium is a connected spore web that grows in the soil. The fruits are mushrooms. Adidas now produces the material Mylo from such mycelia. The spore webs are grown using a vertical farming method. It can be harvested after less than two weeks.
There is still a long way to go towards affordability and scalability, but the Mylo shoes could go into series production around 2024. “The performance has to be the same as classic materials – or better,” says Smith. “If successful, commercial scaling is the goal.”
The start-up Amsilk, which produces synthetic spider silk, is going in a similar direction. When the artificial spider silk is obtained, E. coli bacteria are genetically manipulated in such a way that they produce the protein in large steel tanks. Adidas already produced a sneaker based on this technology.
In the search for the materials of the future, Adidas works with many start-ups. There are so many approaches and technologies, says strategist Hoffmann, that you can’t develop everything yourself. “We will not be able to face the challenge alone.”
Start-ups are also often faster than established corporations. But Adidas also has a lot to offer the start-ups – access to the professional test laboratories and later to the market, for example.
Adidas, for example, became a strategic investor in the IPO of the Finnish start-up Spinnova last year. The two companies had previously worked together on the development of textile fibers made from wood, for example. Similar collaborations exist with start-ups such as Infinited Fiber Company and Pond.
2. Recycling
In addition to new materials, recycling will play a central role in the sustainability promises of the sporting goods industry. “As long as there is so much plastic waste on earth, it can be more ecological to recycle it than to produce new materials,” says Hoffmann.
When Adidas presented the running shoe x Parley made from recycled plastic waste from beaches and coastal regions in New York in 2015, it was primarily an image campaign. But in the past year alone, Adidas has produced 17 million pairs of shoes with ocean plastic, and since the start it has even been 30 million pairs.
In 2019, Adidas used around 50 percent recycled polyester across its entire product range. In 2020 it was 71 percent. From 2024 it should be 100 percent.
The majority of the plastic does not come from the sea, but from the bottle return machines, for example. “The biggest challenge is building the infrastructure,” says Hoffmann.
In its 10for25 sustainability strategy, Puma has also set itself the goal of only using recycled polyester by 2025. The smaller competitor from Adidas is currently also at around 70 percent.
Each jacket in Puma’s First Mile collection is made from 12 to 15 recycled water bottles. An average of around 95 percent recycled plastic is currently used for textiles and 50 percent for shoes.
3. Circular Economy
But recycling is just the beginning. “The next step is the circular economy,” says Hoffmann. Under the “Made to be remade” label, Adidas develops products that take future recycling into account right from the design stage.
Because classic sneakers have so far been difficult to recycle because of the mix of materials. The “made to be remade” shoes, on the other hand, are made from just one material, for example.
Almost a year ago, Adidas launched the Ultraboost running shoe. A QR code is attached to a flap. When customers discard the shoe, they can scan it and send the product back. In return, there is a voucher for the next purchase, for example. The shoes are then shredded and the subsequent models are made with the material.
In the past, Deutsche Umwelthilfe had criticized the fact that Adidas and Co. had not introduced a deposit system for their shoes. Manufacturers are now taking the first steps in this direction.
In the future, recycling should already be considered in the design.
In the coming year, Adidas wants to sell one million “made to be remade” products. It is difficult to estimate how many of these will actually return to the cycle at a later date. “Currently, the return rate is ten to 20 percent,” says Hoffmann. This value is not yet particularly meaningful. The first-time buyers are likely to be particularly environmentally conscious, but in return most models are likely to still be in use. Puma has also started the circular economy with Re-Suede.
However, shredding is only a sustainable solution if old products are destroyed at the end of their life cycle. Last year, research by “Zeit” and NDR showed that Nike was also said to have systematically destroyed new goods that, for example, were returned as returns.
This is not the only reason why sporting goods manufacturers have to document their sustainability activities transparently. Because they are still suspected of greenwashing – that is, of giving themselves a green coat of paint.
“Only 30 percent of European consumers state that they have complete trust in the statements made by manufacturers of sports and outdoor items about the sustainability of their products,” says Deloitte Senior Manager Mutter. There is therefore currently a need for action for manufacturers, especially when it comes to communicating their sustainability efforts.
And the topic is also becoming increasingly important in the struggle to attract investors. In 2020, like its competitor Nike, Adidas fell from the Dow Jones Sustainability Index after 20 years. While the group maintained its score and is ahead of other sporting goods companies, companies in other industries made greater progress.
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