The market
Global retail footwear sales surpassed the historic milestone of $200 billion in 2010 and are projected to reach $238 billion in 2013. Strong demand from emerging markets in Asia and Latin America fueled a compound annual growth rate exceeding 6%. This translates to the marketing and distribution of over 10 billion pairs of athletic and non-athletic footwear in 2010. The total number of shoes sold has increased by 2 billion pairs over the past five years and is expected to reach 12 billion in 2013. While the U.S. market continued to grow at a rate of $1 billion annually between 2004 and 2008 and is projected to reach $48 billion within three years, its share of the global market will have fallen below one-fifth by 2013. The footwear industry is one of the most globalized industries. In North America, 96% of all footwear is produced abroad, with 87% coming from China and the remainder from Vietnam, Indonesia, and Brazil. Women's dress and casual shoes represent the largest product category at 35%, while men's athletic footwear, including sneakers and boots, comes in second at 22%. Men's dress and casual shoes account for approximately 15%, roughly the same volume as women's athletic shoes. Traditional shoe stores maintain control of distribution with more than half of the customers, clothing stores account for only 12% of sales, and sporting goods outlets just 7%. The world's largest footwear company in terms of sales is Nike (over $10 billion), followed by Adidas, Puma, and Asics. Outdoor and eco-friendly footwear manufacturers Geox (Italy) and Ecco Sko (Denmark) have both surpassed $1 billion in sales. The oldest is Bata, originally founded in the Czech Republic in the late 1800s, then moved to Canada in 1940, and finally settled in Lausanne, Switzerland. The company has sold over 12 billion pairs of shoes throughout its history.
Innovation
Due to its extreme globalization and media exposure, consumers are interested in learning about the functional benefits of products (like Geox's claim that its shoes breathe), and they want to understand a company's values. Since there is an oversupply in the market, marketing tied to specific issues creates a positive emotional connection that goes beyond brand fame. Deckers has taken the lead with the Simple Shoes brand, which offers 100% sustainable footwear with material choices ranging from organic cotton and metal-free leather to bamboo fibers and even recycled tires and inner tubes for its soles. In response to the high level of standardization, Zazzle has introduced, among other things, personalized shoes, allowing customers to create unique canvas shoes by uploading their own designs, patterns, illustrations, images, and text, offering a dazzling 42 billion variations. However, while personalization and social and environmental issues are important, the key topic that is often overlooked is health. The health of our feet serves as a barometer for the overall health of our body. Guillem Ferrer, who revolutionized the design and environmental footprint of the Spanish shoe manufacturer Camper, studied in detail the 26 bones, 33 joints, and 150 ligaments that ensure our mobility. Our feet house a complex network of nerves and blood vessels necessary for the approximately 160,000 kilometers that humans travel during their lifetime. Poor blood circulation reduces the supply of oxygen and nutrients to the feet. Guillem studied the importance of freeing feet from rigid, airtight, and waterproof shoes that promote fungal growth and hinder flexibility. A detailed analysis of foot shape, and in particular the deformation caused by fashionable footwear, and the proliferation of fungal diseases led Guillem to envision how footwear could evolve to become protectors of the feet, in a way that prioritizes the health of the feet, the wearer, and the environment. He left Camper and established his own private shoe design studio. A meeting in Bhutan between Guillem and Fritz Vollrath, a professor in the Department of Biology at Oxford University and a silk expert, highlighted a unique opportunity. The silkworm creates a unique cocoon with its saliva that protects the waiting moth. This hard shell, which is then covered with tiny silk threads, has distinct antifungal and antibacterial properties. It is strong and durable. With approximately one million tons available from sericulture, there isn't enough to supply the entire shoe market, but there is more than enough to begin the design process with the assurance that sufficient material is readily available to guarantee market growth. While Fritz envisions developing a vast market in association with athletic shoes known for causing fungal infections, Guillem focuses on redesigning a local business model for shoe manufacturing, in which 95% of the market is local and 5% global. This is one of the fundamental principles of the blue economy: meeting local needs with what you have.
The first cash flow
Guillem is developing the design in cooperation with the Tarayana Foundation, which is dedicated to providing livelihoods for villages. However, producing a sole isn't enough. Guillem's search for an abundant textile that doesn't encroach on land used for food production led him to nettle, one of the nine sacred herbs of ancient cultures. It's an exceptional plant, often considered a weed. It grows easily, requires no fertilizer, can be harvested in the wild, and has already been successfully transformed into fabric. This nettle fiber was already being used in Neolithic settlements in Switzerland before wool or linen. The combination of silk cocoons and nettle fabric will serve as the basis for a systemic shoe design that goes beyond what has been considered viable. Considering Guillem's past creations, we can be confident that his experiments with healthy footwear will also be beautiful. That it will be a competitive offering with a strong social and environmental impact.
The opportunity
Starting a new business with new materials always involves overcoming the obstacles of limited capital and inexperience. Nettle yarn production has been mastered in the past and doesn't require exceptional expertise. Harvested wild nettles can first be stripped of their leaves, which make an excellent soup, and then spun into yarn. Instead of textiles competing with food, this plant provides food and then a strong fiber. The cocoons are a byproduct of sericulture and are given new value by reaching out to farmers who need a better income. Under these conditions, it's not only possible to produce a sustainable product locally, but it's also viable to produce fashionable goods that outperform internationally marketed products in terms of cost, value, and hygiene. This is the approach that is likely to inspire not entrepreneurs who dream of single-handedly replacing Nike or Puma, but those who are willing to nibble away at a small part of their massive market. Since the framework of this business model could be applied worldwide, thousands of people could embark on this venture once Guillem has proven that customers are buying his creation. Since announcing his intention and outlining his initial options, he has generated more interest than he can currently produce, which is a privilege for any entrepreneur.
