VEJA: Stop Pub!
13.11.2023Azul Stengel, Co-founder of LienzoPhoto by Pawel CzerwinskiEmbedded Files
Pas de pub, pas de probléme!
No ads, this controversial statement sums up the brilliant tactic that VEJA has taken in developing an alternative business model. In today’s world, marketing, and communication are the pillars for most brands to develop their business, reach out to consumers and build communities in the hope of lifting their sales. However, VEJA presents a refreshing point of view: rather than spending money on advertising, they spend it on developing environmentally and socially responsible products.
In this case study, we will deep dive into the business model that VEJA has adopted to provide quality products, implement sustainable practices and keep the prices accessible to consumers. While this trifecta seems almost impossible to come by elsewhere, VEJA has managed to do so at a great scale, and is placed in France and the world amongst the most popular brands for sneakers (1) (2). How do they do this?
VEJA approaches production and sustainability from a holistic perspective - all departments across the company must be involved for it to work. In this case, the marketing departments spend no budget on advertising as their engagement is to create a wonderful product above all else, even if this means cutting the budget for other things. While this might seem live very simple math, and we wish all brands took this approach, we know that this is not the case, as 70% of the cost of a normal sneaker comes from advertising. Brands would invest more in the promotion of the sneaker than the sneaker itself - a strong signal that makes us question the quality of the product we are buying.
70% of the cost of a normal sneaker comes from advertising
Sourcing
According to VEJA, their production costs per unit are 5 times higher due to their commitment to the environment and their respect for fair-trade and worker’s rights (4). Their budget goes mostly to the initial stages of production: the sourcing of raw materials. This stage has been identified across the industry as one of the main sources of negative environmental and social impact (5). In order to reduce the impact that the production of raw materials have, VEJA has sourced for the past 19 years their cotton directly from farmers in Peru and Brazil, from agroecological, organic, and fair-trade farms (6). This diversification of sourcing into the Peruvian territory comes from the frequent droughts that the north of Brazil faced over the last year.
According to VEJA, their production costs per unit are 5 times higher due to their commitment to the environment and their respect for fair-trade and worker’s rights (4). Their budget goes mostly to the initial stages of production: the sourcing of raw materials. This stage has been identified across the industry as one of the main sources of negative environmental and social impact (5).
In order to reduce the impact that the production of raw materials have, VEJA has sourced for the past 19 years their cotton directly from farmers in Peru and Brazil, from agroecological, organic, and fair-trade farms (6). This diversification of sourcing into the Peruvian territory comes from the frequent droughts that the north of Brazil faced over the last year.
Production
From the start VEJA established its production in Brazil, creating strong links to the local communities that produce their shoes - a very different approach to the majority of sneaker production lines that source their production from Southeast Asia.
Southeast Asian countries which manufacture 95% of the world's sneakers. (8)
VEJA not only invests heavily in the sourcing of their products, but also in ensuring the welfare of their workers adding to the criteria defined by the ILO to create better working conditions. These criteria include (9):
Proximity and quality of housing
Freedom to form groups and defend their rights
Standard of living and purchasing parity
Employee benefits and freedom of expression
Factories are regularly audited and follow strict guidelines that adapt to the needs of the workers and provide plans to ensure the bettering of conditions.
Limits & Transparency
While all of this seems amazing, VEJA has limits that have yet to circumvent to become completely sustainable. However, we would like to take the time to applaud the fact that VEJA is very transparent in the disclosure of their weak points and why they continue to operate within them. Some of these include metal sourcing, the use of non-natural dyes, and lack of durability (10). Furthermore, what we believe is even more interesting, is their questioning behind fostering overconsumption - a question that needs to be posed across the whole of the industry.
An Alternative Business Model
It is these types of questions that truly distinguish VEJA from other sneakers, the type of questions that lead to completely different value chains. VEJA is a great case in alternative business models as most of their financial decisions are not based on financial gain but on moral grounds. Do not take me wrong, VEJA is still an extremely lucrative business, but the way in which they achieve it is by investing in their product above all else. And to VEJA, the investment on the product goes beyond the materials and production, but into the environments and communities that support them.
This type of mindset is what leads the brand to make even more decisions based on their engagement, such as their partnership with DARWIN to create a repair and recycling store, and work with NGOs to promote social inclusion through work. We believe that this brand is a pioneer in what implementing sustainable practices across the board can look like and clearly shows that creativity in business can take many forms.
By not using ads, they have really created the best marketing strategy for their product: allowing the shoes to speak for themselves, creating a community around their practices, and promoting and pioneering sustainability in the sneaker industry.
Sources:
(1) https://www.harpersbazaar.com/fashion/trends/a45159262/best-sneaker-brands/
(2) https://mensflair.com/worlds-best-sneaker-brands/
(3) (4) https://project.veja-store.com/en/single/ads
(5) https://www.ellenmacarthurfoundation.org/fashion-and-the-circular-economy-deep-dive
(6) https://project.veja-store.com/en/single/coton
(7) https://gatherandsee.com/blogs/the-gatherer/behind-the-brand-veja
(8) (9) https://project.veja-store.com/en/single/production
(10) https://project.veja-store.com/en/single/limits
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