Tim Brown, a former professional soccer player from New Zealand, came up with the idea for an eco-friendly, minimalist shoe brand after years of being barraged with freebie sneakers he deemed wasteful and garish. Brown’s Allbirds are made from ethically farmed sheep wool, plus a foam sole made from sugarcane. They look like Airpods reincarnated as shoes.
Over the last six years, Allbirds, co-founded by Brown and biotech engineer Joey Zwillinger, has propagated faster than New Zealand sheep, which outnumber humans in the country 6 to 1. The company’s understated sneakers started out as a Wall Street and Silicon Valley trend that made Oxfords look like your grandpa’s dress shoes. After gaining a reputation as “the most comfortable sneaker in the world” (TIME Magazine), the shoes quickly stepped into the mainstream.
Today, Allbirds exceed one type of consumer. As New Yorker describes: “Mila Kunis wears Allbirds. So does Jennifer Garner. So do Park Slope dads and modern dancers and trendy teenagers and kooky aunts and registered nurses and bartenders and pretty much every overworked, weary thirty something you see on the New York subway.”
Allbirds sold its millionth pair just two years after launching in 2016, simultaneously hitting unicorn status. Most recently, the company was valued at $1.7 billion and has raised $200 million total, after landing an additional $100 million in funding in September. Despite the pandemic’s retail trends, investors clearly see comfy lifestyle shoes as a good bet, especially after the Allbirds e-commerce app was downloaded 17,000 times within 24 hours of launching in September
The brand’s next step to world domination: closet staples. Last week, Allbirds launched its first clothing line — a set of T-shirts made from discarded crab shells, wool sweaters and eucalyptus-filled puffer jackets as aggressively understated as the brand’s signature time. The most comfortable and sustainable T-shirts in the world? It remains to be seen.
From Kickstarter to $1.7 billion in six years
Brown retired from soccer in 2012 and mulled his sustainable, brandless sneaker idea while getting a degree from the London School of Economics. A year later, he went for it. A $200,000 grant from a wool industry group let him enlist agricultural technology institute AgResearch to develop a woolen sneaker. The inspiration for a raw material came, Brown says, from his childhood spent wearing sweaters and socks knitted by his grandma from local wool, legendary for its odor-repellent, moisture-wicking qualities. The end result: a patent for a washable, sturdy and non-itchy wool sneaker fabric of the same superfine wool threads used for Gucci and Tom Brown suits.
“The Wool Runners” hit Kickstarter in 2014. The shoes were touted more for their sockless design and unique material than their eco-friendliness but people were immediately intrigued. Brown beat his $30,000 goal in four days and ended up raising $120,000 and selling out all the material he’d made, enough for 1,064 pairs of shoes.
One of those investors was Zwilinger, who came on to help Brown scale up and went on to be Allbirds co-founder and co-CEO. Allbirds was officially established in 2015 as a direct-to-consumer brand, jumping on the bandwagon with Warby Parker and Everlane. (They found it flattering: two Warby Parker founders are Allbirds investors).
Allbirds launched with a single shoe, the Wool Runners, on March 1, 2016. The same day, it announced its first fundraising round, scoring around $10 million within a few months. Since then, Allbirds has racked up a current total of $200 million in funding. Their $1.4 billion valuation in 2018 rose to $1.7 billion this year. By comparison, the New Yorker notes, Warby Parker took eight years to hit its current valuation of around $1.75 billion.
Allbirds has expanded rapidly by nearly all metrics. Over the last four years, the brand’s gone from a single style to a dozen, a handful of employees to 340, and zero stores around the world to 21.
Unlike other start-ups, Allbirds was profitable in its very first year according to an Axios, within two years, racking up $100 million in sales, with help from partnerships with Adidas, Outdoor Voices, Nordstrom, Shake Shack and Air New Zealand. The company stayed that way until the pandemic forced store closures, cutting into sales. Getting back into the black is a priority, Brown tells Wall Street Journal. In addition to Allbirds clothing debut, the brand recently launched its first designated running sneaker, hoping to take advantage of the e-commerce and home exercise booms.
A 21st century uniform for the elite and ambitious
Compared to hypebeast hauls, Allbirds are dirt cheap at $95. But they’ve become a status symbol in their own right. Especially in Silicon Valley and on Wall Street, the sneakers read simultaneously as youthful and utilitarian, a signal of being successful and in the know, while also signaling progressive political commitments.
The shoes’ design as well as their back-story especially embodies tech’s love for futuristic utilitarianism, which dates back to Steve Jobs’ black turtleneck. “Allbirds might be the closest the world of everyday fashion has come to embracing this ideal of optimized efficiency,” writes the New Yorker. Brown puts it like this: “I think [Silicon Valley] is a group that are naturally attracted to the idea of innovation and of doing things differently in old-fashioned categories, which I think in many ways is what Allbirds stands for.”
The sneakers’ rise has spurred on the broader reinvention of office wear over the last decade that has helped bankrupt Brooks Brothers and J Crew. Unfortunately for such brands, CEOs now wear hoodies and Allbirds instead of Italian suits and leather wing-tips, and brag about their carbon-neutral cars and wardrobes, instead of Jaguars and private tailors. Given the low price point, Allbirds profits off its aspirational accessibility as people hope to cash in on the changing look of success.
How sustainable can a shoe brand be?
The fashion industry produces between 8-10% of the world’s carbon emissions. Yet, in spite of all the panels and runway shows on the topic, the industry mostly has yet to accept just how much needs to change.
Allbirds has set the standard for sustainable footwear as a certified carbon neutral business. The company has achieved this by measuring all emissions, reducing those numbers as much as possible, and then imposing a carbon tax to offset unavoidable emissions by purchasing credits from third-party verified emissions reduction projects. Currently, every Allbirds item is labelled with a number indicating how much CO2 was produced to make it: 7.6 kilograms for a sneaker, 6.3 kilograms for a T-shirt and 26.3 kilograms for a sweater, although transportation isn’t factored in according to Vogue Business.
Environmentally, the company leaves few gaps in its supply chain. The company’s wool is ZQ-certified by the New Zealand Merino Wool company, meaning it’s farmed sustainably as far as land use and animal care. The brand first came up with a replacement for the petroleum-based synthetic used for the soles of most of the 20 billion pairs of sneakers produced every year, made of sugarcane, called SweetFoam in 2018. Allbirds rolled with a pair of flip-flops but has since incorporated it into all shoes. The brand’s insoles are made of natural castor beans in place of polyurethane.
Allbirds is also one of a new movement of corporations certified as B-Corps, or companies that commit to treating people and the environment as stakeholders rather than exclusively pursuing profit — and being evaluated annually on this criteria by the non-profit B Corp. (Other B-Corps include Patagonia, Athleta, Uncommon Goods and Eileen Fisher). Allbirds has gained a reputation for generosity in addition to environmental commitments. The brand’s Facebook chatter spiked on March 25, the day the company donated $500,000 worth of free sneakers to healthcare workers.
However, some critics of the industry have begun to ask if material innovations are enough. Tasmin Lejeune, founder of Ethical Fashion Forum, says that Allbirds’ “singular focus on environmental sustainability is a missed opportunity,” and suggests where the industry really needs leadership is changing the standard for labor practices. Allbirds uses third-party like WRAP and SMETA certifications to audit factories, but are significantly less transparent with consumers about by whom and where products are made.
Some in the industry see consignment, repair and rental platforms as the most important trends in sustainability. A Vogue review of the Allbirds new clothing line asks: “Does the world need another T-shirt?” Allbirds has begun to get on board, and has begun partnerships with NGO Soles4Souls and online consignment store ThredUp to donate and sell lightly used footwear. However, at some point it begs the question: is the most sustainable move in fashion to start a sustainable brand or... not start a new brand at all?
Copycats welcome...except for Amazon
Even if the industry conversation is moving past eco-friendly, Allbirds has helped inspire an arms race around them in footwear. Since it was founded, a slew of brands with familiar talking points — sockless, super-comfortable, eco-friendly — have cropped up. Rothy’s sells flats, sneakers and booties out of recycled water bottles. Bendy offers a leather “cross between an espadrille and a huarache” with 4.5 pounds of greenhouse emissions per sneaker compared to the average of 30 pounds.
In the brand’s biggest controversy to date, Amazon’s in-house shoe brand, 206 Collective, launched the “The Galen,” a grey wool-blend sneaker, nearly identical to Allbirds flagship shoe the Wool Runner. However, Amazon’s version sells for $45 compared to Allbirds’ $95. Allbirds believes Amazon has “algorithmically” copied their design. In the past, Amazon has gotten away with copying the most successful products on their platform and then producing identical products in-house brands that the company can sell at a cheaper price.
While Allbirds is not thrilled to become a victim to this practice, what the start-up really takes issue with is that the e-commerce giant chose not to cop the eco-friendly materials as well.
“Given what I know about manufacturing, there is no way you can sell a shoe for that low while taking care of all of the environmental and animal welfare considerations and compliance we take into account,” Zwillinger told Fast Company, later adding “if other brands knock off our sustainable practices, we welcome it. If brands use our sustainable techniques to drive consumer adoption, that’s a win for everybody; it just puts the burden on us to continue to innovate even more.”
Allbirds doesn’t plan on getting dragged into a legal battle with Amazon, but the company is taking the opportunity to publicly shame the Big Tech giant. In an open letter published on Medium titled “Dear Mr. Bezos,” Zwillinger offered to send him samples of their SweetFoam sole or put them in touch with their production partners.
In 2019, Amazon committed to go carbon-neutral by 2040 and purchase 100,000 electric delivery vans. As the world’s largest retailer, many including Amazon employees, feel this isn’t enough. Given its resources, it would be easy, Zwilinger says, for Amazon to switch the design for its “Galen” shoe as well as it’s entire supply chain to carbon-neutral practices. He adds: “Amazon should be taking the lead on this.”
With holiday shopping in full swing, time will tell if Amazon’s clone or a dose of skepticism from fashion critics can shake Allbirds’ dominance.
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