Innovation

Treeshoes is a company that creates shoes almost entirely out of biodegradable materials. The shoe sole decomposes in three years, and most of their fabrics come from environment-friendly raw materials like cotton, with little or no use of synthetic fabrics in most of their shoe models.

Along with their shoes, customers receive a “Treekit” that includes a pellet of compacted fertile soil and seeds for them to plant. The seeds are chosen according to the retail region so they are compatible with the region’s climatic conditions in order for the tree can grow.

A portion of revenue is donated to several NGO’s that are dedicated to reforestation efforts, such as “Reforestación Extrema,” which is the main organization benefited from this action and it focuses in reforestation inside urban zones.

This innovation came up as Alejandro, along with other friends of his, were trying to figure out a way to positively impact the environment with a product that could be easily distributed and close to the new generations (although, as he mentioned during the interview, the product has been favorably accepted not only by millennials, but also by older generations). Taking into account that the shoe market offers relatively low production costs and that shoe products are among the most demanded apparel goods, Alejandro and his friends decided to bring innovation with environmentally friendly shoes.

Inspiration

The idea came from a business opportunity the partners had in the fashion industry and after several discussions they had agreed that they wanted to create a bigger impact than just providing clothing to the society. The environment was a big concern for them and wanted the business model to attack this concern. The final Treeshoe’s experience was designed for the company, their customers, and NGOs to become stakeholders in their mission to reduce pollution in the cities they lived in.

Overall impact

This innovative product and business model allowed the company to generate economic growth along with social benefit to local shoemakers. The latter have found growing demand for their manual labor that had been reduced over the last years due to automation in production systems in larger companies. Customer engagement through the Treekit has dual impact first on society with education and participation on environmental issues and secondly on the environment itself by supporting NGOs in their reforestation efforts.

Business benefit

Treeshoes has developed a business model that is heading towards complete sustainability and by intrinsically accounts integrates a triple bottom line. Their business model has allowed them to offer more than just shoes. The cachet that comes from the shoes being handmade by local craftspersons gives them an added. The whole experience provided by the Treekit and the donations to NGOs have built a the company's environmental reputation. The social and environmental pillars of the business model became differentiators for the brand in a highly competitive market, and have enabled the economic pillar to grow stronger.

During 2016 and 2017, Treeshoes sold 650 and 900 shoe pairs, respectively. While the volumes might still be low, these numbers translate in a year to year growth of over 38%. And what is most encouraging is that this has been achieved selling only in three cities of Mexico and appearing in local crafts events. The company will soon launch their marketing strategy and they are expecting increased growth for it. A challenge that the Treeshoes team has identified is that they will need to expand their current facilities and production. Despite expecting to meet and increasing demand, Treeshoes is solid for continuing to respect a sustainable business model.

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Social and environmental benefit

One of the social benefits derived from the business model is the increased involvement from their customers to the environmental issues that the company wants to mitigate. The Treekit seeks to raise awareness on their customers and make them a part of the environmental objectives set in the Treeshoes strategy. Through surveys they have found that around 10% of the people who buy a pair of shoes are planting and following up thoroughly on their Treekit seedling. They aim to increase this number through social media activations and sweepstakes where customers who participate and share their Treekit experience and photos can win prizes. During the interview, Alejandro made the point that “more benefit can be achieved by a 10% effort from all our customers, than from the 100% effort of one isolated person”.

Another social benefit is the jobs that are being created for the local shoemakers and local raw material producers. The shoe is made with local raw materials and workforce, helping the communities that surround the Treeshoes facilities to improve their quality of life.

Environmentally, the benefit gained is through reforestation. As mentioned previously, a percentage of the company’s income is automatically donated to NGOs that perform reforestation efforts, mainly in urban areas, but also in forests and regions where deforestation has been a constant struggle. With the addition of the Treekit, they make almost all of their stakeholders a part of this environmental effort.

Interview

Alejandro Galarza, Founder & CEO

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