ROADMAP_Footwear_MEXICO Final Version November 30

Scheer (IÖW) Roadmap „leather footwear“

Novem

ENABLING DEVELOPING COUNTRIES TO SEIZE ECO-LABEL OPPORTUNITIES PROJECT

MARKET INFORMATION AND ECO-LABELLING ROADMAPPACKAGE

FOOTWEAR PRODUCTS FROM MEXICO

DIRK SCHEER SUPPORTED BY DR. FRIEDER RUBIK AND DANIEL SPEDA

FINAL VERSION

HEIDELBERG / GERMANY, NOVEMBER 30, 2008

ber 2008 page 1 of 56


Contact

Institut für ökologische Wirtschaftsforschung (IÖW) gGmbH Institute for Ecological Economy Research (IÖW) gGmbH

Dirk Scheer Bergstr. 7, 69115 Heidelberg/Germany Tel.: ++49-(0)6221/649160 Fax: ++49-(0)6221-27060 Email: [email protected]

Acknowledgments

This paper was written by Mr. Dirk Scheer with contributions from Dr. Frieder Rubik and Daniel Speda of the Institute for Ecological Economy Research (Institut für ökologische Wirtschaftsforschung, IÖW) and Nydia Suppen from the Mexican Institute for Standardization and Certification.

Disclaimer

This document is not for distribution and is not an official UNEP or EC document. It has been prepared as a background for discussion at the national Workshop on Eco-labelling held in Leon / Mexico on October 6-7, 2008, and for related follow-up capacity building and technical assistance activities in the framework of the ‘Enabling developing Countries to seize eco-label opportunities’ project. Please do not quote any text from this paper.

November 2008 page 2 of 56


Content

1 INTRODUCTION ________________________________________________ 5

2 PART I: MARKET INFORMATION__________________________________ 7 2.1 General European market data ________________________________________ 7

2.1.1 European footwear market and industry ______________________________ 8 2.1.2 Footwear consumption in Europe __________________________________ 10 2.1.3 European importing countries of Mexican footwear_____________________ 12

2.2 Suitable markets___________________________________________________ 15 2.2.1 Identification of suitable markets ___________________________________ 15 2.2.2 Specific information on suitable markets _____________________________ 16 2.2.3 Attitudes of consumers towards footwear ____________________________ 20 2.2.4 The EU Eco-labelled footwear _____________________________________ 26

2.3 Promising subgroups _______________________________________________ 32 2.4 Report of experiences - Sabatini Calzature ______________________________ 33

3 PART II: PRACTICAL ROADMAP _________________________________ 35 3.1 Eco-labelling your products – tips on the EU-Flower application procedure _____ 36

3.1.1 The EU Eco-label application procedure _____________________________ 36 3.1.2 The EU Eco-label criteria _________________________________________ 37 3.1.3 The EU-Eco-label Competent Bodies _______________________________ 39 3.1.4 The EU Eco-label Assessment and verification requirements _____________ 40

3.2 Customer policies – successful placing of eco-labelled products on the European market __________________________________________________________ 41

3.3 Networking business relationships – strategic alliances and co-operation_______ 47 3.3.1 Business organisations __________________________________________ 47 3.3.2 Fairs of suitable markets _________________________________________ 51

3.4 Marketing activities_________________________________________________ 52 3.5 Final recommendations and strategic proposals __________________________ 54

4 REFERENCES ________________________________________________ 56



List of Tables Tab. 1: Divisions of footwear according to activity and material used __________________ 5 Tab. 2: Description footwear segments with the corresponding PRODCOM and HS codes _ 6Tab. 3: Population and GDP and new EU countries _______________________________ 7 Tab. 4: EU production of footwear 2001 – 2005, € million / millions of pairs _____________ 8 Tab. 5: Global footwear consumption (2002 in million pairs) ________________________ 10 Tab. 6: EU consumption of footwear 2001 – 2005, € million / millions of pairs __________ 11 Tab. 7: Understanding of the EU Eco-label in the suitable market countries ____________ 25 Tab. 8: List of EU-Eco-label awarded footwear __________________________________ 28 Tab. 9: The EU Flower for leather footwear: selected assessment and verification

requirements for selected criteria.________________________________________ 40 Tab. 10: European business clients of Mexican footwear exports ____________________ 47

List of Figures

Fig. 1: Footwear industry in Italy (Source: Junckert 2008: 2) _________________________ 9 Fig. 2: Footwear industry in Spain (Source: Junckert 2008: 3) _______________________ 9 Fig. 3: Main destination countries of Mexican footwear exports (2006) (Comtrade) ______ 12 Fig. 4: EU import countries of Mexican footwear (HS 64 and HS 6403) (2006) (Comtrade) 13Fig. 5: Suitable markets: Mexican footwear exports to and footwear consumption in selected

EU Member States ___________________________________________________ 15 Fig. 6: Distribution structure _________________________________________________ 17 Fig. 7: Footwear retail distribution in France, 2003 in % of value (CBI: 2004) __________ 18 Fig. 8: Footwear retail distribution in Germany, 2003 in % of value (CBI: 2004)_________ 18 Fig. 9: Footwear retail distribution in Italy, 2003 in % of value (CBI: 2004)_____________ 19 Fig. 10: Footwear retail distribution in Spain, 2003 in % of value (CBI: 2004) __________ 19 Fig. 11: Footwear retail distribution in the UK, 2003 in % of value (CBI: 2004) __________ 20 Fig. 12: French footwear market segmentation by activity, 2003, % market share in pairs _ 21Fig. 13: French footwear market segmentation by material, 2002, % market share in pairs 21Fig. 14: German footwear market segmentation by activity, 2003, % market share in pairs 21Fig. 15: German footwear market segmentation by material, 2002, % market share in pairs 21Fig. 16: Italian footwear market segmentation by activity, 2003, % market share in pairs__ 22 Fig. 17: Italian footwear market segmentation by material, 2002, % market share in pairs _ 22Fig. 18: Spanish footwear market segmentation by activity, 2003, % market share in pairs 23Fig. 19: Spanish footwear market segmentation by material, 2002, % market share in pairs 23Fig. 20: British footwear market segmentation by activity, 2003, % market share in pairs _ 23 Fig. 21: British footwear market segmentation by material, 2002, % market share in pairs_ 23Fig. 22: Knowledge and recognition of the eco-label ______________________________ 25 Fig. 23: Number of companies per product group (Sep. 2008) ______________________ 27 Fig. 24: Number of products awarded with the Flower by product group (Sep. 2008) _____ 27 Fig. 25: Evolution of awarded footwear producers in Europe since 2004 ______________ 28 Fig. 26: Overview on the application process (source: Eco-label Helpdesk 2008) _______ 36 Fig. 27: Footwear retailers /wholesalers in suitable market countries _________________ 44



1 Introduction The Sustainable Consumption and Production Branch of the United Nations Environment Programme’s Division of Technology, Industry and Economics together with InWEnt – Capacity Building International and other partners has started a 4-year project co-funded by the European Commission and the German Federal Ministry for Economic Cooperation and Development aiming at promoting eco-labelling in emerging economies. The project involves several countries (Brazil, China, India, Kenya, Mexico and South Africa) that have selected different export product groups (textiles, footwear, appliances and paper) for which the project will help to seize eco-labelling opportunities.

The Start-Up Workshop held in Bonn December, 3-4 2007 showed that target country partners require more specific information on eco-labelling market opportunities and detailed eco-labelling procedures. Thus, the present document provides market information and suggestions on how to successfully place eco-labelled leather footwear on the European market. It focuses on footwear eco-labelled with the EU Eco-label. In any case, information on suitable markets, successful placing of the products, and marketing strategies are valid in general for good eco-labelling practices.

The Mexican partners from politics and business & industry decided for leather footwear as most promising product group for eco-labelling activities. In the literature (CBI 2004) product group definition is either according to activity or to material (see Tab. 1)

Tab. 1: Divisions of footwear according to activity and material used

Based on activity Based on material

Sports ▫ This footwear is generally used for sporting

purposes. However, some of these types are also often used in day-to-day life. Examples of footwear which make up this segment are footwear used for running, walking, soccer, basketball, fitness, aerobics, etc.

Rubber/Plastic ▫ This segment generally distinguishes the

following footwear with rubber/plastic uppers: sport (ski boots), indoor (slippers) and outdoor footwear.

Leisure /Casual ▫ Footwear used for leisure purposes can be simi-

lar in appearance to the footwear designed for sports purposes but intended for spare time lei-sure activities. However, due to the “dressing down” trend, this type of footwear is increasingly being worn in the office. Generally, more fashion-able footwear is also included in this segment.

Leather ▫ This segment generally distinguishes the

following footwear with leather uppers: sport, indoor and outdoor. The outdoor segment will be further divided in outdoor footwear with leather soles and outdoor footwear with other (non-leather) soles.

Classic/ Formal ▫ This segment includes the more traditional formal

footwear, like high-heeled shoes for women. Formal styles in footwear change relatively little over the years. This segment is under increasing pressure from casual footwear.

Textile ▫ This segment generally distinguishes the

following footwear with textile uppers: sport, indoor and outdoor. The indoor footwear will be further divided into indoor with rubber/plastic soles and indoor with other soles. The outdoor footwear will be further divided in outdoor with rubber/plastic outer soles and outdoor with other outer soles.



Based on activity Based on material Outdoor/Rugged ▫ A general term for this type of footwear is ‘boot’.

A type of footwear with the opening above the ankle. This segment includes boots both utility (walking, climbing, etc.) as well as fashion boots. Examples of boots are: desert boots (or chukka boot or floats), side gore boots (or Chelsea boots), mukluk, etc.

Others ▫ This segment includes footwear with other

uppers, safety footwear, waterproof outdoor footwear and parts of footwear.

Source: CBI 2004: 9-10

When it comes to footwear data systematization worldwide, the classification system used is the Harmonised Commodity Description and Coding System (HS). Main emphasis is on gathering and exposing trade data and flows between countries. Relevant classification category is chapter 64 “Footwear, leggings, similar articles and parts thereof” of the HS code. In the European Union the so-called PRODCOM system is used to report annual production values. Both the HS and the PRODCOM system classify according to material used. Tab. 2 gives details on the relevant codes.

Tab. 2: Description footwear segments with the corresponding PRODCOM and HS codes

Segments Prodcom codes HS codes

Rubber/plastic uppers ▫ 19.30.12, 19.30.21, 19.30.23 ▫ 6402 Leather uppers ▫ 19.30.13, 19.30.21, 19.30.23 ▫ 6403, 6405 Textile uppers ▫ 19.30.14, 19.30.22, 19.30.32 ▫ 6404, 6405 Others ▫ 19.30.11, 19.30.31, 19.30.32

▫ 19.30.40 ▫ 6401, 6402, 6403, 6405, ▫ 6406

Source: CBI 2004: 10

According to the EU Eco-label criteria the product group definition is broader. It is defined as “All articles of clothing designed to protect or cover the foot, with a fixed outer sole which comes into contact with the ground”. As one can see footwear for EU eco-labelling is not restricted to leather materials. However, criteria thresholds for durability differentiate footwear categories based on activities and individuals respectively (e.g. general sports, school footwear, casual, men’s/woman’s town, fashions, infants, indoor).

In the following, chapter 2 will give detailed information on the European footwear industry and their corresponding markets, identify suitable markets for Mexican footwear imports, and report on firm-based experiences with the EU Flower. Chapter 3 provides a practical roadmap with tips on the application process, the successful placing of eco-labelling products on the European market, and hints on increasing the visibility of eco-labelling products and marketing strategies, while chapter 4 draws conclusions.



2 Part I: Market Information

2.1 General European market data We present data first for the whole European market and analyse the development of sales (i.e. consumption) figures and present statistical information on exports from Mexico to Europe and the different import countries. We conclude with some recommendations for the key national markets. Afterwards, we present some statistical information for the proposed markets. When it comes to statistical information, data on footwear consumption shows considerable incoherencies – even within publications by the same agency (in particular within the very interesting studies done by the Dutch “Centre for the promotion of imports from developing countries”). Therefore, interpretation of data should be used for identifying general trends.

The European Union market

With almost 500 million citizens, the EU combined generates an estimated 30% share of the world's nominal gross domestic product (US$16.8 trillion in 2007). The EU has developed a single market through a standardised system of laws which apply in all member states, guaranteeing the freedom of movement of people, goods, services and capital. It maintains a common trade policy, agricultural and fisheries policies, and a regional development policy. Fifteen member states have adopted a common currency, the Euro. Tab. 3 shows key data of selected EU member states.

Tab. 3: Population and GDP and new EU countries




2.1.1 European footwear market and industry

The European production of footwear shows a sharp trend of decline in recent years. Main reason is the strong Asian competition with China being currently the world number one footwear producer. For the time being, Europe is responsible for around 5% of world production. Other important producers are Latin America (6%), North America (5%) and areas such as Russia, Romania, Australia, Turkey or the Middle East. However, as has been mentioned China is by far the most important producer covering around 60% of world production. Asia as a whole including China contributes 75% of worldwide available shoes today.

Tab. 4: EU production of footwear 2001 – 2005, € million / millions of pairs

Sources: CBI 2007: 13

The EU footwear sector consisted of ca. 11,000 producer companies employing ca. 250,000 people in 2005. Compared to data available two years earlier the figures had fallen and show trends of a lack of competitiveness on world scale. Total EU footwear production in 2005 valued ca. 15,583 million Euro. Due to the fact of new EU Members such as Romania and Bulgaria with relevant share of footwear production, in the EU today, there are approximately 18,000 producers employing over 350,000 people. This has increased due to the 100,000 people that work in the footwear industry in Romania and Bulgaria, whose production figures are now included in the EU.



A closer look on footwear production patterns by Member States (see Tab. 4) reveals that European footwear business is still a Mediterranean business: Italy and Spain cover around two third of EU production (see Junkert 2008).

Italy

Fig. 1: Footwear industry in Italy (Source: Junckert 2008: 2)

Italy still remains by far the largest and most significant footwear producer in Europe. On world scale Italy is the fifth largest footwear producer. Though production costs are a main competitive barrier, Italy succeeded coping with intense world-competition from low-cost countries due to the fact of outsourcing cost-extensive production stages (namely production of the uppers of shoes) to low labour cost countries mainly in Eastern Europe (with Romania benefiting from it). However, starting from the millennium Italy has seen a steady decrease with an annual average change of -6.3% within the period 2001 until 2005. There is a high degree of territorial concentration among Italian footwear companies. They are mainly located in the following Regions: Marches, Tuscany, Venetia, Lombardy, Campania, Apulia and Emilia Romagna. Some Italian footwear producers are, among others: Filanto, Pol Scarpe (Geox), Basicnet, Rossi Moda, Tods and, in the sports footwear sector, Lotto and Diadore.

Spain

Fig. 2: Footwear industry in Spain (Source: Junckert 2008: 3)

Similarly, Spain, ranking second among EU-27 footwear production, experienced a sharp decrease from 1999 onwards. Between 1999 and 2005 production value in Spain decreased from 3,158 million Euro to 2,152 million Euro in 2005 which corresponds to an average annual percentage change of 8,7%. When it comes to volume pairs production the Spanish output reduced from 209 million



pairs to 127 million pairs in the reviewed period. Like in Italy main reason has been fierce low cost competition from Asian and Latin American countries. This led Spanish producers to change their business strategies away from the production of midrange quality products towards mid-high and top-end lines of superb quality with design components. Similar to Italian producers, the Spanish companies are in general small and medium sized companies. Due to their small-size, Spanish footwear producers are known to be very flexible when it comes to product development and production outputs. However, a barrier of this business model is a weakness to introduce and maintain strong brands. Spanish companies among others are Kelme, Coflusa SA (Camper), Ivan Shoes SL, Calzado José Vicente SL, Sendra Boots, Ras, Magrit, Pura Lopez and Jaime Mascaro.

2.1.2 Footwear consumption in Europe

The global footwear market

Global footwear consumption1 has been 12,469 million pairs of shoes in 2002 (see Tab. 5). The table reveals that major countries and/or regions such as China, Asia, Europe and North/Central America are in equal shares (around a fifth of total world consumption) responsible for footwear consumption. Thus, the EU is a major consumption market with a market size of around 20% of world footwear consumption.

Tab. 5: Global footwear consumption (2002 in million pairs)

Global Footwear Consumption (2002) (in million pairs)

Region millions of pairs % of total China 2,768 22.2

Asia (excluding China) 2,706 21.7 Europe (all) 2,544 20.4

North & Central America 2,381 19.1 Middle East, Africa, Oceania 1,172 9.4

South America 898 7.2 Total 12,469 100

Source: Batelco Jordan (see: http://uploads.batelco.jo/jib/uploads/footwear.pdf)

The European footwear market

Taking a closer look at the European market, Tab. 6 shows the country based footwear consumption patterns according to value and volume for several years. The value of footwear consumed (ex-factory sales) summed up to ca. 48 billion Euro in 2005. Biggest markets are Germany, UK, France, Italy and Spain. These five countries cover more than 70% of the European footwear market. Not surprisingly most new Eastern European Member States (e.g. Bulgaria, Romania, and Estonia) show the biggest annual increase of footwear consumption due to the fact of improving living conditions and earnings.

1 Desk research on footwear consumption data revealed on various occasions inconsistencies with the data available. Hence, data interpretation should be done with care, though the generic message of the data remains clear.



Tab. 6: EU consumption of footwear 2001 – 2005, € million / millions of pairs

Source: CBI 2007: 5

When it comes to consumer expenditure, the picture is a little different due to differing consumption patterns in the countries related to average amount yearly spent in footwear and the number of pairs annually purchased.

The European Union market for footwear can be judged a mature and stable market. After the recession occurring in 2001 the market started to recover since 2005. Consumer expenditure on footwear in 2005 was estimated as stable at about 48.6 billion Euros (not including Luxembourg, Malta and Cyprus).

Germany and the UK are the biggest footwear market in the EU with a market share of 18% (Germany) and 16.7% (UK). Next ranges France (16%), Italy (11.8%) and Spain (8.5%). Altogether, these five countries cover more than two third of European footwear consumption. Average rate on individual footwear consumption is 102 Euros and 4.3 pairs of shoes a year (CBI 2008). Especially the North-Western countries have experienced low growth figures. Between 1999 and 2003, the German, French and Belgium footwear market only increased by 2.7, 4.1 and 1.1 percent. Moreover, some interesting footwear consumption data are available for the big 5 markets (see CBI 2008):

Germany: the German consumption per capita is close to the EU average. In absolute figures, per capita consumption is 103 Euros and 3.9 pairs of shoes a year.



The United Kingdom: consumers in the UK are keen on buying footwear. Per capita consumption is 135 Euros and 5.6 pairs of shoes resp. annually which is considerably above EU average.

Spain: per capita consumption among Spanish consumers is 96 Euros a year which is below the EU average. However, when it comes to volume pairs, the Spanish consumers buy 4.8 pairs a year. That indicates lower purchase prices mainly in the low and medium quality segment.

Italy: Average consumption in Italy is 108 Euros a year or 4.3 pair of shoes each consumer. This is close to the EU average.

France: France is amongst the main consumers of footwear in Europe. Per capita consumption of 133 Euros and six pairs is well above the EU average.

2.1.3 European importing countries of Mexican footwear

Footwear sector in Mexico

In Mexico, the leather and the footwear industries are strongly linked, since in average between 1994 and 2007 around 68% of the production of leather has been designated to the manufacturing of footwear (INEGI – Instituto Nacional de Estadística: 2007). These industrial sectors employ more than 114,000 workers which correspond to 0.66% of the total work force. It is estimated that these two industrial sectors represent 0.38% of the national GNP and 0.66% in relation to the manufacturing industry with high economic significance for some regions. There are more than 7,490 companies in the sector including tanneries, leather, footwear and other related products (INEGI, 2004); 65% correspond to the footwear industry. The leather and footwear industry is mainly composed of SMEs, 94.5% of the total of companies.

Fig. 3: Main destination countries of Mexican footwear exports (2006) (Comtrade)

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50

100

150

200

250

300

350

USA

Canada

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Dominican R

ep.Ita

lyCuba

Venez

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German

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Costa R

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Guatemala

France

Others

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The volume of footwear exports was around 300 million US$ in 2006 (INEGI, 2007). In Mexico the footwear balance of trade has been negative since 2002 and it has not been able to recover, even if a number of strategies to promote the increase of footwear exports have been launched. Fig. 3 shows the main destination countries of Mexican leather products. The table shows that the USA is by far the most relevant importer of Mexican shoes (with US$ 288 millions a share of about 90%).

A closer look on the European landscape of Mexican footwear imports is interesting (see Fig.



4). On one hand it reveals that main European importers are Italy (US$ 3.6 million), Germany (US$ 2.1 million), Spain (US$ 1.5 million) and France (US$ 1.1 million). Thus, main European footwear consumption markets are already in view of the Mexican exporters, even though exports show a moderate quantity compared to Mexican exports towards the US. However, another aspect is most interesting. In Fig. 4 we compared the Mexican exports towards Europe according to the generic HS Code on footwear and a more specific on, namely:

Fig. 4: EU import countries of Mexican footwear (HS 64 and HS 6403) (2006) (Comtrade)

HS Code 64:

0500000

1000000150000020000002500000300000035000004000000

Italy

German

ySpa

in

France

United King

dom

Netherlan

ds

Denmark

Sweden

Poland

Greece

Dolla

r HS 64HS 6403

o Footwear, gaiters and the like; parts of such articles.

HS Code 6403: o Footwear with outer soles

of rubber, plastics, leather or composition leather and uppers of leather.

The graph shows that Mexican footwear exports to Europe is almost exclusively with uppers of leather – except for Italy. In the Italian case, leather footwear is about 63% of total footwear exports to Italy. The remaining of Mexican exports towards Italy is on parts of footwear (including uppers whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles; gaiters, leggings and similar articles, - the so-called HS 6406. The trade amount of Mexican parts of footwear has been 1,355,393 Dollar in 2006 (Comtrade). Thus, the Mexican footwear industry plays a crucial role as a supplier for the Italian footwear industry delivering parts of footwear.

The Mexican footwear industry – remaining challenges

As reported by the Mexican project partners, the Mexico – European Union Business Center, as part of the Ministry of Economy Integral Program to support small and medium size enterprises (PIAPYME) launched the program “Technology for the design of footwear for exportation to European Union” in 2003 and 2004. This program is coordinated by COFOCE, the Coordinator of Foreign Commerce of the State of Guanajuato, and involves workshops in 22 companies focused on the improvements of design.

The demand side analysis showed that in the footwear industry fashion and design are often related to innovation and technical development. It is difficult for most of the Mexican companies producing leather and footwear to be as innovative and encourage technical changes as companies in other leading footwear manufacturing countries. Furthermore, ecological standards and regulations hamper Mexican companies to adapt and adopt the new materials that are required to have less impact on the environment.



It is clear that even the leading footwear producers in the world, China and India will be exposed to stricter environmental purchase demand from the international market. In this regard a challenge to footwear manufacturers is imposed worldwide; technology and innovation play a major role in manufacturing “greener” leather and footwear. For instance, retailers are more and more interested in greening their image and proposing brand environmental standards to their suppliers. Eco-labels can than be a way of going even further, demonstrating and communicating to consumers, environmental excellence throughout the product value chain.

According to Leather International, 2007, the world production of footwear is around 20 thousand million pairs. China in 2006 produced 40% of leather and 70% of footwear worldwide. Even though brand name manufacturing will be a market asset, Chinese exports will be very vigorous challenging Mexican footwear industry (for instance by Chinese producers like Aokang). Against that background eco-labelling is a useful and innovative instrument to differentiate the product portfolio delivering products of environmental excellence and present the producing company as a leading frontrunner to competitors and private and commercial business partners.

Mexico has the clear need to increase competitiveness and look for higher levels of productivity; although the main export market is the US, the world’s biggest consumer of shoes, other markets should be of interest to the sector as well. The tanning industry will have to satisfy increasing requirements concerning its materials, such as biodegradability and recyclability; thus research and development play an important role in the future of this industry.



2.2 Suitable markets

2.2.1 Identification of suitable markets

Crosschecking the results from Mexican footwear towards the EU against European footwear consumption patterns reveals that Mexico exports already to the most important European footwear market, namely Italy. Moreover, business relation-ship including footwear exports already exist with Germany, Spain, France and the UK. Exports towards the Netherlands, Denmark and Sweden are, however, modest.

Based on these empirical evidences we recommend

To consolidate and complete business relationships with Italy, Germany and Spain,

To prepare market access and further develop the French and British market.

The following Figure links Mexican most important footwear export to corresponding market sizes based on consumption.

Fig. 5: Suitable markets: Mexican footwear exports to and footwear consumption in selected EU Member States

+

_ Mexican footwear exports

UK

+_

consolidate market develop

market

Explanation: DE = Germany UK = United Kingdom IT = Italy FR = France ES = Spain

FR

ES

DE

IT

Footwear consumption

arket sizein EU

countries

(m )

Source: own elaboration



2.2.2 Specific information on suitable markets

In the following we will illustrate the main footwear trade channels in the European Union based on research done by CBI (see also Figure 6):

Intermediaries in the footwear sector

1. Importers/Wholesalers: As more and more footwear consumed in the EU is not produced within Europe anymore but in Asia, the importance of importers/wholesalers has been gaining in the recent past. Importers/wholesalers deliver to independent footwear retailers, mail-order companies and department stores and – this however in smaller scale – to footwear multiples. The development that these “customers” prefer to sell more and more from stock instead of reordering in bigger quantities is strengthening the importers´/wholesalers´ position. The wholesalers buy their products from manufacturers around the world and hold their stock at their own risk. Mark-ups tend to be around 20-30% for them. On the other side, big retailing companies try – often successfully – to purchase abroad and to bypass importers/wholesalers.

2. Importing manufacturers: Manufacturing companies play an important role in the footwear distribution system. Many manufacturers sell their products to retailers but some even function as retailer themselves. Manufacturers with own outlet stores are for example C&J Clark Ltd. (UK), Groupe Eram (France) and Bata (Czech Republic).

3. Agents: Sales agents act as independent intermediary between the producer and retailer. They receive a commission from the producer, usually about 10-15% of the turnover. Nowadays many agents start to build up a stock on their own, which makes them practically act like a wholesaler themselves. Agents mainly operate in the middle/high quality and price segment.

4. Buying Groups: Buying groups are single dealers/retailers that form a group to act as one economic force when it comes to footwear procurement. The main reason why buying groups exist is to reduce costs by obtaining considerable discounts and saving money through shared logistics. Nevertheless, being a buying group’s member can come with some restrictions to the single participant: in order to achieve such economies of scale as described before, one has to accept a limited range of products which can be ordered. One of the biggest groups worldwide is ANWR with about 2000 members (and about 4000 outlets) and a turnover of 2.4 billion Euros a year.

Coming to the point of sale level towards consumers, the footwear retail sector is again highly fragmented. One can distinguish between footwear specialists and non-specialists. Specialists are exclusively footwear-sellers, for instance, independent footwear retailers, footwear multiples and chains of company-owned stores. On the contrary, non-specialists offer footwear as one product among others within their portfolio (e.g. supermarkets, mail order companies).



Fig. 6: Distribution structure


European footwear retailers – country patterns

The picture of footwear retailers in Europe is pretty complex both, when it comes to different strategies within a single national market and with regards to the targeted consumer groups. As the importance of the different retailers – measured in % market-share – differs considerably amongst European markets, the retailers will be discussed country-wise (see below).

Nevertheless, there are some divisions to classify the European retailing market into groups. For example one could divide into “service” and “low-margin” retailers. The first ones offer some extra value, especially when it comes to aspects of quality, service and choice. “Low-margin” retailers aim at consumers where the price is the only driving force at the decision making process. Another differentiation can be made between “specialised” and “non-specialised” retailers. The first ones – amongst them for example independent retailers – sell mainly footwear and maybe some related products like handbags and clothing. “Non-specialised” retailers - such as super- or hypermarkets or department stores – generate a significant part of their turnover with products other than footwear.



France:

Fig. 7: Footwear retail distribution in France, 2003 in % of value (CBI: 2004)

As one can see in Fig. 7 the share of independent retailers is still at about 1/4 of turnover in footwear. The fierce price competition has and will lead, however, to a shift in market share towards footwear multiples. The biggest multiples in France are Groupe Vivarte and Groupe Eram. Groupe Vivarte operates under a great variety of brand names in the French market (for instance La Halle and Chaussland aux Besson). A bit more than half of the group’s turnover is generated with footwear, the rest comes from clothing. Groupe Eram is both, the second biggest footwear retailer in France and a very big producer running hundreds of stores under different names. Since price aspects become more important to some consumers, hyper-& supermarkets have increased their share in the footwear market. Big players here are namely Carrefour, E.Leclerc and Auchan.

Germany:

Fig. 8: Footwear retail distribution in Germany, 2003 in % of value (CBI: 2004)

Independent retailers still have a high market share in Germany but the buying groups and multiples are gaining in importance. The major buying groups are the Garant Schuh & Mode AG and ANWR. Garant has some 5000 members (of which are about 2000 in Germany). The main German multiples are Deichmann (acting in 16 other countries apart from Germany) with more than 1000 outlets. Other important multiples are Görtz and Reno. Important department stores are Karstadt Quelle (now under the name/group Arcandor) and Kaufhof (as part of the Metro Group) with each more than 100 stores within Germany.



Italy:

Fig. 9: Footwear retail distribution in Italy, 2003 in % of value (CBI: 2004)

The Italian footwear market is still – and so unlike most of the other European markets – dominated by independent retailing stores (as one can see in Fig. 9). Even so, footwear multiples such as Bata (with some 250 stores under different names in Italy) and department store groups such as the Coin SpA Group and the La Groppo Rinascente have a noticeable market share. Another “threat” for Italian retailers are the factory outlet stores which are being built way closer to mayor cities than in most of the other European cities. In the sportswear sector Intersport plays an important role, having more than 300 outlets in the whole country.

Spain:

Fig. 10: Footwear retail distribution in Spain, 2003 in % of value (CBI: 2004)

The Spanish market structure is comparable to the Italian market as independent retailers dominate the footwear sector. This can – amongst other things – be explained with a close link between small scale footwear producers and comparable small shops. Anyhow, the market share of these independent retailers is decreasing to the advantage of footwear multiples, hypermarkets and department stores. The biggest footwear multiple in the Spanish market is the French Vivarte Group with about 150 stores. Another important multiple is Camper with its more than 50 outlets. The biggest department store player is the El Corte Ingles Group with more than 50 stores.



United Kingdom:

Fig. 11: Footwear retail distribution in the UK, 2003 in % of value (CBI: 2004)

As one can see, the UK market has one of the lowest market shares of independent retailers. Instead, footwear multiples, department stores and sports retailers dominate the market. The biggest player in the entire United Kingdom is clearly the footwear producer C & J Clarks Ltd. The company sells its shoes through its more than 550 outlets (running under different names). Another retailing producer is Stylo Plc. with more than 280 outlets in the UK. The second largest footwear retailer is the department store company Marks & Spencers, selling footwear in its more than 300 outlets. The leading sportswear retailers are JJB Sports, JD Sports and the Black Leisure group with several hundred outlets each.

2.2.3 Attitudes of consumers towards footwear

In general there is very limited information available on (end-) consumer behaviour and the consumption of eco-labelled footwear. However, there is knowledge and data available on European footwear consumption on Member State level.

European footwear consumption – country patterns

In the following, we will present some specific information on consumption country patterns in Italy, Germany and France. The information has been gathered and analysed by the several CBI studies, for instance CBI 2004.

France

In 2003, the French consumer spent individually ca. 130 Euro on footwear. The segmentation among gender is comparable to the German market with ca. 51% market share for women, 32% for men and the remaining 17% for children footwear. French consumers – especially the young - have become more interested in fashion than it has been in the past. However, even if there is a clear trend towards more informal leisure outfit all over Europe, the French consumer can be considered slightly more traditional. Fig. 12 and Fig. 13 reveal the French segmentation by material and activity. Casual footwear is predominant in the French market with almost 60% followed by sport shoes. Leather uppers are the predominant materials with a market share of about 41%.



Fig. 12: French footwear market segmentation by activity, 2003, % market share in pairs

Fig. 13: French footwear market segmentation by material, 2002, % market share in pairs

Source: CBI 2004

Germany

The German footwear market is most relevant due to its large population (around 80 million). There is a clear gender issue among German footwear purchase. Women footwear purchase counts for about 49% market share, while the men’s share is ca. 31%. Every fifth pair of shoes is sold for children’s use. Compared to Italy, purchase criteria are slightly different. Germans are less fashion and more price-conscious. Fitting, comfort and quality are the most important purchase criteria. Taking a look on segmentation by material and activity, the German market shows high relevance of casual and – to a less degree – sport shoes. The major role of quality is reflected in the overall predominant leather uppers which accounts for almost 70% of all footwear sold in Germany in 2002.

Fig. 14: German footwear market segmentation by activity, 2003, % market share in pairs

Fig. 15: German footwear market segmentation by material, 2002, % market share in pairs

Source: CBI 2004



Italy

In 2003, Italians spent on average ca. 108 Euro per capita on footwear. Decisive purchase criteria are style, fashion and quality. Thus, Italians set value on premium quality products. As one can see from Fig. 16, casual footwear (leisure) is the predominant type of shoes sold in Italy. However, even though classified as casual these shoes are more distinct and formal compared to, for instance, the average German casual footwear. Due to the fact of high significance of quality and fashion outfit in Italy, the market is more formal and stylish as compared to the other selected EU countries. Brand names play a crucial role in the Italian footwear market. When it comes to material segmentation, Fig. 17 reveals that textiles and leather material are predominant. Considering the material in value terms, leather even shows a bigger market share with ca. 49% (CBI 2004) – an indicator that leather shoes are sold much more expensive than the others.

Fig. 16: Italian footwear market segmenta-tion by activity, 2003, % market share in pairs

Fig. 17: Italian footwear market segmenta-tion by material, 2002, % market share in pairs

Source: CBI 2004

Spain

The Spanish footwear market is very mature but fragmented. Footwear has become a valued accessory product especially among women. It is now an essential fashion influenced product. Most important purchase criteria are fashion, design and comfort. However, informality is gaining ground in the Spanish market. An example is the success of the Spanish brand Camper. The data below shows the predominance of casual footwear covering more than two third of the Spanish market. On the other hand, leather uppers are less significant in Spain as compared to the other selected EU countries.



Fig. 18: Spanish footwear market segmentation by activity, 2003, % market share in pairs

Fig. 19: Spanish footwear market segmentation by material, 2002, % market share in pairs

Source: CBI 2004

The United Kingdom

The British consumer is – compared to continental trends – more formal and stylish especially regarding work. However, even in the UK the casual footwear market is in the mean time the most important one. Price is a key purchase aspect for British consumers. The most important material is leather uppers with a market share of 60%, followed by textile covering ca. 30%.

Fig. 20: British footwear market segmentation by activity, 2003, % market share in pairs

Fig. 21: British footwear market segmentation by material, 2002, % market share in pairs

Source: CBI 2004



Green consumption in Europe and consumer behaviour aspects related to footwear

Several studies in recent years show a high level of environmental awareness in Germany. While it increased steadily during the 1980s, it is now stable at a high level. Between 70 and 80 per cent of the population consider themselves environmentally aware (Kuckartz/Rheingans-Heintze 2006). Even if in a particular study other topics (e.g. unemployment, terrorism) exceed the environment in importance, all studies confirm that environmental issues are always among the three most important socio-political problems. According to experts, a decrease in environmental awareness can be considered unlikely. However, many research hinted to the fact to differentiate among consumer awareness and action. Environmental awareness is not automatically leading to green consumerism. One of the reasons could be the lack of proper consumer information enabling consumers to make purchasing choices based on environmental consideration. The role of eco-labels is therefore crucial in making the sustainable choice an easy choice.

Taking a look at European Union level, a Eurobarometer survey reveals that exactly three-quarters (25% totally agree and 50% tend to agree) say they would be willing to buy environmentally friendly products even if they were more expensive than “normal” products, while nearly a fifth is not willing to change consumer behaviour (Eurobarometer 2008: 27). However, when asked what Europeans had done in the past month for the environment including the item “bought environmentally friendly products marked with an environmental label”, the results are considerably lower. 17% of respondents reported that they had done this in the past month (Eurobarometer 2008: 27).

…and the EU Eco-label on national level

In winter 2006, a survey has been carried out in EU-25 covering more than 24,000 European citizens interviewed fact-to-face on behalf of the Directorate-General Environment of the European Commission. The aim was to identify the European’s awareness of the European eco-label that is what it stands for. The respondents were given eight pre-defined answer types in order to choose one corresponding best to their understanding of the label. The answer categories covered, for instance, “ecological products and services label“ (the right one), “green energy label”, Bio-food label” or “safe product label”.

Taking a closer look on the suitable markets identified above (see table 7), it reveals that only in Germany the right answer category scores first place with a moderate 11%. However, the understanding of the EU Eco-label as an “ecological products and service label” can be found among the first three places in all the countries analysed. But in general one has to state that the understanding of the EU Eco-label among European citizens is modest with an EU-25 average of 11%. On the other side, 48% of the interviewed answered that they do not know the label.



Tab. 7: Understanding of the EU Eco-label in the suitable market countries

Suitable market country

First place Second place Third place

France Green energy label (13%)

Ecological products and services label

(12%)

Other (spontaneous) (11%)

Germany Ecological products and services label

(11%)

Bio-food label (10%) Green energy label (8%)

Italy Bio-food label (12%) Ecological products and services label

(11%)

Safe products label (9%)

Spain Other (spontaneous) (9%)

Green energy label (8%)

Ecological products and services label (7%)

UK Green energy label (12%)

Ecological products and services label

(11%)

Bio-food label & others (sponanous) (both 3%)

Source: EU Commission 2007

…and the impact of the EU Eco-label marketing activities

The EU Commission regularly carries out marketing campaigns to raise the knowledge and the awareness of the EU Eco-label throughout Europe. The so-called Flower Week highlights the eco-label with country-tailored TV spots, events and marketing activities. Do these campaigns have an effect on the consumer?

Kvistgaard Consult (2005) examined the effects of the Flower week which took place in 2004 in several EU Member States, namely Austria, Belgium, Denmark, France, Italy, the Netherlands and Sweden. They carried out surveys among the targeted population in these countries and examined – among other topics – recognition and knowledge of the eco-label. Their results are presented in the following figure. One can see that recognition in Denmark where the Flower Week has been carried out in the corresponding period the effect is remarkable compared to the other countries.

Fig. 22: Knowledge and recognition of the eco-label

1521

59

1016

5

17

36

37

14

16

0

10

20

30

40

50

60

70

AT BE DK FR IT NL SE

Countries

Per

cent

age

Recognition

Knowledge



Source: Kvistgaard Consults (2005a: 35 and 37)

Towards “green shoes” – beginning of a success story?

In many respects the discussion on leather and footwear is similar to the discussion on textiles and clothing, although there are fewer environmental labels in this product group. Like textiles, the consideration of environmental friendliness has not been a key issue among consumers in the past. However, there are several hints towards a changing trend among consumers when it comes to purchase textiles and shoes. While organic cotton products have been a niche market over years, just recently there is a boosting of organic cotton sales. According to a publication of Organic Exchange, a non-profit trade association, the global production of organic cotton increased by 53% from 2005/2006 to 2006/2007; global organic cotton sales are projected to increase from $583 million in 2005 to $2.6 billion by the end of 2008 (see: http://www.organicexchange.org/Documents/fiber_press.pdf).

The same trend may occur in the footwear sector. One example of a change of attitude among producers is the case of Timberland. Since the fall 2006 Timberland experiments with a label communicating the energy used in making the shoes, the portion that is renewable and factory’s labor record (Cortese 2007). In spring 2007, Timberland introduced the so-called “Green Index” – a measure of the environmental impact of the products. The goal is to provide consumers with information on the ecological footprint of the products. The company announced to expand the programme in 2008 to include a full range of outdoor footwear products (see: www.timberland.com/corp/index.jsp?page=csr_green_index).

2.2.4 The EU Eco-labelled footwear

The EU Eco-labelling Scheme (known as EU Flower; see: http://www.eco-label.com) – established in 1992 – is a voluntary environmental labelling scheme for consumer products. Criteria for a product group are developed considering the life cycle. Environmental criteria are being developed for a wide range of everyday products. The scheme does not cover food, drink or pharmaceuticals. Most important product categories are tourist accommodation services, textiles products, paints and varnishes, and cleaners. The majority of the applying companies come from Italy, France, and Denmark. Fig. 23 shows the number of companies with Eco-labels per product group. One can see that currently nine companies have licences for eco-labelling their footwear products.



Fig. 23: Number of companies per product group (Sep. 2008)

Companies with the Ecolabel - by Product group

0 0 0 0 0 0 0 2 3 5 4 10 10 9 9 14 14 15 22 2341 45

71 74 76

217

0

50

100

150

200

250

DishwashersHeat pum

psPersonal Com

putersPortable C

omputers

RefrigeratorsVacuum

Cleaners

Washing m

achinesLightbulbsTelevisionsSoaps and sham

poosG

rowing Media

LubricantsHard Floor CoveringsFootwearCopying paperBed M

attressDishwashing D

etergentsSoil im

proversLaundry detergentsTissue paperCam

p Site ServiceHand dishwashing detergents

Indoor paints / varnishesAll-purpose & sanitary cleaners

Textile productsTourist Accom

modation Service

Fig. 24: Number of products awarded with the Flower by product group (Sep. 2008)

Number of products awarded with the Flower - by Product Category

0 0 0 0 0 0 0 19 19 24 31 30 50 50 54 61 79 83126

217 250304 318 342

710788

0

100

200

300

400

500

600

700

800

900

DishwashersHeat pum

psPersonal Com

putersPortable C

omputers

RefrigeratorsVacuum

Cleaners

Washing m

achinesSoil Im

proversG

rowing Media

Light BulbsLubricantsSoaps and Sham

poosBed M

attressesDetergents for D

ishwashers

Camp Site Service

FootwearTelevisionsLaundry DetergentsHand Dishwashing D

etergents

Tourist Accomm

odation Service

Copying PaperTextile ProductsHard Floor CoveringsTissue PaperAll Purpose C

leaners and Cleaners for San...

Indoor Paints & Varnishes

Fig. 24 shows the number of products awarded with the Flower per product category. The differences among licences and number of products awarded are due to the fact that companies have a licensee to eco-label several products within their product range. All in all, the graph shows that currently more than 3,500 products and services bearing the EU Flower are on the European market.



The European eco-label for footwear has been awarded to currently nine footwear producing companies in Europe. Altogether, these nine producers have awarded 61 products so far. Within four years the number of awarded producers remained more or less stable varying form seven to eleven (see Fig. 25). The reduction from eleven to nine is due to a withdrawal of two companies who did not prolong their license.

Fig. 25: Evolution of awarded footwear producers in Europe since 2004

Evolution of awarded producers in Europe since 2004

7

9

10

11

8

0

2

4

6

8

10

12

March 2004 March 2005 March 2006 March 2007 March 2008

Source: EU Helpdesk – personal communication

Tab. 8 shows the currently EU-Flower awarded footwear products and their corresponding manufacturers. The table reveals that producers mainly from Italy – traditional footwear producing country – and Swedish and Spanish producers are eco-labelling their footwear products with the EU-Flower. Data on the market share and turnover of eco-labelled products within these countries are not available to the public.

Tab. 8: List of EU-Eco-label awarded footwear

Product / Service Manufacturer/Service Provider/Retailer

Calzatura articolo ECO CE 01 S3


Calzatura articolo ECO CE 05 S1 p con fiori



Calzatura articolo ECO CE 391 S1 P


Calzatura articolo ECO CE 53 S1 P

OVER TEAK s.r.l



Product / Service Manufacturer/Service Provider/Retailer

Eco - Jack (2 models) 3A ANTONINI S.p.A.

Ecoalmar collection

LineaModali Ecoalamar

INDUSTRIE CALZATURE S.R.L

ECOGREEN

Linee di modelli “Ecogreen professionale”

CALZAT. FRATELLI SOLDINI

ECOSABATINI CALZATURIFICIO RELAX S.N.C

Linea modelli Eco-Pollice (19 models) TACCONI S.P.A.

Aequa the Eco-Chic (16 models) GAZZONI ECOLOGIA S.R.L.

Collection Amazonas PIKOLINOS INTERCONTINENTAL SA

Boot model no 5458, size 25-33



Boot with wool lining model no 5938, size 19-26

Child’s shoe, model no 5268, size 20-30

Sandal, models no 5228 and 5218, size 20-30

Shoe for small child, model no 5108, size 18-24

SKOFABRIKEN KAVAT AB

Source: EU Helpdesk – personal communication

A closer look on the sub-product groups currently eco-labelled with the EU-Flower reveals that safety shoes, town footwear, indoor footwear such as slippers and sandals as well as child shoes are dominant. We can conclude that specialisation on several sub-product footwear is promising to succeed with the EU-Flower.

Tab. 9 Eco-labelled footwear sub-products

Company Country Sub-Products

OVER TEAK Italy Safety shoes

GAZZONI ECOLOGIA Italy Town footwear

3A Antonini Italy Town footwear

INDUSTRIE CALZATURE Italy Safety shoes

TACCONI Italy Safety shoes

CALZAT. FRATELLI SOLDINI Italy Town and safety footwear



Company Country Sub-Products

CALZATURIFICIO RELAX Italy Indoor footwear, slippers and sandal

SKOFABRIKEN KAVAT AB Sweden Child’s shoes

PIKOLINOS INTERCONTINENTAL SA Spain Town footwear

Current developments – the SCP action plan and the revision of the EU Eco-label

Product-related environmental policy has been discussed among EU policy makers under the headline of “Integrated Product Policy (IPP)” and nowadays under the topic “Sustainable Consumption and Production (SCP)”. The main objective is to link several policy measures in order to integrate sustainability into the economy. The European Commission elaborated a strategy to support an integrated approach to further sustainable consumption and production and promote its sustainable industrial policy. This effort culminated in publishing the so-called “Action Plan on the Sustainable Consumption and Production and Sustainable Industrial Policy” on July 16, 2008 alongside with several other proposals on sustainable consumption and production that will contribute to improving the environmental performance of products and increase the demand for more sustainable goods and production technologies.

According to the EU Commission the “core of the Action Plan is a dynamic framework to improve the energy and environmental performance of products and foster their uptake by consumers. This includes setting ambitious standards throughout the Internal Market, ensuring that products are improved using a systematic approach to incentives and procurement, and reinforcing information to consumers through a more coherent and simplified labelling framework, so that demand can underpin this policy” (EU 2008: 2-3). The Action Plan consists of three parts: stimulating smarter consumption and environmentally better products, leaning production, and global market activities for sustainable products.

To support smarter consumption the following activities are intended:

Extension of EuP-Directive: The EuP Directive (COM (2005)32 EC), that establishes a framework for setting eco-design requirements for all energy using products (e.g. computers, televisions, water heaters) should be extended to cover all energy-related products except for transportation. As energy-related products, the Action Plan considers “(…) those products that have an impact on energy consumption during use (EU 2008: 4). Two complementary measures are announced, namely obligatory minimum requirements and voluntary advanced benchmarks.

Labelling of products: The different labelling approaches of the Commission should be strengthened by extension of the mandatory energy label to cover a wider range of products, including the ones belonging to an updated EuP-Directive, and by improving the performance of the voluntary European eco-label by further developing it as a “label of excellence”.



Incentives: The Commission intends to establish a more harmonised basis of incentives, but restricts this approach to green public procurement (GPP) and state aid. For GPP, a linkage to the energy labelling is envisaged by identifying a labelling class as a reference level below which public authorities are not allowed to procure products. The same level should be used for state aid of Members States below which incentives are not allowed to be set. In addition, it is announced that the Commission will examine options for revising the European energy taxation frame and other European fiscal incentives.

Other measures: o As a supplement to the measures described above, a consistent data base

and reliable methods should be prepared to assess the environmental features of products, their market dissemination and to monitor the temporal development.

o GPP should be supported by additional voluntary measures, namely guidelines, indicative targets and tender specifications for public procurers as well as voluntary common criteria for product categories not falling under the EuP Directive. Also a monitoring of GPP is foreseen.

o Work with retailers and consumers: The Commission intends to launch a retail forum to initiate a greening of retailers. Besides that, the Action Plan refers to the EU consumer policy strategy and its goal to empower consumers.

o Leaning production as second part is intended to extend, amplify and accelerate the part dealing with smarter consumption. As concrete actions boosting of resource efficiency, supporting eco-innovation and enhancing the environmental potentials of industry are intended. The Action Plan is not restricted to the single European market, but plans also to promote international trade in environmentally friendly products and services, to promote good practises internationally and to promote sectoral approaches.

Against that background the EU Commission published a proposal for a revision of the Community Eco-label scheme. Among other the Commission proposed a new layout for the Eco-able as shown on the right. According to the Commission the following commitments will be foreseen for the revised EU Eco-label regulation (EU 2008a: 6-7):

Better linkage of the EU eco-label with other sustainable production and consumption actions: that is to establish synergies between different product-related policy instruments in order to reduce the administrative burden on companies.

Introduction of measures to encourage harmonisation with other eco-labelling schemes: For companies wishing to apply for more than one eco-label, harmonising measures can only reduce their administrative burden. Costs of tests could be reduced by 100% if one label is already held as no additional testing or verification would be required.

More product groups: It is planned to double the number of eco-label requirements from



25 to 40-50 up to the year 2015.

Simplification of criteria and quicker criteria development: It is intended to simplify the procedure for criteria development and to concentrate requirements on the most significant environmental impacts during the life cycle of the considered product group.

Introduce a template for criteria documents to ensure they are more user-friendly: It is foreseen to standardize criteria documents and make them more user-friendly.

Incorporate guidance for Green Public Purchasing into criteria development: Procurement officers will have easier access to EU-wide harmonised criteria and companies will have a level playing field if the same criteria are used across Europe in technical specifications for contracts.

Abolition of annual fees: The Commission intends to abolish the annual fees based on turnover calculation of sold eco-labelled products. The registration fees should be limited up to not more than 200 Euro.

These proposals have to be agreed among the Commission and the Member States which is foreseen for the next year 2009.

2.3 Promising subgroups

European demand side characteristics

Deciding for the type of shoes to be eco-labelled and successfully exported is a very critical decision and depends highly on the exporter’s enabling technologies, skills and existent product range. In general, it seems more promising to have something different and at short supply for the European market except following the same product line as other EU importers. The European consumption patterns in the identified suitable markets revealed a dominance of casual footwear in all five countries considered. Taking a look on segmentation by material, leather is the predominant material used among footwear sales in these countries (with the exemption of Italy). The market share of leather material in the suitable market countries ranges from 36.7% (Italy) to 69.5% in Germany.

Taking a look on current EU eco-labelled footwear products, the product range:

is exclusively on casual shoes with leather uppers,

covers specific target groups, i.e. for children,

includes the sub-groups indoor shoes, sandals, moccasin, slippers and outdoor hiking shoes.

…and promising sub-products

Against that background we recommend as most promising casual footwear with leather uppers in a medium to high price segment. Taking the presentations and experiences of the Mexican target country workshop held in León October 6-7, 2008 into account, it revealed that the Mexican footwear industry is strong in producing excellent quality products in particular in the classic and formal men’s and woman’s footwear segment. These



products show high chances to succeed in the European market in the medium and high price segment due to its high quality standards sold at competitive price levels. Bringing in an added eco-labelling value seems even more promising. Moreover, summer season products, specific niche market shoes, and customer-related shoes are promising for the European market.

Specific types could be:

classic/formal men’s and woman’s footwear in the medium to high price segment,

summer season products (e.g. sandals, slippers, moccasin),

specific niche markets such as safety shoes and/or health shoes,

and customer-related products (child shoes, hiking footwear and boots).

2.4 Report of experiences - Sabatini Calzature The history of Sabatini Calzature goes back to 1896, when Luigi Sabatini decided to open up a small workshop for making shoes “to measure”. The focus was from the very beginning on high quality production from choosing and tanning the leather, creating the designs and hand stitching. The development of this specific sector, in which the Sabatini company has already achieved great success, is now being continued by Federico Sabatini. After receiving a university degree majoring in the shoemaking industry, Federico carried out considerable research on the physiology of the foot, in order to develop and introduce new, innovative, high-tech materials, combining them with the traditional Sabatini quality.

EU-Flower experiences of Sabatini Calzature

The company started experimenting with the EU-Flower six years ago. Currently, the company has two products bearing the EU-Flower. It is the product line named “Ecosabatini” with the corresponding model codes S57 and S62. When they started in the year 2002, eight products have been eco-labelled with five in the summer collection and three in the winter collection. The company stayed with the mentioned bestseller models. Currently the company offers around 250 different footwear products. According to personal communication with Federico Sabatini, all products would meet the EU-Eco-label requirements. For the winter 2009, Sabatini Calzature plans to apply for further eco-label certification for slippers and shoes.

The decision to apply for the EU-Ecolabel has been based on the following main motivations and characteristics:

The company’s main characteristic being a hand-made production which is able to respect the environment,

the need to raise the knowledge and publicity of the brand-name,

Sabatini Calzature would like to sell their products to consumers who are looking for comfort shoes and paying attention to the environment.

The application process for getting the EU-Flower has been judged as a big effort by Sabatini Calzature. It has been a considerable workload to meet and testify the laws and



procedures. One of the most difficult efforts has been to meet the criteria focussing on suppliers. This is especially on the leather industry supplying the footwear-makers with semi-finished leather products. It has been difficult for the company to convince the leather and sole suppliers to inform on the environmental performance of their products in order to fulfil and testify the Eco-label criteria.

The market experiences of Sabatini Calzature show on one hand promising financial indicators. Being asked to quantify any change for financial indicators through the adoption of the Eco-label, the company reported the following data for its eco-labelled products:

Sales in 2007 (pairs): 2% (4.000 pairs),

Turnover 2007: 1,5% (100.000 euro),

Investments 2007 (marketing area): 8.000 Eros.

The company uses the EU-Eco-label systematically for its marketing activities. The label stands for excellence and environmental premium products and is used widely in Sabatini’s marketing efforts such as in catalogues, show cards and magazines and advertisements.

However, a critical issue of the EU Flower is still the lack of publicity within the shoe market. The flower is not very well known among footwear consumers. According to Sabatini calzature there is a strong need for marketing activities especially at the point-of-sale. Besides the lack of knowledge of the EU-Flower among footwear consumers, the production costs of eco-friendly footwear has been judged a crucial issue by Sabatini calzature. According to them producing eco-goods includes high costs which retailers and the final consumer is in general not willing to pay. Even in the high premium footwear segment, the price is still a crucial issue and the willingness to pay for environmentally benign products is modest.

The future and outlook: Based on the current experiences with the EU-Eco-label, the company is convinced that there is a need to expand the eco-label on its product portfolio. Sabatini calzature plans to introduce the eco-labelled products for the winter collection 2009 (winter slippers). Next steps for the company are to elaborate a new selling strategy to increase the eco-label brand visibility.

Being asked if footwear exporters from developing countries (for example Mexico and Kenya) would benefit from certifying their products with the EU-Flower, Sabatini calzature stated clearly: “if the exporters operate in the medium to high price premium level, eco-labelling is a good opportunity to indicate a unique quality. If exporters focus on low quality mass products, eco-labelling brings no benefit”.



3 Part II: Practical Roadmap This second part, starting from practical aspects of the application procedures of the EU Eco-label, is meant to be a practical roadmap on how successfully place eco-labelled leather footwear on the (European) market, including promising marketing and visibility strategies. Even if the focus is meant to be footwear eco-labelled with the EU Eco-label, much of the text is valid for any Type-I eco-label.

The main suggested steps of this roadmap are the following:

Step 1: Eco-labelling your products – applications and procedures (see 3.1) o Decide on the benefit of the EU-Eco-label according i.e. to market

perspectives, and suitability of criteria

o Go through the application procedure and get the label

Step 2: Customer policies – successful placing of eco-labelled products (see 3.2)

o Inform your business association and government responsible of your eco-labelling activities

o Look for private companies that can be your customers

Step 3: Business networking - Strategic alliances and co-operation (see 3.3) o Explore the European footwear retail landscape: networking with business

associations and sector events (e.g. fairs)

o Develop partnerships with some reliable NGOs and consumer organisations to advertise eco-shoes

Step 4: Marketing activities – company & sector presentation and image (see 3.4)

o Promote eco-labelled footwear products as sustainable and responsible.

o Use open window of climate change (carbon footprint communication)



3.1 Eco-labelling your products – tips on the EU-Flower application procedure

The following subchapters inform shortly on the application procedure, the criteria, Competent Bodies (CB) and test laboratories. First of all, however, a company must assess and decide on the benefits of the EU-Eco-label. Relevant aspects to be considered in the assessment are, for instance, the following:

Conformity assessment, needed to understand how far a company is to comply with the EU eco-label criteria.

Market responses, e.g. to get a green price premium, increase market shares, anticipate market behaviour changes, future standards.

Company related drivers and barriers, e.g. - corporate image, company/branding strategies, set up of environmental expertise.

3.1.1 The EU Eco-label application procedure

The European eco-label has a clear application procedure, summarised in the figure below.

Fig. 26: Overview on the application process (source: Eco-label Helpdesk 2008)



The Spanish Technological Institute for Footwear and its Related Industries (INESCOP) has launched an interesting website on the EU-Flower for footwear (see: http://www.life-ecofoot.inescop.es/). They provide substantial and detailed information on all the information needed for carrying out the application process with a 5-step approach:

STEP 1: Get in contact with a Competent Body in the country where the footwear is produced/imported: Here you get all the necessary information about the application process.

STEP 2: Carrying out the tests and collecting the information: First, a test laboratory must be contacted to carry out test procedures. The Competent body will provide you with useful information. After having carried out the tests, the application form can be filled out and send to the Competent Body.

STEP 3: Application Evaluation: The Competent Body will check the application form and the test results received. If the product is suitable, the Competent Body will inform the European Commission and the other State Members, so that, if they wish, they can present objections.

STEP 4: The Eco-label award: In case no objection has been received the Competent Body will award the producer/importer with the eco-label. The eco-label is valid as long as the criteria are in force.

STEP 5: Checking the fulfilment of the criteria: During the period of the certification, the Competent Body may carry out further inspections on the company and ask for new tests in order to guarantee continue fulfilment of the criteria.

3.1.2 The EU Eco-label criteria

The currently valid criteria for the EU-Flower are under review and will be updated. The ecological criteria for the product group footwear, as well as the related assessment and verification requirements, shall be valid until March 31, 2010. The check-list below informs – for a quick-time assessment only – on the currently valid criteria.



The EU Commission has elaborated a user’s manual2 for the application process for eco-labelling footwear. The aim is to give guidance for companies that are interested for Flower. The application also describes the procedures for controlling continuous compliance with the criteria, once the eco-label has been granted.

2 See: http://ec.europa.eu/environment/ecolabel/pdf/footwear/footwear_usermanual_2001.pdf



3.1.3 The EU-Eco-label Competent Bodies

Applicants are allowed to address their applications to every Competent Body in the countries involved, these are all 27 Member States of the European Union and in addition Iceland and Norway3. We recommend contacting one of the Competent Bodies (CB) in the different European countries suggested as most promising export market, their contact details are in the table below. In Spain, there are several Competent Bodies available covering different provinces. It could be very useful to enter in contact with the Italian competent body, which is in the process of leading the revision of the EU Eco-label criteria for footwear.

Germany

Mr Christian Loewe Federal Environmental Agency Wörlitzer Platz 1; D-06844 Dessau Postfach 1406 D-06813 Dessau tel: (+49) 340 2103 3025 fax: (+49) 340 2104 3025 [email protected] Mr Henning Scholtz RAL Deutsches Institut fur Gutesicherung und Kennzeichnung Siegburger Str. 39 D -53757 Sankt Augustin tel: (+49) 22 41 16 05 23 fax: (+49) 22 41 16 05 11 [email protected]

United Kingdom

The UK Ecolabelling Competent Body Mr Charles Cox Green Labelling Unit Defra (Department for Environment, Food and Rural Affairs) Area 5D, Ergon House c/o Nobel House 17 Smith Square, LONDON SW1P 3JR tel: + 44 (0)20 7238 4404 [email protected]

Spain

Cataluña Mr Salvador Samitier Direcció General de Calidad Ambiental Departamento de Medio Ambiente y Vivienda C/ Diagonal, 523-525 E-08029 Barcelona Tel: +34 93 444 51 08 or Tel: +34 93 444 50 00 Fax: +34 93 419 76 30 [email protected] Valencia Mr D. Joaquim Niclós Conselleria del Territorio y Vivienda D.G. de Calidad Ambiental Servicio de Control Integrado de la Contaminación Parque Tecnológico de Paterna Centro de Tecnologias Limpias C/ Isaac Peral y Caballero, 5 46980 – Paterna (VALENCIA) Tel: +34 96 136 69 49 or Tel: +34 96 197 35 47 Fax: +34 96 131 84 95 [email protected] Cantabria Sr. D. Miguel Ángel Sastre Consejeria de Medio Ambiente D.G. de Medio Ambiente C/Lealtad, 24 39002 – Santander Tel: +34 94 220 23 30 or Tel: +34 942 20 70 19 Fax: +34 942 20 70 34 [email protected]

Madrid Ms Dña. Carmen Jiménez Servicio de Promocion y Disciplina Ambiental Calle Princesa 3, E-28008 Madrid Tel: +34 91 580 16 92 or Tel: +34 91 420 67 00 Fax: +34 91 580 54 18 [email protected]

Italy

Mr Silvestrini Comitato Ecolabel Ecoaudit C/O APAT Via Vitaliano Brancati, 64 I-00144 Roma tel: (+39) 06 5007 2434 fax: (39) 06 5007 2439 [email protected] Ms Stefania Minestrini APAT - Agenzia per la Protezione dell'Ambiente e per i Servizi Tecnici Via Vitaliano Brancati, 48 I-00144 Roma tel: (+39-06) 5007 2231 fax: (39-06) 5007 2078

France

Mme Patricia Proia Association Française de Normalisation (AFNOR Certification) 11, avenue Francis de Pressensé Saint-Denis La Plaine Cedex F-93571 Paris tel: (+33) 1 41 62 86 10 fax: (+33) 1 49 17 90 37 [email protected]

3 See the eco-label webpage for a complete overview: http://ec.europa.eu/environment/ecolabel/tools/competentbodies_en.htm.



3.1.4 The EU Eco-label Assessment and verification requirements

Applicants must show compliance with each of the criteria as laid down in the current valid criteria document 2002/231/EC. The specific assessment and verification requirements are indicated within each criterion within the document.

Where the applicant is required to provide declarations, documentation, analyses, test reports, or other evidence to show compliance with the criteria, it is understood that these may originate from the applicant and/or his supplier(s) and/or their supplier(s), etc., as appropriate. Where appropriate, test methods other than those indicated for each criterion may be used if their equivalence is accepted by the Competent Body assessing the application. Where possible, testing should be performed by appropriately accredited laboratories that meet the general requirements expressed in standard EN ISO 17025 (accreditation of test laboratories). Where appropriate, competent bodies may require supporting documentation and may carry out independent verifications. Tab. 9 gives an overview of selected assessment and verification requirements as an example for selected criteria.

Tab. 9: The EU Flower for leather footwear: selected assessment and verification requirements for selected criteria.

Criteria Assessment and verification:

Residues in the final product (a) The average concentration of residues of Chromium (VI) in the final product shall not exceed 10 ppm and the residues of Arsenic, Cadmium and Lead shall not be detected in the final product (using the method specified below). (b) The amount of free and partially hydrolysable formaldehyde of the textile components of the footwear shall not exceed 75 ppm and of the leather components shall not exceed 150 ppm.

▫ Cr(VI): CEN TC 309 WI 065 — 4.2 or DS/EN 420 or DIN 53314: 1996-04 (note: difficulties in measurement due to interferences may be encountered when analysing certain coloured leather);

▫ Cd, Pb, As: CEN TC 309 WI 065 — 4.3 Sample preparation: (1) Separate the upper components from the bottom components. (2) Grind completely the upper components and the bottom components, keeping both separate. (3) Analyse a sample of each of these two preparations. (4) The substances in each of these two samples shall not be detectable.

▫ Textiles: CEN TC 309 WI 065 — 4.4; Leather: CEN TC 309 WI 065 - 4.4.

Emissions from the production of material (a) The waste water from leather tanning sites and from the textile industries shall be treated, either by an in-house or municipal waste water treatment plant/facility, so as to achieve a reduction of the COD content of at least 85 %. (b) Tannery waste water after treatment shall contain less than 5 mg Chromium (III)/l.

▫ Assessment and verification: the applicant shall provide a test report and complementary data, using the following test method: COD: ISO 6060 Water quality, determination of chemical oxygen demand.

▫ Assessment and verification: the applicant shall provide a test report and complementary data, using the following test methods: ISO 9174 or EN 1233 or EN ISO 11885 for Cr.

Energy Consumption The applicant is requested on a voluntary basis to provide detailed information on the energy consumption per pair of footwear.

▫ Assessment and verification: the applicant is requested to provide the relevant information.

Source: compiled according to EU 2002



The selection of a test laboratory is up to the applicant; laboratories could be everywhere and must not be located within the European Union. However, it is recommended to involve reliable laboratories to avoid any troubles. The European Commission has published some laboratories on its eco-label webpage4 with several dealing with footwear testing. Here are some for the relevant countries.

Italy

SCAM s.r.l. Via Enaudi 436 62012 Civitanova Marche Tel.: +39 (0)733829108/09Fax: + 39 (0)733829110 INSTITUTO DI CERTIFICAZIONE s.r.l. Viale Europa 28 22060 Cabiate Tel: +39 (0)31768403 Fax: +39(0)756106 A.N.C.I. SERVIZI-SEZIONE CIMAC Corso Brodolin 19 27029 Vigevano Tel: +39(0)38173393 Fax: +39(0)28173393

Spain

INSTITUTO TECHNOLOGICO DEL CALZADO Y CONEXAS (INESCOP) Contact: Mr. Miguel Angel Martínez I “Campo Alto” Aptdo. 253 03600 Elda, Alicante Tel: +34(0)9655395213 Fax: +34(0)965381045 E-mail: [email protected] Asociación de Investigación de las industrias del Curtido y Anexas (AIICA) Contact: Mr. X. Marginet Av. del Pla de la Massa 08700 Igualada Tel: +34(0)938055388 Fax: +34(0)938050616 E-mail: [email protected]

ENTIDAD DE CERTIFICACIÓN Y ASEGURAMIENTO, SA Contact: Mr. Enric NEbot Moll de Barcelona, “World Trade Center”, Ed. Sud 08039 Barcelona Tel: +34(0)932701160 Fax: +34(0)933424582 E-mail: central@ecacertification. com Laboratori General dÁssaigs I Investigacions (LGAI) Contact: Mr. Ramon Capellades I Font Ctra. d’assés a la Facultat Medicina UAB 08290 Cerdanyola del Valles Tel: +34(0)935672000 Fax: +34(0)935672001

United Kingdom

SARTA Technology Certre Contact: Mr. John HubbardRockingham Road NN169JH Kettering, Northamptonshire Tel: +44(0)1536410000 Fax: +44(0)1536410626 E-mail: [email protected]

3.2 Customer policies – successful placing of eco-labelled products on the European market

Establishing business relationships

The European footwear market can be seen as a mature, well developed market. It is a large and highly fragmented market with a diversified structure on Member State level. Competition among intra European and external suppliers is fierce. While internal suppliers operate in the medium and premium segment of the market, several external suppliers (Tunisia, India and China) – China is the most important supplier for cheap, low quality

4 See http://ec.europa.eu/environment/ecolabel/how_to/testlabs_en.htm



synthetic shoes and high quality sport shoes – cover low to medium price segments. However, there are several advantages for abroad suppliers operating in the EU market: strong competition and exposition to the latest developments in fashion, technology, governmental product policy and consumer trends will help suppliers professionalize the sector and sell products to less developed market.

In principle, there are two options for exports into the EU (Batelco Jordan: 46):

Direct selling

Sub contracting

Direct selling has the advantage to control the business including marketing strategies, brand name creation and decision on markets to penetrate. Moreover, higher profits and a more international market surrounding are benefits. However, it will take a longer time and considerable efforts to establish as a direct seller in the European market.

Sub-contracting is a formal business relationship with chain stores, buying groups or department stores selling footwear products under another name. The exporter can be called a “junior partner” producing footwear products as a local licensee for an international brand. While it guarantees a credible sale in customer countries and includes quite often a transfer of technology, it also includes that control over profit margins is very limited. Fig. 26 outlines the most important footwear retailers and wholesalers in the most suitable European countries.

We recommend following a direct selling strategy, if producers offer unique and brand-oriented footwear products for the EU market. If producers offer products in the lower to mid quality range and are flexible to overtake sub contracting duties (e.g. design and price specifications) sub contracting is most promising.

…and bring in eco-labelling advantages

Eco-labelling footwear bears considerable advantages for producers, consumers and retailers as identified by INESCOP (see: http://www.life-ecofoot.inescop.es/):

For producers: o Increase in customer loyalty and it is the best way to respond to growing

consumer demand about environmental aspects, for more scientific and reliable information about the products they are buying.

o Reinforces the corporate identity as being a symbol of environmental excellence that is recognised on a European scale and will help to assure the customers of the company’s environmental promise.

o Improve the image of the mark by guaranteeing environmental excellence and it is a symbol of additional quality for the products

o Useful promotion tool and for communication to the consumer about the product.

o Allows contact with environmental issues for future development.

o Beneficial buying and production habits, both for the company itself as well as




the environment.

For retailers o The image of environmental concern is acquired.

o It gives the customer as sense of confidence and security with the shop.

o Increases the variety of products of the shop, and improves the image by acquiring the latest products.

For consumers o Guaranteed product quality. It guarantees that the product is respectful

towards the environment and health and it also assures that the quality of the product is at least as good as the equivalent products without environmental benefits.

o Easy to identify the products with more respect for the environment.

o Are not more expensive than the products without the European Eco-label.

o Low risk of allergies that come from certain chemical products.

Bring in these advantages in your communication and marketing efforts towards new customers and business relation-ships.

Furthermore, it is important to establish strategic partnerships with NGOs willing to support and accompany the company’s efforts towards eco-labelling both in domestic and target countries. Inform your local and national active NGOs on your eco-labelling intentions and efforts. A first step is to identify which NGO is cooperative and willing to work collectively on a company’s and national eco-labelling strategy.


Fig. 27: Footwear retailers /wholesalers in suitable market countries

France

Footwear specialists Non-specialists

Chain stores Buying Groups Small shops Department stores Supermarkets Sport shops Clothing shops Internet/mail order

Groupe Vivarte Tel: + 33 1 44 72 30 01 www.groupe-vivarte.com Groupe Eram www.eram.fr or www.eram.eu

Galleries Lafayette www.groupegalerieslafayette.fr Printemps www.printemps.com/

Carrefour www.carrefour.com E. Leclerc www.e-leclerc.com Auchan Tel: +33 3 20 81 68 00 www.groupe-auchan.com

Décathlon www.decathlon.fr Intersport www.intersport.fr Sport 2000 Tel: +33 1 69 26 20 00 www.sport2000.fr

C&A Tel: +33 1 44 88 79 94 www.c-et-a.fr/ H&M Tel: +33 1 53 20 71 00 www.hm.com/fr Zara Tel: + 33 1 55 78 88 88 www.zara.com

Pinault Printemps Redoute Tel: +33 1 45 64 61 00 www.ppr.com/

Germany



Deichmann Tel: +49 201867600 www.deichmann.de Reno www.reno.de Görtz Tel: +49 40 333 000 www.goertz.de

Garant Schuh & Mode AG Tel: +49 211 3386 01 www.garantschuh.de ANWR Tel: +49 6182 928-0 www.anwr.de

Karstadt (belongs to Arcandor AG) Tel. +49 201 727 1 www.arcandor.com Kaufhof (belongs to Metro) Tel: +49 01805/17 25 17 www. galeria-kaufhof.de

Metro www.metrogroup.de Aldi www.aldi.com

Intersport Tel: +49 7131 288 0 www.intersport.de Sport 2000 www.sport2000-portal.de Runners Point (belongs to Karstadt) Tel: +49 23 61 30030 www.runnerspoint.de

C&A Tel: +49 211 9872 0 www.cunda.de Peek&Cloppenburg www.peek-cloppenburg.de H&M Tel: +49 40 350 95 50 www.hm.com/de

Quelle www.quelle.de Neckermann www.neckermann.de Otto www.Otto.de



Italy



Bata Tel: +39-49-899 1130 www.bata.it

Gruppo Coin SpA Tel: + 39 41 2398341 www.gruppocoin.com Gruppo Rinascente Tel: +39 2 46 77 11 www.rinascente.it

Gruppo Rinascente Tel: +39 2 46 77 11 www.rinascente.it

Intersport Tel: +39 51 6381151 www.intersport.it Giacomelli www.giacomellisport.com Sergio Tacchini Tel: +39 2 4982831 www.sergiotacchini.com

Spain



Fosco Tel: + 34 932 697 700 www.fosco.es Mercalzados (belongs to Gruope Vivarte) Camper www.camper.com

El Corte ingles www.elcorteingles.es

Hipercor SA (belongs to El Corte Ingles) Tel: + 34 91 401 85 00 www.elcorteingles.es Alcampo www.alcampo.es

Intersport www.intersport.es

Zara (belongs to Inditex Group) Tel: +34 981 185 400 www.zara.com Pull&Bear (belongs to Inditex Group) Tel: +34 981 334 900 www.pullbear.com Massimo Dutti (belongs to Inditex Group) Tel: +34 937 667 699 www.massimodutti.com


Scheer (IÖW)

Nove

Roadmap „leather footwear“

mber 2008 page 46 of 56

United Kingdom



C&J Clarks Ldt. www.clarks.com Stylo Plc. www.stylo.co.uk Stead& Simpson Tel: +44 (0)116 269 1300 www.steadandsimpson. com

Marks&Spencer www.marksandspencer.com Woolworth Tel: +44 (0) 20 7262 1222 www.woolworthsgroupplc.com

JJB Sports www.jjbsports.com JD Sports www.jdsports.co.uk Intersport www.intersport.co.uk Blacks LeisureGroup

www.next.co.uk

Tel: +44 (0) 1604 441 111 www.blacksleisure.co.uk

Dorothy Perkins (belongs to Arcadia Group Ltd.) www.dorothyperkins.com Next Plc. Tel: +44 (0) 844 844 8333

Arcadia Group Ltd. Tel: www.arcadiagroup.co.uk


…and current clients of Mexican footwear exports

There are several clients currently importing Mexican footwear from the state of Guanajuato – the main leather production area in Mexico. Tab. 10 gives an overview on the current European companies importing footwear, the corresponding country and type of shoes.

Tab. 10: European business clients of Mexican footwear exports

Company Country Product type

Alvadalejo Spain Formal men’s footwear Frau Italia Formal men’s footwear Buffalo Germany Casual boots Baby Bote France Child shoes Frye USA (with outlets in Germany Casual boots Cuir Country France Western style products Umbría Equitazione Italy Western style products Sarl El Anofe France Casual boots Rio Grande France Casual boots Jalisco Due Italy Casual boots Living Colours Germany Casual boots

Source: personal communication from Mexican project partner

3.3 Networking business relationships – strategic alliances and co-operation

This subchapter informs about suitable European and national markets' business organisations and about important national sector fairs. Use the opportunity to explore the European footwear retail landscape and network with business associations and sector events (e.g. fairs).

3.3.1 Business organisations

In the following we present contact details of national business organisations in the most suitable market countries in order to explore by contacting them business opportunities. On one hand we present associations of footwear manufacturing, on the other associations of footwear merchants.



European Union

CEC – The European Confederation of the Footwear Industry (manufacturer)

CEC is known as the official representative body of the European Footwear Industry. CEC represents national footwear federations of the European Union and also observing countries of Central and Eastern Europe. Currently 15 footwear federations gathering 13.500 footwear manufacturers of the E.U. and 3 observer federations are represented by the European Confederation of the Footwear Industry.

CEC The European Confederation of the Footwear Industry Rue F. Bossaerts 53, 1030 Brussels BELGIUM Tel: +32 27 36 58 10 Fax: +32 27 36 12 76 E-mail: [email protected] Internet: www.cecshoe.be

CEDDEC – European Confederation of the Shoe Retailers Associations

The CEDDEC presents 13 national European Shoe Retailers Associations (12 of them EU countries plus Norway). Since the Homepage is under construction (June 2008), little information on the Confederation is available5.

CEDDEC Boulevard de Magenta 46, F-75010 Paris Contact: Mr. Jean François Bessec Tel.: +33142067930 Fax: +33142065209 E-mail : [email protected]

FAIR Footwear Association of Importers and Retail chains

F.A.I.R. represents the interests of more than 100 EU footwear companies and includes companies such as Colombia (France, USA), Clarks (Great Britain), Deichmann (Germany), Wortmann (Germany), Leder & Schuh (Austria), Skechers (USA) and Vivarte (France). F.A.I.R. members are established in 14 Member States, have a joined turnover of 17 billion and provide direct employment to approximately 90,000 people. On this anti-dumping case, F.A.I.R. members represent about 50% of the concerned imports and have a market share of 30%.

FAIR Footwear Association of Importers and Retail chains www.fair-eu.org President Paul Verrips Tel: +31-6-52658040

5 Note that the following address refers to the French National member. It was chosen because the CEDDEC President is the French National President as well. The contact data may change during summer/autumn 2008 (especially the new Homepage is foreseen to be www.ceddec.org)



France

FFC – Fédération de la Chaussure Francaise (National Association of the French Footwear Manufacturers)

FFC Fédération de la Chaussure Francaise Rue de Miromesnil 51 75008 Paris Tel: +33 144717171 Fax: +33 144710404 E-mail: [email protected] Internet: http://www.chaussuredefrance.com

Germany

Hauptverband der Deutschen Schuhindustrie e.V. (HDS) (National Association of the German Footwear Industry)

The National Association of the German Footwear Industry has 88 members (as of May 2008) from SME´s to global players such as Adidas and Puma.

HDS Hauptverband der Deutschen Schuhindustrie e. V. Waldstrasse 44 63065 Offenbach/Main Tel: +49 69829741-0 Fax: +49 69812810 E-Mail: [email protected] Internet: www.hds-schuh.de

Bundesverband des Deutschen Schuheinzelhandels e.V.(BDSE) (National Association of German Footwear Retailers)

BDSE - Bundesverband des Deutschen Schuheinzelhandels e.V. An Lyskirchen 14 50676 Köln Telefon: (0221) 92 15 09 - 0 Telefax: (0221) 92 15 09 -10 E-Mail: [email protected] Internet: www.bdse.org

Italy

Assciazione Nazionale Calzaturifici Italiani (ANCI) (National Association of Italian Footwear Manufacturers)

A.N.C.I. - The National Association of Italian Footwear Manufacturers - groups together Italian footwear manufacturers. Approximately 1,000 industrial enterprises belong to the Association. The turnover produced by the member companies represents approximately 70% of the overall Italian footwear production.

ANCI Assciazione Nazionale Calzaturifici Italiani Via Monte Rosa, 21 20149 Milan Tel: +39 02438291



Fax: + 39 0248005833 E-mail: [email protected] Internet: http://www.anci-calzature.com/

Ferderazione Natzionale Commercianti Calzature (FEDERCALZATURE) (National Shoe Traders Federation)

FEDERCALZATURE - Ferderazione Natzionale Commercianti Calzature Piazza G.G. Belli 200153 Roma Tel: +39 06.5866345 Fax: +39 06.5812750 E–mail: [email protected] Internet: http://www.federcalzature.it/

Spain

FEDERACION DE INDUSTRIAS DEL CALZADO ESPANOL (FICE) (National Association of the Spanish Footwear Industry)

The Spanish Federation of Footwear Industries (FICE), is the national business organisation that represents the sector's overall interests at both nationally and internationally. It was created 1977 and consists of 12 national member organisations.

FICE FEDERACION DE INDUSTRIAS DEL CALZADO ESPANOL NÚÑEZ de Balboa 116 28006 Madrid Tel: +34 915627003 Fax: + 34 91 562 00 94 E-mail: [email protected] Internet: www.fice.es

United Kingdom

British Footwear Association (BFA)

BFA is a trade association representing British footwear manufacturers and British based footwear brands. Every year in the UK almost £6 billion worth of footwear is sold to consumers and around £0.5bn is exported around the world. It has 73 members.

BFA British Footwear Association 3 Burystead Place Wellingborough NN8 1AH Northants United Kingdom Tel: +44 (0) 1933 229005 Fax: +44 (0) 1933 225009 E-mail: [email protected] Internet: www.britfoot.com



Independent Footwear Retailers Association (IFRA)

IFRA Independent Footwear Retailers Association Independent Footwear Retailers Association Runnymede Malthouse off Hummer Road Egham TW20 9BD Surrey Tel: 0870 330 8620 Fax: 0870 330 8621 E-mail: [email protected] Internet: www.shoeshop.org.uk/

3.3.2 Fairs of suitable markets

MIDEC - Le Salon de la Chaussure

Le Salon de la Chaussure® MIDEC is the only official and professional footwear show in France and takes place twice a year, in January/February and September at the Parc des Expositions at the Porte de Versailles in Paris. Two trade fairs a year are needed to meet all the profession players and to develop your French, European and International key contacts, to be at the fashion rhythm and sales seasons. Le Salon de la Chaussure® MIDEC is the privileged trade event where new designs and new lines are launched. It is the not to be missed meeting point for suppliers and customers. The next show will take place September 6–8, 2008.

MIDEC

rue Royale 6 75008 Paris / France Tel: +33 (0)1 42 44 22 44 Fax: +33 (0)1 42 44 22 45 Internet : www.midec.com E-mail : [email protected]

Ethical Fashion Show

Since its beginning in 2004, the Ethical Fashion Show strives to make ethical fashion more well-known. Ethical fashion is fashion that takes into account economic, human and environmental dimensions all along the production steps of clothes or accessories. With one edition a year, it is sustainable as you can see both spring/summer and fall/winter collections. The next fair will take place in Paris Carousel du Louvre in Paris October 9-12, 2008.

Ethical Fashion Show

Universal Love Office : 4, rue Trousseau 75011 PARIS, France Tél : +33 (0) 1 43 48 94 68 [email protected]

GDS/GLS – International event for Shoes, Leather Good & More

The GDS, the shoe part of this 2-in-1 fair (the other part is the GLS which aims for leather goods) is the biggest fair for shoes in Germany. During spring 2008 there have been some 1400 exhibitors (about 3/4 of them from other countries than Germany) and some 34.000 visitors (roughly 50/50 % Germans and others). The fair is held twice a year in spring and autumn. The next one will take place September 12–14, 2008.

GDS/GLS

Kirchstrasse 61 40474 Düsseldorf / Germany Tel: +49 (0)211 45 60 01 Fax: +49 (0)211 45 60-668 Internet: www.gds-online.com



MICAM – The ShoEvent

ANCI, the National Association of Italian Footwear Manufacturers, has set the dates of the MICAM ShoEvent for 2009. The MICAM ShoEvent is the most prestigious international trade fair dedicated to top- and middle/top-of-the-range footwear. Next year, for the first semester, the fair will take place from Wednesday 4th to Saturday 7th March 2009, while the autumn edition is scheduled to take place from Wednesday 17th to Saturday 20th September 2008. During the last years about 1600 exhibitors (with some 70% of them Italians) and 40.000 visitors (roughly 50/50% Italians and others) came to MICAM. The fair is organised by the ANCI - The National Association of Italian Footwear Manufacturers.

MICAM

Via Monte Rosa, 21 20149 Milan / Italy Tel: +39 (0)2 43 82 91 Fax: +39 (0)2 43 82 92 33 E-mail: segreteria @micamonline.com Internet: [email protected]

Spain:

Modacalzado (+Iberpiel) – Foodwear and leather goods international fair

The Modacalzado fair takes place twice a year (including the smaller Iberpiel fair) in spring and autumn. 2007 some 17.000 visitors (about 80% of them from Spain) and 669 exhibitors (with roughly 3/4 of them from Spain) participated in Modacalzado. The next fair will take place from September 25–27, 2008 in Madrid.

Modacalzado

IFEMA Feria de Madrid 28042 Madrid / Spain Tel: +34 91 722 5300 Fax: +34 91 722 5801 E-mail: [email protected] Internet: www.semanapiel.ifema.es/ferias/

Moda Footwear

This fair takes place twice a year (February & August) and is part of an fair consisting of 4 sections (which are Moda Menswear, Moda Womenswear, Moda Footwear, and Accessories). The next fair will take place August 10–12, 2008 in Birmingham.

Moda Footwear

ITE Moda Ltd, The Old Town Hall, Lewisham Road West Yorkshire HD7 5AL Tel: +44 (0)7917 628973 E-mail: [email protected] Internet: www.moda-uk.co.uk

3.4 Marketing activities The European Commission has carried out a series of general marketing activities intended to contribute to a better knowledge of the EU eco-label and to its broader application by business. An Austrian consultancy has been engaged to carry out some systematic marketing activities. Its report (Scherlofsky 2008) delivers some interesting insights into the promotion of the EU Flower.

Some of the marketing activities and material provided by the European Commission:



Consumer leaflets in many languages6,

Promotional material, especially:

o Logos in all Member States languages,

o Infoposter, EU flower quiz game wheel,

o Roll-up,

o Poster

o Green cards

o national point of sale lists of products available in each country.

There are several strategies and possibilities for manufacturers and future applicants to start marketing activities. European Commission (2008b) mentions three specific and complementary strategies:

GPP: communication on eco-labelled products to green public purchasers.

Care for point of sale promotion: Companies should take care for the promotion of their activities in their retailer‘s shops.

After having received the Flower, companies should start an internal argumentation and lobbying work to integrate the logo and argumentation into the distribution and promotion system, e.g. by initiating an eco-label marketing team.

There are also several marketing measures which could be adopted (European Commission 2008b, 11ff.), they are presented in the following box.

Potential marketing measures to adopt:

PRODUCT & P.O.S Product packaging & the product itself: First of all, use the flower-logo in combination with the written text: “EU Ecolabel”

or “European Ecolabel” (additionally) visibly on your products! It’s always a good idea to mention in the product description that it’s certified with the Flower and what it stands for!

Point of Sale productions: At the P.O.S. people get “in touch” with your products. There, it makes really sense to show that your product bears the Flower! Apply the Flower on all your product racks, dispensers, shelve stoppers and crowners!

Inform your retailers!: This point is of high relevance—inform your buyers that your products have the EU Ecolabel! Motivate them to Include references to the EU Ecolabel in all the catalogues they print themselves. Only through such action will the consumers be able to identify this added-value!

PUBLIC RELATIONS AND ADVERTISING

With the Flower you can draw a “sustainable” picture of your company and products! This requires only that you integrate it into all your company communications, whenever applicable. You can use the Flower practically wherever certified products are mentioned. The following are the most important examples for using the Flower symbol on: Product Brochures: Whenever you produce specific product brochures, try to integrate the EU Ecolabel. Consumers will

be happy to read that their (future) product is also environmentally safe! Company brochures: It’s worth mentioning the Flower in your general company brochures.

6 See: http://ec.europa.eu/environment/ecolabel/marketing/brochures_consumers_en.htm.



Website: It is only a small effort to include the EU Ecolabel in the home page of your website. Take care that the logo is linked to the official website of the European Commission (www.ec.europa.eu/ecolabel). It gives an official impression and convinces visitors on the strong efforts you have set to match all the criteria.

Press work: It’s a smart step to report that you’ve taken a step towards improving our environment. Journalists will be happy to hear about companies doing so! This can include sending out a press release that you’ve obtained the Flower. Or you may consider mentioning it in your next product PR articles or PR events

Advertisements referring to/displaying the Flower: When planning your next advertising campaign you may consider

utilising the Flower as the official “Stamp” that certifies your product(s). This may include displaying the logo in magazine advertisements as well as referring to it. The EU Ecolabel also fits well into TV/radio spots or any other advertising measures you plan to undertake.

Sustainability Report: The yearly sustainability report is a very good place to display the Flower.

FAIRS & PROMOTION EVENTS

They are the perfect place to show your business partners and customers your high environmental sustainability. Many companies like “Lenzing” incorporate the Flower at fairs, with great success.

EMPLOYEE COMMUNICATIONS

Your employees are your potential. Utilise this potential to spread positive messages. Motivate them by telling them that you’re certified. Informal talks to sales persons: Especially your sales persons need to know this as it’s an added value to your products! Company magazine: In case your company issues a regular company magazine, why not write an article containing the

Flower?

Office supplies

Use the logo on your office supplies like envelopes, stationery, pencils etc.

3.5 Final recommendations and strategic proposals The product group leather footwear which has been selected by the Mexican project partners is a promising one. The European footwear market is one of the most essential markets word-wide being at the forefront of design and fashion trends, level of technology and sustainable manufacturing, and showing a considerable market size. In our view, we recommend as most suitable markets:

To consolidate and complete business relationships with Italy, Germany and Spain,

To prepare market access and further develop the French and British market.

Promising sub-products of footwear are:

classic/formal men’s and woman’s footwear in the medium to high price segment,

summer season products (e.g. sandals, slippers, moccasin),

specific niche markets such as safety shoes and/or health shoes,

and customer-related products (child shoes, hiking footwear and boots).



To ease first steps towards suitable market penetration, we have listed detailed information on promising marketing activities, important fairs, relevant retailer companies and business associations. On a strategic level, we recommend to:

Regular scanning and networking the European market: On a regular basis, company and sector representatives should visit relevant European market fairs (e.g. GDS / Düsseldorf; MICAM – The ShoEvent / Milan, Ethical Fashion Show / Paris) exploring the potentials of eco-labelled footwear.

Differentiate your product portfolio that is build shoe ranges based on market research and specific types of shoes. Furthermore, test new shoe products on local and well-known markets. Set up a product line based on eco-parameters certified with the EU Flower.

Setting priorities for European suitable markets: decide which above recommended market best fits your company and product characteristics, contact potential footwear retailers and licensing partners, and search for agents in the relevant countries where intermediary sales support is required and eco-labelled footwear is promising..

Bear the sector’s presentation and image in mind aiming at promoting Mexican leather footwear products as a sustainable footwear supply and use the added-value of eco-labelling opportunities. In the firm based marketing strategy a close link to climate change issues is promising, since climate change issues established on the top-level agenda of politics and society. As it seems, reference to climate change and CO2 reduction efforts is an indispensable must have. The example of Timberland’s Green Index communication on climate impact may inspire.

Project outlook – Developing capabilities to the Mexican eco-label candidates

One of the main barriers for Mexican footwear producers wanting to eco-label their product is the lack of knowledge about how to deal with the criteria, or how to be successful in fulfilling them. Taking this barrier as a serious threat, this UNEP project will spent within its 4-year duration an entire phase to develop capabilities in the companies to be able to obtain the label. Foreseen activities will include capacity building activities to industry, industrial designers and government representatives’ stakeholders, in order to increase companies understanding of the EU eco-label criteria footwear, technical adaptation required to meet the criteria and promotion activities that could support companies in getting the label. Moreover targeted technical assistance activities are foreseen for companies that commit to award their products; international and national experts will support industry representatives in the application process.



4 References Baltico Jordan (no year): no title, (see: http://uploads.batelco.jo/jib/uploads/footwear.pdf)

CBI [Centre for the Promotion of Imports from developing countries] (2004): EU Market Survey 2004 – Footwear, Rotterdam (see: http://www.cbi.eu/marketinfo/cbi/?)

CBI [Centre for the Promotion of Imports from developing countries] (2007): The Footwear Market in the EU, Rotterdam (see: http://www.cbi.eu/marketinfo/cbi/?)

CBI [Centre for the Promotion of Imports from developing countries] (2008): The footwear market in the EU, (see: http://www.cbi.eu/marketinfo/cbi/?)

Cortese, Amy (2007): Products: Friend of Nature? Let's See Those Shoes, in: New Your Times, published March 7, 2007.

EU [European Commission] (2008): Communication from the Commission on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan, COM(2008) 397/3, Brussels,

EU [European Commission] (2008a): Proposal for a Regulation of the European Parliament and of the Council on a Community Ecolabel scheme, COM(2008) 401/3, Brussels.

European Commission (2008b): Marketing Guide for EU Ecolabel companies. How to make the EU Flower visible in your marketing. Brussels: brochure of the European Commission

EU [European Commission] (2007): Eco-label Flower week 2006, (see: http://ec.europa.eu/environment/ecolabel/pdf/studies/eurobarometer_survey.pdf)

EU [European Commission] (2002): COMMISSION DECISION of 18 March 2002 establishing revised ecological criteria for the award of the Community eco-label to footwear and amending Decision 1999/179/EC, Brussels.

Eurobarometer (2008): Attitudes of European citizens towards the environment, Brussels. Junkert, Manfred (2008): Shoe industry comparisons in western European countries –

drawing on the examples of Italy, Spain, Portugal, Great Britain and Germany, Düsseldorf.

Kuckartz, Udo/Rheingans-Heintze, Anke (2006): Trends im Umweltbewusstsein. Wiesbaden: VS Verlag

Kvistgaard Consult (2005): Evaluation of the EU Flower Week – Campaign 2004 – Final Report.

Scherlowsky, A. (2008): EU Ecolabel Marketing for products – interim report, Brussels, (see: http://ec.europa.eu/environment/ecolabel/pdf/marketing/emp_interep_report_08.pdf)


ROADMAP_Footwear_MEXICO Final Version November 30

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