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Allbirds CEO on activewear launch, sustainability charge: ‘this is just the beginning’

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Allbirds Co-Founder and Co-CEO, Tim Brown, joins Yahoo Finance to discuss why Allbirds has decided to launch an activewear line, how the addition of the activewear line will lead to a more diverse consumer base and the company’s focus on sustainability.

Video Transcript

[MUSIC PLAYING]

BRIAN SOZZI: Allbirds is pushing deeper into sustainability while most in the power lane continue to rely on oil-based polyester. The company said today it will launch a new line of athletic apparel made from Merino wool and yarn sourced from the pulp of eucalyptus trees, interesting stuff. Joining us for more on this is Allbirds co-founder and co-CEO Tim Brown. Tim, good to see you this morning. So take us through this new product line for Allbirds how long did it take to develop and what are your goals here?

TIM BROWN: Good morning. Thanks for having us. If you were exercising at the moment almost certainly you're running around in plastic derived from barrels of oil. And that is sort of something that a new generation of consumers are starting to demand that we change. We think we're on the cusp of a fundamental transformation in the sector to natural materials and we've been working very, very hard over the last couple of years to introduce our first performance apparel line made predominately from natural materials that launches today. So it's a very, very exciting moment for us.

BRIAN SOZZI: How do you make a product like this withstand in the wash? I think a lot of the allure about polyester is that it's durable.

TIM BROWN: Look, there's been an abundance of cheap synthetic materials for the better part of 50 years that the sector has become addicted to and so it is hard to change. Innovating in natural materials is hard, it's taken us a long time. But the reality is it's not just enough to make a product that's better for the environment, it also has to perform better.

And the amazing thing about natural materials is in the case of our leggings, they wick moisture, they regulate temperature, the combination of different natural materials performs in our opinion, better than a synthetic. So we're really excited about that. I think this is the opportunity. We all understand that climate change is the problem of our generation and we need to make products that are more thoughtful for the environment but they also need to perform better and that's what we managed to do we think here.

BRIAN SOZZI: Tim, we're getting some viewer feedback here and they're saying that a lot of folks, this particular person saying they love Lululemon but a lot of their products are still oil-based material and they're charging a good price for it. Is this what you're announcing, could that spur, you think that spurs a change at some of these athletic apparel leaders like a Nike, like a Lululemon?

TIM BROWN: I think the consumer is starting to demand that businesses and manufacturers in every sector make products that are more environmentally thoughtful and apparel is no different. Synthetic materials are not the future. This transformation to natural is just beginning we think beginning, is going to accelerate in the years to come and we think this product's important.

So you know, but this is very, very early and I think we have a lot to prove to the consumer. So I hope as they'll try this product and understand again, this is not just an environmental story, it's also a performance story. This is a better feeling product, it's a softer product, it's a product that hopefully, they're going to enjoy running in. And that's the most important thing.

BRIAN SOZZI: Tell us about your longer-term goals around sustainability.

TIM BROWN: It's very, very clear we need to make the products and the services that we use every day with little to no environmental impact. So it's the reason why we founded Allbirds a little over five years ago. And we believe that there's an accelerating understanding of the importance of doing this. And we're still in the early days but we have to try harder, we have to move faster and that's at the core of Allbirds' product innovation.

And so you know, this is the future I think for us is continuing to double down. We've introduced a new carbon number methodology that's labeled on every product that we make that measures the carbon footprint all the way down to the farm or the forest where our materials come from, it's a very important innovation. And I think it's another example of us measuring, improving, innovating, trying to make products that are better and better for the environment at the same time.

BRIAN SOZZI: Are you still on track to hit your 2025 sustainability goal, I believe that's what, 75% natural or recycled materials in everything you make?

TIM BROWN: Yeah, we've just launched a very aggressive plan for 2025 that we think is leading the category. It's very, very important, I think, for businesses to move from long-term plans and the sense of trying to do the right thing to short-term, measurable, step-by-step guidelines that they can follow. And that's sort of something as a young business we've had an advantage of, we founded Allbirds with the very, very clear goal of making the environment the North Star for how we create products. So we believe that we've got a little bit of a head start on this transformation but we've got a lot of work to do.

Certainly, we've seen in the five years we've been around, an acceleration from the rest of the industry in the category towards the environment and sustainability, which is a fantastic thing. But we've all got to move faster, this is, as I said before, the problem of our generation and we, you know, the fashion industry has been paying lip service to this for a long time. So now we all need to work faster and better towards the goal of making net-zero products.

BRIAN SOZZI: And one way I thought about this, this is a new revenue stream for Allbirds, which got me thinking again on your potential IPO. Any update there, do you see yourself as a public company soon?

TIM BROWN: You know, we've always imagined that one day we might be but no updates there. We're just, we're keeping our heads down at the moment. We've got a fantastic growing team here in San Francisco and some offices around the world. We're still a very young company and the big focus, as it has been from day one, has been on innovation and that's what's so exciting about the run apparel collection is it's another example of us taking a step forward towards building out the Allbirds lifestyle.

We launched performance products only a year ago, a lot of people, Brian, told us that that was the domain of synthetic materials and fibers and that we should stay away but we launched our first running shoe the Dasher and it's been really successful. And so to follow this on with perform apparel I think is another big step forward for us as a business and showing what we can do and what natural materials can do quite frankly, in this category.

BRIAN SOZZI: Well, congrats on the launch. We'll leave it there. Allbirds co-founder and co-CEO, Tim Brown. We'll talk to you soon.

TIM BROWN: Appreciate it. Thank you very much for having us.