Vaude positions itself as a sustainable, innovative outdoor brand and relies heavily on sustainability and environmental protection both in the company and in product development and manufacture. A development that seems to be increasingly being honored by the market: In the corona year, sales growth of 8% was recorded, and double-digit growth is even expected this year. The entrepreneurial edition spoke with Erwin Gutensohn, CFO at Vaude Sport GmbH & Co. KG, Tettnang.
INTERVIEW EVE RATHGEBER
Entrepreneur Edition: You came to Vaude in October 1991, almost 30 years ago, as Head of Finance. What did the company look like under Albrecht von Dewitz?
Erwin Gutensohn: Vaude has always been an outdoor company. In 1991 the product range already included backpacks, sleeping bags and clothing, the bike area was added later, as well as packs’ n bags and shoes.
The founder Albrecht von Dewitz was an outspoken innovator. His strength lay in building products and he soon realized that ecology is an issue. That is why he founded Vaude Ecolog, the first recycling network in the outdoor industry in 1994 and introduced a single-origin Cradle-to-Cradle collection; the products were made entirely from a single-variety polyester material and could be recycled after their useful life.
In 2009 Antje von Dewitz took over the management from her father. How has Vaude changed since then?
Antje von Dewitz had the vision of a thoroughly sustainable company. Together we in the management decided to focus entirely on sustainability. Our goal was to introduce a sustainable corporate strategy that pervades all areas of the company, from production to purchasing, sales and logistics to supplier relationships. At the same time, we have established a culture in which employees take responsibility, act self-effectively and deal with each other in a trusting manner. To do this, we changed structures and processes, and the employees and, in particular, the managers, received intensive training.
It was also important to us to create a good work-life balance and quality of life for our employees. At that time Antje already had four children and, from her own experience, was committed to a good work-life balance. Instead of long working days and meeting appointments well into the evening, flexible working time models and home offices were promoted in order to support employees in spending enough time with their families.
How can you be successful and make money this way?
By consistently implementing and living sustainability throughout the company. These values also radiate outward and give our brand a lot of energy and strength. We are considered a credible brand that is often chosen consciously. Our success proves us right: We have grown strongly since 2009. Since then, our sales have more than doubled and equity almost quadrupled.
What requirements do you place on your products?
Our products have to be functional and sustainable. For example, we have developed a drinking bottle made from sugar cane that does not smell of plastic and does not contain crude oil. We have developed our own label – “Green Shape” – for environmentally friendly and fair products, which uses very strict criteria to determine the entire life cycle of the product, from design to production to maintenance, repair and recycling. The repair index we developed plays a very important role. With this index, we ensure that the best possible repairability and durability of a product is included in the first step of product development. There is no such thing in any textile standard. We have created our own criteria for this, which are based on the strictest standards and are regularly revised. For this we also have an eight-person innovation department, our own test laboratory and a technological development park. We also maintain an intensive exchange and partnerships with universities, specialists, material manufacturers and other manufacturers.
So is it all about always being a pioneer?
As part of the textile industry, we feel jointly responsible for global challenges such as climate change, microplastics, etc. and would like to contribute to solving these problems. That is why we are voluntarily committed to high ecological and social standards that go far beyond the legal requirements. As a result, we are breaking new ground and are often one step ahead. That makes us very innovative and future-proof. We are considered pioneers and have built up recognized expertise in the field of sustainability. For example, our Green Shape concept was an important basis for the list of criteria for the Green Button, the first state seal for sustainably produced textiles. We have also made a significant contribution to the Supply Chain Act and contributed our experience.
How do you finance your sustainable innovations?
As a medium-sized family company, we do not get investor money or money from the stock exchange, but have to negotiate consortium agreements with the banks, which are ultimately always based on our key figures. That is why we have to take a close look at where we are spending the money and have a significantly smaller marketing budget compared to our competition.
We arranged our first syndicated loan with the banks through an innovation loan. Part of this was the financing of Green Shape 2.0 – the focus was on doing without PFC (fluorocarbons) and other harmful chemicals. We had set ourselves the goal of developing pollutant-free alternatives for water-repellent textile finishes that ensure that clothing does not become soaked with water. In the meantime we have concluded a second syndicated loan for Green Shape 3.0, with the help of which we have developed the repair index.
How has the corona crisis affected your business and how is the market for outdoor products currently developing?
We grew 8% last year and we will grow 15% this year. This shows that consumers appreciate our commitment and that we have become a desirable brand, especially thanks to our sustainability strategy. We have not only been dealing with Fridays for Future and climate change since yesterday. It’s in our genes – we’ve been practicing sustainability for many years and reporting about it in an absolutely transparent manner. This is perceived by people and creates trust and a high level of credibility.
The entire market is benefiting from the outdoor and bike boom that the pandemic triggered. People couldn’t travel and were enthusiastic about outdoor activities in the vicinity. This has increased the demand for our products, especially for our Made-in-Germany bike bags, which we manufacture at the Tettnang site. Overall, the outdoor market grew by 2% to 3% in the corona year. With our 8% growth we are even well above the competition. And this boom continues.
How important is online trading to you? What role does digitization play?
Online trading was spurred on in all its facets. People could no longer go to shops and therefore increasingly ordered online. The online area has been growing for many years and now accounts for 30% to 40% of our sales.
Digitization is the big, overarching topic. We are constantly optimizing here in order to position ourselves even more future-proof and dynamic. We are currently introducing a new ERP system with Microsoft Dynamics. This is currently the most modern software for corporate management and processing. We want to grow smarter and standardize all of our processes.
Do you see yourself increasingly in a consultancy role that you have recently been offering through the Vaude Academy for Sustainable Management?
The Vaude Academy was founded last year because we recognized that our experience and expert knowledge in the field of sustainability is very recognized and in demand. We get numerous requests for lectures, panels and the like. With our academy we inform and train other companies and organizations on their way to a more sustainable way of doing business. The demand is unbelievable, we are fully booked for the next few months. Numerous companies, universities, schools and private individuals turn to us. I myself am interviewed once a week by students, researchers, et cetera; Our CSR manager and all other specialists also have a number of appointments in public or in specialist circles.
How do you differentiate yourself from your competition?
The competition is also becoming increasingly sustainable, which we welcome in principle – because together we can move more. Most are larger and are held by corporations and strong investors. Apart from us, there are very few family businesses in the industry. The big difference, however, is that the sustainability strategy for most companies is one of many. For us it is the overarching corporate strategy.
What role do foreign production and sales markets play?
We have around 50 different production partners around the world with whom we have been working for a long time. Around 20% of them are in Germany and Europe, around 80% are in Asia. Our producers have to meet our strict sustainability criteria. We also offer our suppliers and producers training on ecological and social standards and support them on site, for example in setting up environmental management systems. In addition, the producers are regularly audited by the independent organization Fair Wear. This means that they have undertaken to adhere to clearly defined social standards and to pay fair wages. We, as your client, are also checked regularly. In the so-called Brand Performance Check of Fair Wear every year since 2015 we have received the highest possible status for our outstanding commitment with “Leader”.
We still have our manufacturing facility in Tettnang, which we are expanding. Here we mainly produce our high-frequency welded Made-in-Germany bike bags, which are growing very rapidly.
Our sales markets are 50% Germany and 50% other European countries, including Austria, Switzerland, the Netherlands, England, Italy, France and Spain. We are seeing continuous growth both in Germany and internationally.
What is your vision for Vaude in 20 years?
We want 100% CO in the near future2-be free with all products manufactured worldwide – we have been completely climate-neutral at the Tettnang site since 2012. We also attach great importance to growing organically. An annual growth of 15% to 20% presents us with very big challenges, which we will master by increasing capacity.
We are and want to remain pioneers in the industry. We don’t rest, we don’t rest. For us it is also important in the future to become even more sustainable and to constantly develop new topics for this.
Thank you for the interesting interview.
Erwin Gutensohn has been CFO at Vaude Sport GmbH & Co. KG for 30 years.
Short profile Vaude Sport GmbH & Co. KG
Founding year: 1974
Branch: Outdoor sports, bike sports, luggage and bags
Sales 2020: over EUR 110 million
Number of employees: around 500