Why an outdoor company fights for clean supply chains
The Outdoor business in Germany is running poorly – after years of growth. Yet German family-owned business Vaude strongly advocates for the controversial Supply Chain Act. The CEO Antje von Dewitz explains the reasons.
The trend towards active holidays is actually unbroken, it has shifted, and cycling is becoming increasingly popular. But for you, the past year hasn't been good. The sales decreased by six percent. What's the reason?
Antje von Dewitz: It's true that in the pandemic there was an extreme trend towards Outdoor and Bike, leading to strong growth. But market turbulences developed. There were issues due to the war in Ukraine, the economic crisis led to purchasing restraint. Many dealers have gone bankrupt or are in financial distress. Many Outdoor and Bike stores have been affected. This has resulted in large inventory stocks.
You advocate strongly in public for a Supply Chain Act and have long placed value on a sustainable supply chain. Critics often argue that it's too complicated and expensive for companies to build. Isn't it a burden for the companies?
I understand the burden, it's indeed a lot. I have noticed a lot of bureaucracy in the process of building sustainable structures at the beginning. It's challenging and frustrating. But it's part of the game. We are in a global economy, and a large part of my value creation takes place in the supply chains. I can't say: That's too challenging for me. Moreover, a well-managed supply chain also has innovation power.
What do you mean by that?
If I don't know where the problems are and don't have relationships, then I can't create innovation. I need to deal with the numbers.
How do you control such a supply chain then? It's not just a matter of finding out that it looks good.
As for the social aspect: All our production sites are externally audited according to the highest standards. We ourselves are audited annually. We have our own team in Asia that goes to the production sites and guides them through the improvement process. We align our own purchasing and product development behavior so as not to cause problems in production. That requires effort, and it's work.
And how do you deal with environmental issues?
We have a global carbon balance and know exactly where our emissions come from. That means we know where we need to start in order to become carbon neutral. Not just through compensation, but by reducing emissions. That only works if you measure it.
Such an effort results in significantly higher costs.
Yes, it's costly. It's hard to quantify exactly how much, as it affects all areas. We don't remove the social or ecological component every time. But roughly speaking: We once said that the customer is willing to pay five to eight percent more for sustainable products. And we have additional costs of 10 to 15 percent. That's a gap we need to bridge. But it has become smaller in the last years, as awareness grows.
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Despite the unbroken trend towards active holidays and cycling becoming popular, your sales have decreased due to market turbulences caused by the war in Ukraine and the economic crisis, leading to purchasing restraint and many retailers going bankrupt or facing financial difficulties.
In response to criticisms that it's too complicated and expensive for companies to build sustainable supply chains, Antje von Dewitz acknowledges the burden but emphasizes that it's essential for her company, given its reliance on global supply chains, and that a well-managed supply chain also has innovation power.
