Adidas: here’s how sneakers should become sustainable

Sustainability Leather made from mushrooms and a circular economy: This is how Adidas wants to become sustainable

Adidas is experimenting with new materials.

Herzogenaurach The future of Adidas is also in the hands of Paul Smith. In labs at the company’s headquarters in Herzogenaurach, the Canadian developer is shredding sneakers, testing the durability of sneakers made of mushroom mesh instead of leather, and experimenting with T-shirts made of wood fibers. "Some of what we’re doing here we’ll see in the market in a few months, some of it may take years to catch on," Smith said.

It’s not technological gimmicks. The call for sustainability has become an existential challenge for sporting goods manufacturers. While it used to be all about the fastest shoes, the fanciest brands and the most famous stars, a whole new competition is now underway.

"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 recently took over as head of marketing for the outdoor division Adidas Terrex.

Climate change is a key issue for these 11- to 26-year-olds, he says. For more than 90 percent, sustainability is a decisive purchase criterion, and one in ten could 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 of Deloitte’s Sport Business group also says: "We observe in the market that the pressure to act comes primarily from consumers." According to the study, 57 percent of customers in Europe are also willing to pay a premium for sustainable products.

While quality and functionality are currently still more important to many customers when making purchasing decisions. But sustainability is no longer an option.

And so Adidas CEO Kasper Rorsted has promised in his new mid-term strategy, "Own the Game," that by 2025 nine out of ten items should be made from sustainable materials. Currently 60 percent.

Smaller rival Puma also wants to create a 90 percent share by 2025. "I want to integrate environmental and social sustainability into all our production, from the sourcing of raw materials to the manufacturing of our products," said CEO Bjorn Gulden.

Ex-Adidas executive Eric Liedtke, who pushed the issue enormously during his time at Adidas, even wants to go completely plastic-free with his new streetwear label Unless.

To fulfill its promises, Adidas relies on a three-pillar strategy.

1. New materials

The most exciting field for customers is new materials. These are mainly to replace oil-based plastic. But the group is also looking, for example, for textiles that consume less water than cotton.

"It’s not just about the plastic issue," says Adidas strategist Hoffmann. The carbon footprint of a manufacturing process needs to be taken into account nowadays, as well as other ESG (environmental social governance) criteria.

Because, in contrast to earlier times, it’s not just about spectacular showcases that are produced in small quantities and then disappear into the archives again, cost-effectiveness also plays a key role.

"The new technologies have to be scalable," says Hoffmann. They must therefore be suitable for mass production and, in the long term, preferably no more expensive than conventional processes. "The shoe has to be as good and as competitively priced as a non-sustainably produced product," Adidas CEO Kasper Rorsted told Handelsblatt newspaper. In the meantime, he says, the sustainable products are "almost, but only almost as profitable".

For a particularly innovative approach to new materials, Adidas has picked one of its most iconic models: the Stan Smith, one of the most successful models in the company’s history.

Developer Smith has in his lab one of the first examples of the Stan Smith Mylo. The sneaker is made of a natural and renewable leather substitute made from mushroom mycelium, developed together with biotech start-up Bolt Threads.

Mycelia serve as the basis for climate-friendly sneakers for the sporting goods manufacturer.

Mycelium is an interconnected spore network that grows in the soil. The fruits are mushrooms. Adidas now produces the material Mylo from such mycelia. The sports nets are grown in a vertical farming process. Harvesting is possible after less than two weeks.

It’s still a long way to payability and scalability, but Mylo shoes could go into mass production around 2024. "The performance has to be the same as classic materials – or better," Smith says. "If this succeeds, the commercial scaling of the goal is."

The start-up Amsilk, which produces synthetic spider silk, is going in a similar direction. To obtain the artificial spider silk, coliform bacteria are genetically manipulated to produce the protein in large steel tanks. Adidas already produced a sneaker based on the technology.

In its search for the materials of the future, Adidas is working with many start-ups. There are so many approaches and technologies, says strategist Hoffmann, you can’t develop everything yourself. "We will not be able to meet the challenge alone."

Startups are also often faster than established corporations, he said. But Adidas also had a lot to offer startups, he said – access to professional testing labs and later to the market, for example.

This is how Adidas became a strategic investor in the IPO of Finnish start-up Spinnova last year. The two companies had previously collaborated on the development of textile fibers made from wood, for example. Similar collaborations exist with startups such as Infinited Fiber Company and Pond.

2. Recycling

Along with new materials, recycling will play a central role in the sporting goods industry’s sustainability promises. "As long as there is so much plastic waste on earth, it may be more ecological to recycle it instead of producing new materials," Hoffmann says.

When Adidas unveiled its running shoe x Parley made from recycled plastic waste from beaches and coastal regions in New York in 2015, it was still seen primarily as an image campaign. But last year alone, Adidas produced 17 million pairs of shoes using ocean plastic, and since its launch, that number has risen to 30 million pairs.

Across its product range, Adidas used around 50 percent recycled polyester in 2019. In 2020, it was 71 percent. From 2024, the goal is 100 percent.

Most of the plastic here doesn’t come from the ocean, but from bottle return machines, for example. "The biggest challenge is building the infrastructure," says Hoffmann.

Puma has also set out to use only recycled polyester by 2025 in its 10for25 sustainability strategy. Currently, Adidas’ smaller competitor is also at about 70 percent.

The jackets in Puma’s First Mile collection are each made from 12 to 15 recycled water bottles. On average, textiles currently use about 95 percent recycled plastic and shoes 50 percent recycled plastic.

3. Circular economy

But recycling is only the beginning. "The next step is the circular economy," says Hoffmann. Under the "Made to be remade" label, Adidas is developing products that are designed with recycling in mind.

Because classic sneakers have been difficult to recycle up to now due to their material mix. The "Made to be remade" shoes, on the other hand, are made of only one material, for example.

This is how Adidas launched the Ultraboost running shoe just under a year ago. A QR code is attached to a flap. When customers discard the shoe, they can scan it and send the product back. In return, for example, there is a voucher for the next purchase. The shoes are then shredded and the material is used to make the successor models.

In the past, Deutsche Umwelthilfe (German Environmental Aid) had criticized Adidas and Co. have not introduced a deposit system for their shoes. Now manufacturers are taking the first steps in this direction.

In the future, recycling should already be considered in the design process.

Adidas plans to sell one million "Made to be remade" products in the coming year. It is difficult to estimate how many of these will actually be returned to the cycle at a later date. "Currently, the return rates are ten to 20 percent," says Hoffmann. This score is not yet particularly meaningful. First-time buyers are likely to be particularly environmentally conscious; in turn, most models are likely to still be in use. Puma has also started the circular economy with Re-Suede.

But shredding is only a sustainable solution if old products are destroyed at the end of their life cycle. Last year, research by "Die Zeit" and NDR showed that new goods were also systematically destroyed at Nike, for example when they were returned.

This is not the only reason why sporting goods manufacturers have to provide transparent evidence of their sustainability activities. Because they are still suspected of greenwashing – that is, of giving themselves a green makeover above all else.

"Only 30 percent of European consumers say they fully trust the claims made by manufacturers of sports and outdoor goods about the sustainability of their products," says Deloitte senior manager Mutter. There is therefore currently a need for manufacturers to take action, especially in communicating their sustainability efforts.

And the issue is also becoming increasingly important in the struggle to win the favor of investors. In 2020, Adidas was dropped from the Dow Jones Sustainability Index after 20 years, as was its competitor Nike. Although the group maintained its score and is ahead of the other sporting goods companies, companies from other industries made greater progress.

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