by Luke Hickman
May 19, 2017
While consumers have embraced the look and feel of knitted shoes, footwear companies have become excited about the possibilities the new process provides.
Boasting a sleek, athletic appearance and sock-like comfort, knitted uppers have become increasingly popular among consumers since Nike and Adidas first introduced their respective products, Flyknit and Primeknit, in 2012. The success of these styles has driven other footwear companies to develop their own similar products, such as Skechers’ Skech-Knit and GOknit, Puma’s evoKNIT, and Reebok’s Ultraknit.
While the style and comfort of these new knitted uppers has captivated consumers, the method of their production has excited footwear companies the most. Conventional athletic shoes require the assembly of the shoe’s upper from parts cut from bulk materials and glued or sewn together, a labor-intensive process that creates a significant amount of waste. Knit uppers, on the other hand, require only as much yarn as is needed to make the upper and are fashioned by a machine. As a result, this process offers producers reduced costs and production time, and also allows more opportunities for personalization.
Beginning in the 1980s, footwear manufacturing establishments began moving overseas to take advantage of cheap labor in countries such as China and Vietnam. Today, despite steep US tariffs on footwear, often around 20% for athletic types, nearly all of US athletic footwear demand is met by imports.
However, the capabilities offered by knit upper technology suggest the possibility of an eventual shift away from this arrangement. While current technology still requires manual labor to attach the upper to the midsole, footwear companies are working to eliminate that step as well. A manufacturing process that involves little to no manual labor would allow footwear companies to move production closer to their larger markets, reducing or eliminating the costs of shipping and tariffs.
In August 2016, Adidas announced that it was planning to open a new footwear production site, which they are calling a Speedfactory, in Atlanta, Georgia towards the end of 2017. Adidas has already launched a Speedfactory in Germany, and the shoes it has produced there incorporate a Primeknit upper. Adidas says it plans to make 50,000 pairs of shoes at its Atlanta Speedfactory in 2017 and eventually ramp production up to 500,000 pairs annually.
For more insights into the US athletic footwear market, see Athletic Footwear: United States, a report recently released by the Freedoina Focus Reports division of The Freedonia Group. This report forecasts US athletic footwear demand in US dollars at the manufacturers’ level to 2021. Total demand is segmented by upper material in terms of:
Related Freedonia Focus Reports include Footwear: United States, Apparel: United States, and Rubber: United States.
Luke Hickman is a Market Research Analyst for Freedonia Focus Reports. He holds a degree in economics, and his experience as an analyst covers multiple industries.
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