Case Study: Adidas and Allbirds’ Sustainable Product Launch
Consumers are going green, which means companies need to make some changes if they want to keep making sales. Companies have been focused on increasing the sustainability of their businesses but there is still a gap in the market for innovated sustainable products. Adidas and Allbirds have decided to fill that economic gap. Both companies recently announced that their upcoming partnership will involve them creating the first shoe with a zero-carbon footprint. This is a smart move for both brands, but bad news for competing sneaker companies.
So how do other brands compete? There are lots of companies who have already started sustainability partnerships, but what about sustainable partnerships, and what is the difference between the two? In this blog, Hollywood Branded discusses the differences between creating a sustainable brand versus a sustainability plan, and which one brands should take advantage of right now.
Sustainable vs Sustainability: What’s the Difference?
Eco-friendly partnerships are nothing new, but they are growing in popularity. An eco-friendly partnership is one between two businesses in which they work together to create a sustainable product or make their companies eco-friendlier by doing things like lowering emissions in factories. eco-friendly brand partnerships began after the Modern Environmental Movement, in the 1960’s and 1970’s, which increased the number of individual brands that started to “go green.” The idea of “sustainable development” for businesses was introduced at the Brundtland Commission in 1987.
Within eco-friendly partnerships there are two categories:
- Sustainable brand creation
- Sustainability as a brand
There is a big difference between the two. Sustainable brand creations are aimed towards developing and building out an ongoing product available for consumers to purchase. Sustainable brand creations also help alter the market by offering new eco-friendly products that change consumer’s lifestyles and their practices.
A sustainability practice however is aimed at increasing how “green” a company is. Sustainability helps a company look internally to make changes. This could range from improving their productivity to conserving energy, supplies, and money in a greener way.
Both are beneficial in different ways. They are both required to create a healthy planet and healthy market, but they aren’t equal in power. As environment policies continued to change over the past few decades, companies tried to accommodate them, but often only to change their operations. Few companies went as far as to alter the very products they were selling in order to benefit the environment.
Walmart is one of the biggest companies in America that has a sustainability partnership with The Sustainability Consortium, a third-party company that “builds science-based decision tools and solutions that address sustainability issues that are materially important throughout a product’s supply chain and life cycle” according to their website.
This is all well and good for the purposes of innovating the way large companies operate but does little to create new sustainable products. It creates a problem when considering the waste created by non-green products when they become useless to a consumer.
Increasing your company’s sustainability means nothing if your product itself is not sustainable. This means there is a gap in the market for well-known popular brands to be selling new or innovated sustainable products.
Filling this gap could be the key to economic success and environmental relief in the US market.
The Benefits of Sustainable Partnerships
So why should a company consider going green right now? As political awareness of our planet’s worsening environment increases, consumers are starting to do more research on brands that are working to save the environment. They are getting smarter and working to become more responsible with their purchases. Studies show that 71% of consumers research and choose green products over others, and this percentage continues to increase.
Going green has shown several benefits to the market and directly to brands. Studies have shown that making your company more sustainable has financial benefits. Changing your company’s operations can save budget money, boost tax revenues, reduce long-term liabilities, and improve your company’s financial stability overall. In an Economic Policy Institute article, The Bureau of Labor Statistics reported findings that suggest “Greener industries grow faster than the overall economy.”
Studies have also shown that when a company does not work to improve the environment, there is a negative effect on the economy. The Gross Domestic Product, or the value of global economic activity, was often reduced 10-15% more than if the company worked to be sustainable. This shows that focusing on sustainable products or practices not only benefits your company, but it benefits the global market. Improving the quality of the market with sustainable development helps companies worldwide.
Sustainable Partnerships That Have Changed the Market
There are many existing brands who are changing the market by selling original sustainable products. Celise Bio Products is a company that has worked to create new packing alternatives to common plastic products, specifically - straws.
In 2018, this company was created by young entrepreneur Cameron Ross. He grew his business by filling a gap in the market for a straw that wouldn’t kill sea turtles, but also wouldn’t dissolve in your drink like paper. He partnered with big food companies and restaurant chains, like Compass Coffee and Sysco, to help them offer customers a non-plastic straw that is compostable.
Despite the low number of brands shifting to sustainable products, there are still some big names that have worked to innovate current popular products.
LEGO, the popular children’s toy brand, partnered with Brazilian sugarcane farms to create sustainable building pieces made of 98% polyethylene. The company announced this change in 2018 and hope to have all their products shifted to sugarcane by 2030. This is a commendable change for a company whose manufacturing was previously causing a lot of waste. Although, their pieces still will not be biodegradable, but they are recyclable.
Another company that made a big change back in 2015 was Coca Cola. Like LEGO, Coca Cola used Brazilian sugarcane farms to create a completely plant-based bottle for their soft drink. 10 years later, Coca Cola is still making changes. Just last year the company announced that they were further innovating their bio-plastics to make them more accessible to be used across the globe, in the beverage industry and outside of it.
Both brands are pioneering change in their respective industries, but nothing compares to the change that is happening in the fashion industry today.
Sustainable Fashion and the Sneaker Industry
In today’s market, the fashion industry gets the most sustainable product attention. There has been a recent push by consumers for sustainable fashion to be implemented worldwide.
According to a study on Fashion retail by Nosto, people between the ages of 18 and 24 say they want the fashion industry to become more sustainable. Something that is a polar opposite to the amount of excessive wardrobe from burgeoning fast fashion that has been popular in recent years.
Additionally, 50% of those consumers say they would be more likely to buy clothes from companies they know are committed to sustainability. Clothing brands like Levi’s, H&M, and Patagonia are some of the big fashion brands that are constantly working to reuse fabrics and use recyclable materials in their clothing.
In the footwear section of the fashion industry, the biggest name in sustainability is Allbirds. Founded in 2014 by former soccer player, Tim Brown, and engineer, Joey Zwillinger, the New Zealand brand has grown internationally and offers an attractive Eco-friendly shoe to a wide range of consumers. Considering the size of the shoe industry and the international “hype” that some brands carry, Allbirds put themselves in a strategic position to be offering something new to sneaker fans.
The Sneaker Industry has evolved significantly since the 1990’s and now offers fashionable street-wear shoes. Sneakers used to be about athletic performance, and brands were often associated with specific sports teams. Nowadays, sneakers are being partnered with and designed by celebrities from all industries. From Kanye West’s Yeezys to DJ Kahled’s Air Jordans, sneakers have become a status symbol. Nike and their collaboration with Michael Jordan caused a shift in the sneaker industry in 1985 from athletic footwear to casual footwear.
In fact, check out this blog our team wrote to learn more: The Power of Artist Collaboration With Sneaker Brands
After that, the industry continued to grow and evolve as more and more shoe companies wanted to get in on the action. Today, the sneaker re-sale industry is worth multi-billions of dollars and could be worth over $6 Billion by 2025. These numbers have sky rocketed due to “sneaker hype” and buyer craze to purchase the next high-value shoe for resale. Everyone wants a slice of that $6 Billion dollars, which is why re-sale prices of sneakers can be double, sometimes triple, the retail price. But this isn’t necessarily good for the economy, and certainly isn’t good for the environment.
As shoe hype grows with multiple high-value sneakers being released every year, so does the waste of those products. There is a waste problem in the sneaker industry. Over 300 Million shoes are thrown out every year, taking approximately 30-40 years for those shoes to decompose in a landfill.
An article in Business Insider stated; “With more people buying more and more sneakers — and thus, producing more waste — creating products with sustainability in mind is also becoming a larger consideration among the biggest players in the sector.”
The push from shoe companies, like Allbirds, to use more sustainable materials could be a model that more competitors will adopt in the near future, especially with their upcoming Adidas partnership gaining industry attention.
Adidas and Allbirds: The Partnership
On May 28th, one of the biggest shoe giants, Adidas, took to Twitter to announce their upcoming partnership with Allbirds. Although neither company discussed any details on what their collaborative shoe will look like, fans were excited at the statement Allbirds made; “We've been dreaming about a shoe actually... One that doesn't have a carbon footprint. The thing is, it's never been done.”
The shoe brands will offer their customers an Eco-friendly alternative to footwear and give them the opportunity to own a product with zero-carbon footprint. Why is this partnership so amazing? For starters, as pointed out by Allbirds, it has never been done before. For two largely popular footwear brands to focus on sustainability and eco-friendly practices is huge.
They will be paving the way for their competitors to join the movement and decrease the sneaker industry’s effect on carbon emissions forever. The Vice President of Brand Strategy for Adidas, James Carnes, told an interviewer; “The recent progress that our brands have made in the name of sustainable innovation has created the perfect momentum for this partnership to influence industry practices forever.”
Why Your Brand Should Consider A Sustainable Partnership Initiative
Despite the consistent rise of environmentally conscious consumers, there are few companies starting sustainable brand launches. This means taking advantage of a sustainable brand build could put you ahead of competitors and help your company grow faster. In addition to bettering the market in general, sustainable brand development and partnerships can be extremely beneficial to brand marketers for several reasons.
One of the biggest, according to Common Objective, is that; “Sustainable brand partnerships increase the pool of conscious consumers - growing the sustainable market for all.”
Going green can also help you attract investors, increase profitability, and tap into new markets to benefit your company in the future according to the World Economic Forum. Statistics pooled from a Cone Communications study suggest that 9 out of 10 consumers consider environmental impact when making a purchase. Additionally, studies show that 1 in 2 consumers are willing to pay more for products and services from eco-friendly companies according to an article in Forbes.
The numbers don’t lie, but you can’t measure the success of a partnership that doesn’t exist. So, take Adidas and Allbirds’ partnership as a model for your brand to follow. Generation Z, the conscious buyers, will make up 40% of the market by the end of this year. As the economy and consumer’s mindsets continue to evolve, you need to evolve your business strategy.
Paying attention to your consumer’s habits, innovating your products and operations, and continuing to work to make your brand more eco-conscious are important steps in improving your company’s longevity. However, starting a sustainable relationship with another brand and working to create a new or innovated sustainable product is the smartest way to get ahead of the game in our ever changing market.
The Power Of Partnerships
Whether launching a new product line, or looking to partner with a 3rd party to broaden marketing messaging, there are options for every brand, of every size.
Here are a few blogs that may help you better understand partnership marketing.
- Political Strategy In Brand Marketing
- The Power of Artist Collaboration With Sneaker Brands
- Celebrity Endorsement Misconceptions: Budget Limitations
- Ensure Success With Your Celebrity Endorsement
- Case Study: The Strategic Use of Controversial Celebrity Endorsement
- 4 Do's And Don'ts Of A Marketing To Gen Z
Interested in hearing about more brands discussing partnerships and what makes them work? Then check out our agency's podcast series, Marketing Mistakes (And How To Avoid Them) and listen to our agency founder Stacy Jones and a wide variety of guests.