Oliver Brunschwiler | Former CEO of FREITAG

Gabriella Bock: Hello, and welcome back to another episode of the RETHINK Retail Podcast. I’m your host, Gabriella Bock and today, we are joined by my guest Oliver Brunschwiler. Oliver is a board member and former lead link, a title that is basically equivalent to CEO, of Freitag. Freitag is a global brand that creates one-off bags and accessories that are made from used truck tarps and fully compostable textiles. Oliver first joined Freitag in 2014 as the company’s head of brand, before becoming lead link in 2018. By the end of 2021, Oliver decided to distribute most operational roles into a leadership collective so that he could focus on his long-term mission to enable the brand’s potential, unlock sustainable growth, and design its circular business model transformation, certainly no easy task. Thank you so much for joining the show today, Oliver. Oliver Brunschwiler: Thank you for having me, Gabriella. Gabriella Bock: Absolutely. I’m excited to have you on the show. I think Freitag is such a cool company. And side note, back in 2020, so a million years ago, we were in the process of creating a magazine, which we were highlighting some of the best retail stores in the world. We did a whole voting process with our top retail influencers, and your Zurich flagship was voted as one of our top 20 stores in the world. And the magazine was pretty much ready. We had a whole plan in place to launch in March of 2020. So as you can imagine, it was literally the worst time to publish a magazine on in-store shopping experience. But yeah, we’ve been a big fan of the brand. And for our listeners who might not already be familiar with Freitag, it all started out with two brothers and a truck tarp, which is a great origin story. And Oliver, I’m sure you’ve told it a million times, but would you mind just quickly sharing that story with our listeners? Oliver Brunschwiler: Thanks. Always great to hear that Americans actually notice our brand, because we’re actually a global brand, but are mostly in the eastern part of the world and not in the western part of the world. Because our business model has some limitations, we cannot just scale it and call the factory and tell them to produce more. So it’s a very manual process. It’s very complex process. Oliver Brunschwiler: So the company grew out of an apartment by two brothers that shared not just their bloodlines and DNA, but a parallel way of thinking and acting in cycles. For them, sustainability wasn’t really on their mind. That word, to us, is more of a swear word. It’s kind of bad language, because we see a thousand companies greenwashing their services and products with words. So they grew the company. In the first years was very natural because as talented designers, they considered anything that was waste as a design error. It was a progression recycling materials at the time and creating a unique design object that is robust and tailored for bike messengers, which were the new heroes at that time. Interestingly, one of the original test grounds in 1993, when they founded the company in their apartment was San Francisco, because the city was home to some of the first hardcore bike messengers. So free Freitag created the first bike messenger bag, which is now exhibited in Museum of Modern Art in New York City, the permanent [crosstalk 00:04:05]. Gabriella Bock: Oh, fascinating. Oliver Brunschwiler: Yeah. So we are rooted actually, at least in U.S. test ground because bike messengers were born there. But we became a very European country, born out of Zurich, a little big city as we call it here, and grew more into do it to the Eastern world of the world. Gabriella Bock: Wow. Yeah, that’s a fascinating origin story. And so interesting that San Francisco was a testing ground here in the United States. And as you mentioned, bike messaging was wildly popular there in the 90s. And I’m assuming it still is pretty popular there. I actually had a friend who was a bike messenger and he biked all the way from Chicago to San Francisco to work there. And were the brothers themself, are either of them bike messengers? Was this a creation of necessity? Oliver Brunschwiler: Yeah, they were both students. So one of them was a window decorator and the other one was a graphic designer. So they were actually looking for a robust bag to carry around their stuff with them. At that time you had no computers, but a lot of pencils and paper and stuff to glue stuff together. So they needed that robust bag and it was really made for themselves. So it really grew out of the student community. And of course the cheapest transport at that time was cycling. Today the cycling movement stands for sustainability, transforming cities, so that adapts pretty well with the original story and the current situations we’re facing with the transformation of cities. Gabriella Bock: So, were they one of them standing on the road one day and a truck passed by and they were like, “That’s it. That’s the bag.” And how did that come about? Oliver Brunschwiler: That’s it. That’s the founder’s story. There is a so-called hard bridge crossing the city of Zurich. And so one of the brothers saw crossing those trucks and he thought of, “Oh, what’s going to happen with the truck tarp when they don’t use it anymore.” Because he, at that time already considered used materials as more beautiful than new materials. The Japanese actually call this wabi-sabi the beauty of imperfection, or as we call it slightly fucked up. So when we buy used truck tarps even today in couple of hundred tons per year from European transit route transport companies, we like it slightly fucked up. We like the wabi-sabi and this patina which makes these products not shiny, but original. And so, the idea, the design of using something old that is actually nicer than a new material was born on that bridge or an apartment next to the bridge, actually. Gabriella Bock: Wow. That’s a great story. I really enjoyed hearing about the journey of the brothers and how they founded this brand. And you have quite an interesting professional journey as well. So once upon a time before you were a retail executive, you were a professional snowboarder, which I don’t think we come by often. So I would love to hear about what brought you off the slopes and into the C-suite. Oliver Brunschwiler: Great question, Gabriella, thank you for asking that. I’m still on the slopes, because when you live in an Alpine country, the mountains are your backyard. In the late 80s, early 90s, I considered the snowboard boom as a cultural shock. It was a renewal revolution, crashing traditionalists, universal understanding of their Alpine environment with the old man in the mountains, crashing their environment. And we were creators, not followers. Some kind of rebels not accepted to use T-bars and shred the same slope of skiers. So at that time, when trade shows were exploding from the sheer mass of brands that wanted to show of their newest innovations, riding on the wave of a hyper-trend snowboarding, the ski company execs next to our booth were still ties and we hosted parties instead of sales meetings. So that was a really crazy time. Oliver Brunschwiler: In today’s world, we call such a trend disruption that wakes up industry and transforms them. So what brought me off the slopes? I was one of the guys that designed my own products, created my own ads for my sponsors, altering all kinds of opportunities in collaboration. So after a few years, I co-founded one of the first apparel brands that became, at least in Europe and must have for the fast growing sports. So as a matter of fact, entrepreneurship brought me off the mountains. Going first, creating a safe environment for others to grow with a bold vision is what keeps me now going. Gabriella Bock: Wow. At first thought it sounds like quite a leap, but then I can definitely see the parallels between snowboarding and leading a retail brand. As you kind of mentioned, you have to be agile, you have to be able to navigate through unexpected circumstances, trust your instincts. So at Freitag your previous title was lead link, is that correct? Oliver Brunschwiler: Yeah, that’s correct. Yeah. Gabriella Bock: So yeah, so that’s pretty atypical title in the corporate world. And that is because Freitag isn’t a hierarchy based organizational structure. So can you talk a little bit about the holacracy structure that you guys made the transition to and how this style of organization helped shape the company with it? Oliver Brunschwiler: Yes, of course. I think it was 2016 and the company was, because the founders were never those classic executives, they were and remain creatives in their heart, their mind, so they always struggled to lead the company. So they hired COs on different levels and it kind of never worked for them. So in 2016, in a search for a future-proof agile form of organization, looking for an inclusive way, distributing authority and making decision making transparent, looking into flexibility you need in strategic leadership, because as I said before disruption is all over the place, is in these days. You can’t just stick to your old business model anymore. You have to take into account that this can and should change over the years. Oliver Brunschwiler: So we came across holacracy. Overall, it’s a self organization form. In our case, holacracy is designed by Brian Robertson, it’s an American entrepreneur, and it’s a hierarchy of specialists. So the specialist, your specific skills are in the front of the organization form. And so the company is organized in [inaudible 00:11:58], independent circles. Employees in various roles make decisions based on their responsibilities. But just because there’s no traditional management doesn’t mean holacracy does away with hierarchies. It’s absolutely the opposite. Holacracy is deeply hierarchical, but one that constantly revolves around expert roles and current needs. So we can change it from within and not from the outside or from a dictatorship. It’s a hierarchy of specialists. Gabriella Bock: Yeah. So it sounds like the company culture must be extremely purpose driven and is structured in a way that then fosters creativity and innovation. And so then your role, you have to be incredibly tuned into all of the different strengths of your employees and then I’m assuming kind of strategically planning projects kind of based on those strengths. Oliver Brunschwiler: Well, currently I lead in collaborative inclusive manner in my roles. But a couple of months ago, I distributed even more of my accountabilities into a collective leadership team. So what I do is I give trust. That means I distribute every couple of months until there’s actually no old accountabilities left. So then there’s room that new things can grow and you can also grow in them. But for me, no, that’s a personal thing. For me the best ideas were not the hierarchies in general. No matter what organization form you’re using, it’s about the hierarchies of specialists and ideas, and not of given hierarchies. Gabriella Bock: Well, it sounds like Freitag must be a great place to work. And I imagine that leading a company like Freitag sustainability must be an issue that is personally close to your heart. I am wondering, so how have you seen the consumer opinions towards sustainability shift since joining the company back in 2014? Oliver Brunschwiler: In general, since 2014 or 13, we saw rising awareness globally of course. And I was really happy to see that because in 2014 we launched a circular organic material, which we call F-ABRIC that we made clothing out and it’s completely compostable. At that time the story was a fantastic story and it still is a fantastic story, but the awareness to buy into truly circular and sustainable product and service, really thinking consciously about your next step in life, wasn’t really there. So thanks to a younger generation, this created a more sense of urgency because the urgency is now also proved by a lot of people that know about the global environment, even more than we know. So this urgency created a more conscious behavior in buying product and service. And we as a first mover, as a pioneering brand from the 90s, a recycling pioneer, we see people turning to us looking for truly and not greenwashing brands that tackle these issues with their purpose, with their company purpose. Gabriella Bock: Yeah. I love to hear that. And as we’re seeing more consumers then adopt interest in sustainability, placing it higher on their list of priorities, especially among gen Z and millennials, do you feel that Freitag is an example of a sustainable brand that has really grown because of the increased consumer interest and sustainability? Would you say that your growth kind of then parallels the growth of this trend? Oliver Brunschwiler: Yes, exactly. That’s what happens right now. So we are also part of a good wave, but we don’t see ourselves as a fully circular brand. So we created a circular roadmap on strategic level because we don’t see ourselves as where we want to be. Our company purpose reads, “Intelligent design for a circular of future.” So that’s what every employee is aiming for. And everything below this purpose, which starts with strategy, with roadmap. But we’re not there because implementation is hard. Strategy is simple. Implementation is hard. And so even in a competitive environment where we are not because we are unique brand, we don’t have these issues with mass products. We are unique. We have unique products and other issues. But it’s our own competition to reach that goal of this purpose, and that’s tough for us too, but of course we are in the middle of this positive wave. Gabriella Bock: One of my favorite things about 2022 is that we are finally getting back to live person events. And one event RETHINK Retail is especially looking forward to this year is Shoptalk Europe taking place June six through eight at Excel London. Shoptalk Europe is the new home for Europe’s retail and grocery change makers. The event is expected to see over 2,500 decision makers from leading retailers and brands. You’ll also see startups, tech firms and investors, media like RETHINK Retail and analysts from around the world. Yes, we are all coming together to learn, network, collaborate and evolve. The event will host more than 200 industry speakers. And if that wasn’t enough to keep you busy, more than 250 companies will be showcasing the latest trends in innovations that are transforming the global retail sector. Qualifying retailers and brands can attend Shoptalk Europe for free and receive up to a 500 pound travel reimbursement through Shoptalk’s world renowned hosted meeting program. For more information, to see the lineup, or to register your company, shoptalkeurope.com is the place to visit. Again that is shoptalkeurope.com. Gabriella Bock: Yeah, that does sound tough. And especially scaling from a small local shop into a globally recognized brand with consumers all over the world. I’m sure it’s very hard to be fully circular in a global world. It’s kind of a lofty goal at least right now. But I know you guys do have methods and you do rate higher than many other brands, your means of sustainable production. So I would love to hear a little bit about how you’ve been able to scale as sustainably as you have. Oliver Brunschwiler: Well, one of the beauties of the business model is based on the fact that each product is unique, as I said. At the same time, the beast of the business model is buying good, sufficient used truck tarp in the right colors, because that’s not scalable. It’s a manual process with relationships to transport companies, logistic providers, and small shippers. So the organic limitation results and specific demand for fancier colors and designs like black color, gray, pink, but not blue, yellow, and red, because we get sufficient of those colors. So this leads to a strong global collectors markets. So our fans are mostly collectors because it’s really addictive. If you see this one unique piece and you visit stores and you see other same models, but different products, you get addicted. Oliver Brunschwiler: So this again, drives desirability and rareness and as a consequence, every bag out of a couple of hundred thousands per year is a very limited kind of thing. Because other brands they’re creating artificial drops, limited editions since 50 years. And for us, every product is a limited edition. So most brands need to officially limit their availability. For us, limited availability is a natural thing. But, as a brand, if you rely on your product assets alone, you don’t create this breakthrough awareness like Freitag creates in some parts of the world. For example, we never advertised our products, but we communicate because conscious buyers don’t buy the brand. They as you know, buy into the brand. And Freitag is a purpose and value driven brand, so the whole organization is driven by our purpose, intelligent design for a circular future. Because everything can be designed intelligently, not just the product, but also the process, the buying process, the retail store, the manufacturing process. Oliver Brunschwiler: Its intelligent design doesn’t create waste and if you put that in the forefront of a brand, people start to communicate about it and you create natural followers without advertising. As a brand with limited resources, but fully independent, you always have to prove you’re moving first with innovation. But as for marketing, for example, there is a platform we created, we call S.W.A.P., where bag owners and lovers are trading their bags for free. And this is a nonprofit initiative in the name of one of our company values, which says access over ownership. So we don’t have to own everything you can just swap, share. And we actually shut off our store since two years, three years now, when there’s a black Friday, we just say no commerce on these days because we tried to get away from black Friday a couple years ago. And we put our swapping platform instead of our web shop. Gabriella Bock: Oh, I love that. I love that. That’s amazing. Oliver Brunschwiler: So on the other hand, on the analog end of the brand, we push boundaries with retail experiences in some of our store where you create your own unique bag. So mostly made of a used truck leftovers from the production in Zurich are used to create these unique bags. So you have another story using leftovers to produce or create your own product at retail. Gabriella Bock: Yeah. I love to hear that you guys are finding new ways to even further repurpose your materials that will have already been repurposed. And then having it become part of this, just very high touch retail experience. Yeah. That’s really smart. Oliver Brunschwiler: Yeah. I have maybe another example which might be interesting for you. Because you know, we are telling stories of smart recycling when we launch new products usually. For example, there’s B stock airbag material. Every year there are thousands of B stock airbags for cars produced because the industry has such a high quality measurement, of course it’s safety first. They create a lot of zero tolerance waste airbags with just minor faults, which we then buy from them, beautiful technical, robust materials with long life cycles to create something meaningful. So we don’t just use the truck tarp, but we try to use other left over materials from other industry, which are quite scalable. If you only have one sail from one old sailboat, you create 20 bags. So it’s not really scalable. You have to run around quite a lot to find a lot of old sails from sailboats, so it’s not a very huge industry to recycle. So you have to find smart industries, bigger industries, who create a lot of waste, but nice materials and this is what we are also using. Gabriella Bock: Yeah. Yeah. And I love the example you share. Really very, very creative finding a way to repurpose manufacture defects. So very cool stuff there. And I wanted to touch upon the pandemic a bit. And so, you mentioned you guys, you create very limited products and you don’t market. And so maybe this didn’t impact the brand much, or maybe it did, but I’d like to know how the pandemic, if it did at all impact Freitag in terms of sourcing and manufacturing. Did you see any impact there? Oliver Brunschwiler: No, we don’t have the issue of sourcing manufacturing because it’s all based in Europe. The resilience of global supply chain is the topic or was the topic, at least in the fashion industry. For us, this wasn’t the issue because it’s all made and sourced Europe. But we were a retail brand and we had to shift to eCommerce and shifting to eCommerce with unique products, now imagine you can go online and look into freitag.ch. There’s a shop there’s product categories, there’s product pages and you see a product page with 50 products on it. And so you see different colors and now imagine all shops are closing and everybody, all your customers want to go online. So they’re buying the nice colors. So there’s much more traffic online and they’re buying the nice colors. And in order to keep that good picture of a good color mix, you have to constantly curate this page so that the conversion rate doesn’t go down. Oliver Brunschwiler: Because if you only see like blues and reds, the conversion rate goes down. And this was a huge challenge because we’re not, as I said, a mass article brand. If you have a thousand blue jeans in the same color, you just, put another thousand up. It’s the same product. And for us, this was really, really tricky and this took a couple of months. So there, before we were multi-channel we had this multi-channel strategy. And then of course like every other global brand, we had to become a digital first strategy brand. And how do you make sure, the best that is in a period like this are surfacing? Because it’s still about human resilience in probably the most disruptive time in 20 years. Oliver Brunschwiler: Imagine a 25 or even a 35 year… I don’t know how old you are… coworker who has never experienced that kind of disruption. So you really have to stress your flexibility. And because it always went up and you have to change crazy things within months in a business environment. So we had to recalibrate our current strategy and our organization form really helped a lot because it’s agile, it’s self organization. So certain roles were doing that. Then the next day we’re doing that. And probably all global brands face these issues. But I can say now that organization form worked, strategy worked, and even in our case, the tricky part, selling unique pieces online, work now in the long run or longer run. Gabriella Bock: Yeah. That’s really interesting. Yeah, because to your point, I didn’t even really consider how challenging it would be to keep products updated when they’re one of a kind like that. Especially when there are certain colors that are higher in demand. And so you don’t want to be left with a page of just all the wacky experimental colors. So yeah, that’s really interesting. And I did want to know, did you guys see any shifts during the pandemic in the type of items that consumers were purchasing? Were they purchasing messenger bags less because people weren’t really commuting as much at the time or did you see any shifts there? Oliver Brunschwiler: Not really, because as I said, it’s still a collector’s market, so even though people didn’t really travel anymore, the product shift wasn’t there because our portfolio is a very bi-portfolio, or very broad portfolio. And it was the concentration on our classic products like the messenger bags was even stronger because people wanted to have the original and not the next model they created, that we created the last five years. And that was kind of funny. So this concentration on the true old values of this brand in most markets, even in Europe. And so this was pretty funny. But now for me, the pandemic was more, a very positive thing. It created a circular roadmap and now in the middle of creating a new today to change our own future. Gabriella Bock: Hmm, that’s excellent. And you led the company through the pandemic and for the industry as a whole, do you think the pandemic was a catalyst or an obstacle for corporate retail sustainability? Oliver Brunschwiler: Great question. I think it was absolute catalyst. And it was a catalyst also for brands that are not future proof in terms of sustainability strategy. So this really comes into effect now. You see this merging now, post pandemic affects merging with sustainability drive that was created also again within the pandemic. So first there was panic for a lot of people that were really conscious and saying, “Oh, now we have to lose our focus on circularity sustainability because we have other issues.” Other urgent issues. And that was the case in the beginning. But then after year one, all the future proof brands like Patagonia, for example, they came back to their sustainability strategy and they kept going on that. And I think we are also one of these brands. A little slower because we’re European Swiss, but we are on the same, on the right track now. And we, as I said, we created something that wasn’t there before circularity and even stronger circular purpose. We kept going with the self organization form, so the resilience was… Everybody asks for resilience, but yeah, I think we’re future proof now. Gabriella Bock: Well, that’s great to hear it definitely leaves me feeling positive. But I did want to ask, so we know that convenience has become one of the most important, if not the most important factor when it comes to purchase decisions, which was already a growing trend, but it was definitely exacerbated by the pandemic. And I know that the Freitag customer seems to be a consumer that is very, very intentional with their purchases. But for the most part many studies have indicated that the majority of consumers will… They’ll make sustainable purchases when it’s convenient for them. So, I’d love to get your take on how you think retailers should be thinking about this. How can they balance these two preferences? Oliver Brunschwiler: Hmm. Well, we can’t tell people what, where and how to shop. We would love to see more brands that inspire consumers to become users and not just consumers. Our manifest actually answers a lot of these questions. For example, we say we only own objects that last, we repair. We believe in systems designed for compatibility. We prefer access over ownership. It’s actually all on our website. It’s transparent, so everybody can read it. Oliver Brunschwiler: So if you have your own manifesto, your values that drive your brand, probably most people want to work for those brands in these days and not for the other ones. Not for the, sorry, fast fashion brands. And I think of the next generation to come. So the next generation will drive out the pure convenient decision and change that to a holistic decision making process for buyers or users. I mean, I totally get it. We’re not there yet, but that’s why we need inspiring brands. You see them rising. And again, I can say Patagonia is an inspiring brand and you see them rising and you see their numbers. And if you see that, that’s your next investment. That’s your next decision when you’re buying to stuff you might need. You don’t need everything. Gabriella Bock: Yes. Oliver Brunschwiler: So minimal living is a buzzword. It’s a trend. But I think we’re in a transition phase where at least the Western or the mature society will go there, and again, inspire others. So it’s a process. It’s not a trend which happens within two, three, five years. It’s a process that’s going through a whole generation now because you see the urgency at the other end. And it will not be let’s consume less, let’s consume better. Because less is not the right answer to make people feel comfortable or- Gabriella Bock: It’s not as enticing as better, no. Oliver Brunschwiler: Exactly. Exactly. Gabriella Bock: Yeah. I think with consuming, consumption, it’s very much at least here in the United States, it’s a big part of our culture. It’s married into the culture here where the trend cycles they’re shifting rapidly. And I definitely hope to see people moving away from that and adopting, as you mentioned, better consumption practices and maybe riding their bicycle more and carrying their belongings with a Freitag bag. Oliver Brunschwiler: Oh, I think the U.S. will be first. I mean, you see this in technology because technology is one major part to transform societies into a more sustainable world. And you see this hyper trans first happening really, really well, in the U.S. even in farming. We see it in food industry. We see that in the U.S. But it just starts in the Western societies currently and gets adopted really fast by Asian societies. But it’s, as I said, it’s a process. You don’t have to push this and you don’t have to be in a hurry or tell yourself not change tomorrow. Not at all. You have to be safe to change your behaviors or your buying practices. I mean, I just started buying shoes that last now. So, don’t stress yourself as a consumer. Gabriella Bock: Excellent. And Oliver, as we wrap, is there a message you’d like to share with other brands about what it means to truly be a leader in sustainability? Oliver Brunschwiler: Hmm. I’ll make an example. We’re currently building a new retail experience in a very big market. Our team can’t travel there since two years. So it’s all about remote working with the team architects, creatives to create this new retail experience. So for us first it’s you have to trust. You have to trust others because not just the pandemic, but also the disruptive economy created distances. So we have to trust others. That’s maybe the first. Second, total impact, intrinsic motivation in your organization according to a company purpose is something really good for organizations that run brands to the public or to consumers. To become a leader your priorities must be aligned to your purpose. Oliver Brunschwiler: So second, for brands, sustainable brands, or want to become sustainable brands, find your purpose. Find your purpose your organization can follow, your strategy can be aligned to. And maybe third, you need a roadmap because not strategy, but implementation is the hard part. And no matter which industry you are in, in an inclusive organization, you can create an inclusive, ambitious roadmap on a strategic level where people are collaborating to create a meaningful circle or sustainable future. So trust, purpose, roadmap. Gabriella Bock: So grab a map and go find your purpose. Oliver Brunschwiler: Exactly. Gabriella Bock: Well, Oliver, I want to thank you so much for joining the show today. It is evident that you’re a company that’s sustainability goes way beyond the product and is woven throughout the company and culture, which is something that I hope other retailers emulate as we all work to forge a path to a sustainable future. So again, such a pleasure to have you on the show and I look forward to seeing what your brand does next. Oliver Brunschwiler: Thank you very much, Gabriella. Gabriella Bock: Thank you for listening to the RETHINK Retail podcast. That’s this week’s retail rundown. Don’t forget to join us next week for another episode. And if you’re interested in being a guest on the show, apply at rethink.industries/podcastguest. That’s rethink.industries/podcastguest. Follow us on Twitter at rethink_retail and show some love by subscribing reviewing on iTunes podcast app. Until next time.Gabriella Bock: Hello, and welcome back to another episode of the RETHINK Retail Podcast. I’m your host, Gabriella Bock and today, we are joined by my guest Oliver Brunschwiler. Oliver is a board member and former lead link, a title that is basically equivalent to CEO, of Freitag. Freitag is a global brand that creates one-off bags and accessories that are made from used truck tarps and fully compostable textiles. Oliver first joined Freitag in 2014 as the company’s head of brand, before becoming lead link in 2018. By the end of 2021, Oliver decided to distribute most operational roles into a leadership collective so that he could focus on his long-term mission to enable the brand’s potential, unlock sustainable growth, and design its circular business model transformation, certainly no easy task. Thank you so much for joining the show today, Oliver. Oliver Brunschwiler: Thank you for having me, Gabriella. Gabriella Bock: Absolutely. I’m excited to have you on the show. I think Freitag is such a cool company. And side note, back in 2020, so a million years ago, we were in the process of creating a magazine, which we were highlighting some of the best retail stores in the world. We did a whole voting process with our top retail influencers, and your Zurich flagship was voted as one of our top 20 stores in the world. And the magazine was pretty much ready. We had a whole plan in place to launch in March of 2020. So as you can imagine, it was literally the worst time to publish a magazine on in-store shopping experience. But yeah, we’ve been a big fan of the brand. And for our listeners who might not already be familiar with Freitag, it all started out with two brothers and a truck tarp, which is a great origin story. And Oliver, I’m sure you’ve told it a million times, but would you mind just quickly sharing that story with our listeners? Oliver Brunschwiler: Thanks. Always great to hear that Americans actually notice our brand, because we’re actually a global brand, but are mostly in the eastern part of the world and not in the western part of the world. Because our business model has some limitations, we cannot just scale it and call the factory and tell them to produce more. So it’s a very manual process. It’s very complex process. Oliver Brunschwiler: So the company grew out of an apartment by two brothers that shared not just their bloodlines and DNA, but a parallel way of thinking and acting in cycles. For them, sustainability wasn’t really on their mind. That word, to us, is more of a swear word. It’s kind of bad language, because we see a thousand companies greenwashing their services and products with words. So they grew the company. In the first years was very natural because as talented designers, they considered anything that was waste as a design error. It was a progression recycling materials at the time and creating a unique design object that is robust and tailored for bike messengers, which were the new heroes at that time. Interestingly, one of the original test grounds in 1993, when they founded the company in their apartment was San Francisco, because the city was home to some of the first hardcore bike messengers. So free Freitag created the first bike messenger bag, which is now exhibited in Museum of Modern Art in New York City, the permanent [crosstalk 00:04:05]. Gabriella Bock: Oh, fascinating. Oliver Brunschwiler: Yeah. So we are rooted actually, at least in U.S. test ground because bike messengers were born there. But we became a very European country, born out of Zurich, a little big city as we call it here, and grew more into do it to the Eastern world of the world. Gabriella Bock: Wow. Yeah, that’s a fascinating origin story. And so interesting that San Francisco was a testing ground here in the United States. And as you mentioned, bike messaging was wildly popular there in the 90s. And I’m assuming it still is pretty popular there. I actually had a friend who was a bike messenger and he biked all the way from Chicago to San Francisco to work there. And were the brothers themself, are either of them bike messengers? Was this a creation of necessity? Oliver Brunschwiler: Yeah, they were both students. So one of them was a window decorator and the other one was a graphic designer. So they were actually looking for a robust bag to carry around their stuff with them. At that time you had no computers, but a lot of pencils and paper and stuff to glue stuff together. So they needed that robust bag and it was really made for themselves. So it really grew out of the student community. And of course the cheapest transport at that time was cycling. Today the cycling movement stands for sustainability, transforming cities, so that adapts pretty well with the original story and the current situations we’re facing with the transformation of cities. Gabriella Bock: So, were they one of them standing on the road one day and a truck passed by and they were like, “That’s it. That’s the bag.” And how did that come about? Oliver Brunschwiler: That’s it. That’s the founder’s story. There is a so-called hard bridge crossing the city of Zurich. And so one of the brothers saw crossing those trucks and he thought of, “Oh, what’s going to happen with the truck tarp when they don’t use it anymore.” Because he, at that time already considered used materials as more beautiful than new materials. The Japanese actually call this wabi-sabi the beauty of imperfection, or as we call it slightly fucked up. So when we buy used truck tarps even today in couple of hundred tons per year from European transit route transport companies, we like it slightly fucked up. We like the wabi-sabi and this patina which makes these products not shiny, but original. And so, the idea, the design of using something old that is actually nicer than a new material was born on that bridge or an apartment next to the bridge, actually. Gabriella Bock: Wow. That’s a great story. I really enjoyed hearing about the journey of the brothers and how they founded this brand. And you have quite an interesting professional journey as well. So once upon a time before you were a retail executive, you were a professional snowboarder, which I don’t think we come by often. So I would love to hear about what brought you off the slopes and into the C-suite. Oliver Brunschwiler: Great question, Gabriella, thank you for asking that. I’m still on the slopes, because when you live in an Alpine country, the mountains are your backyard. In the late 80s, early 90s, I considered the snowboard boom as a cultural shock. It was a renewal revolution, crashing traditionalists, universal understanding of their Alpine environment with the old man in the mountains, crashing their environment. And we were creators, not followers. Some kind of rebels not accepted to use T-bars and shred the same slope of skiers. So at that time, when trade shows were exploding from the sheer mass of brands that wanted to show of their newest innovations, riding on the wave of a hyper-trend snowboarding, the ski company execs next to our booth were still ties and we hosted parties instead of sales meetings. So that was a really crazy time. Oliver Brunschwiler: In today’s world, we call such a trend disruption that wakes up industry and transforms them. So what brought me off the slopes? I was one of the guys that designed my own products, created my own ads for my sponsors, altering all kinds of opportunities in collaboration. So after a few years, I co-founded one of the first apparel brands that became, at least in Europe and must have for the fast growing sports. So as a matter of fact, entrepreneurship brought me off the mountains. Going first, creating a safe environment for others to grow with a bold vision is what keeps me now going. Gabriella Bock: Wow. At first thought it sounds like quite a leap, but then I can definitely see the parallels between snowboarding and leading a retail brand. As you kind of mentioned, you have to be agile, you have to be able to navigate through unexpected circumstances, trust your instincts. So at Freitag your previous title was lead link, is that correct? Oliver Brunschwiler: Yeah, that’s correct. Yeah. Gabriella Bock: So yeah, so that’s pretty atypical title in the corporate world. And that is because Freitag isn’t a hierarchy based organizational structure. So can you talk a little bit about the holacracy structure that you guys made the transition to and how this style of organization helped shape the company with it? Oliver Brunschwiler: Yes, of course. I think it was 2016 and the company was, because the founders were never those classic executives, they were and remain creatives in their heart, their mind, so they always struggled to lead the company. So they hired COs on different levels and it kind of never worked for them. So in 2016, in a search for a future-proof agile form of organization, looking for an inclusive way, distributing authority and making decision making transparent, looking into flexibility you need in strategic leadership, because as I said before disruption is all over the place, is in these days. You can’t just stick to your old business model anymore. You have to take into account that this can and should change over the years. Oliver Brunschwiler: So we came across holacracy. Overall, it’s a self organization form. In our case, holacracy is designed by Brian Robertson, it’s an American entrepreneur, and it’s a hierarchy of specialists. So the specialist, your specific skills are in the front of the organization form. And so the company is organized in [inaudible 00:11:58], independent circles. Employees in various roles make decisions based on their responsibilities. But just because there’s no traditional management doesn’t mean holacracy does away with hierarchies. It’s absolutely the opposite. Holacracy is deeply hierarchical, but one that constantly revolves around expert roles and current needs. So we can change it from within and not from the outside or from a dictatorship. It’s a hierarchy of specialists. Gabriella Bock: Yeah. So it sounds like the company culture must be extremely purpose driven and is structured in a way that then fosters creativity and innovation. And so then your role, you have to be incredibly tuned into all of the different strengths of your employees and then I’m assuming kind of strategically planning projects kind of based on those strengths. Oliver Brunschwiler: Well, currently I lead in collaborative inclusive manner in my roles. But a couple of months ago, I distributed even more of my accountabilities into a collective leadership team. So what I do is I give trust. That means I distribute every couple of months until there’s actually no old accountabilities left. So then there’s room that new things can grow and you can also grow in them. But for me, no, that’s a personal thing. For me the best ideas were not the hierarchies in general. No matter what organization form you’re using, it’s about the hierarchies of specialists and ideas, and not of given hierarchies. Gabriella Bock: Well, it sounds like Freitag must be a great place to work. And I imagine that leading a company like Freitag sustainability must be an issue that is personally close to your heart. I am wondering, so how have you seen the consumer opinions towards sustainability shift since joining the company back in 2014? Oliver Brunschwiler: In general, since 2014 or 13, we saw rising awareness globally of course. And I was really happy to see that because in 2014 we launched a circular organic material, which we call F-ABRIC that we made clothing out and it’s completely compostable. At that time the story was a fantastic story and it still is a fantastic story, but the awareness to buy into truly circular and sustainable product and service, really thinking consciously about your next step in life, wasn’t really there. So thanks to a younger generation, this created a more sense of urgency because the urgency is now also proved by a lot of people that know about the global environment, even more than we know. So this urgency created a more conscious behavior in buying product and service. And we as a first mover, as a pioneering brand from the 90s, a recycling pioneer, we see people turning to us looking for truly and not greenwashing brands that tackle these issues with their purpose, with their company purpose. Gabriella Bock: Yeah. I love to hear that. And as we’re seeing more consumers then adopt interest in sustainability, placing it higher on their list of priorities, especially among gen Z and millennials, do you feel that Freitag is an example of a sustainable brand that has really grown because of the increased consumer interest and sustainability? Would you say that your growth kind of then parallels the growth of this trend? Oliver Brunschwiler: Yes, exactly. That’s what happens right now. So we are also part of a good wave, but we don’t see ourselves as a fully circular brand. So we created a circular roadmap on strategic level because we don’t see ourselves as where we want to be. Our company purpose reads, “Intelligent design for a circular of future.” So that’s what every employee is aiming for. And everything below this purpose, which starts with strategy, with roadmap. But we’re not there because implementation is hard. Strategy is simple. Implementation is hard. And so even in a competitive environment where we are not because we are unique brand, we don’t have these issues with mass products. We are unique. We have unique products and other issues. But it’s our own competition to reach that goal of this purpose, and that’s tough for us too, but of course we are in the middle of this positive wave. Gabriella Bock: One of my favorite things about 2022 is that we are finally getting back to live person events. And one event RETHINK Retail is especially looking forward to this year is Shoptalk Europe taking place June six through eight at Excel London. Shoptalk Europe is the new home for Europe’s retail and grocery change makers. The event is expected to see over 2,500 decision makers from leading retailers and brands. You’ll also see startups, tech firms and investors, media like RETHINK Retail and analysts from around the world. Yes, we are all coming together to learn, network, collaborate and evolve. The event will host more than 200 industry speakers. And if that wasn’t enough to keep you busy, more than 250 companies will be showcasing the latest trends in innovations that are transforming the global retail sector. Qualifying retailers and brands can attend Shoptalk Europe for free and receive up to a 500 pound travel reimbursement through Shoptalk’s world renowned hosted meeting program. For more information, to see the lineup, or to register your company, shoptalkeurope.com is the place to visit. Again that is shoptalkeurope.com. Gabriella Bock: Yeah, that does sound tough. And especially scaling from a small local shop into a globally recognized brand with consumers all over the world. I’m sure it’s very hard to be fully circular in a global world. It’s kind of a lofty goal at least right now. But I know you guys do have methods and you do rate higher than many other brands, your means of sustainable production. So I would love to hear a little bit about how you’ve been able to scale as sustainably as you have. Oliver Brunschwiler: Well, one of the beauties of the business model is based on the fact that each product is unique, as I said. At the same time, the beast of the business model is buying good, sufficient used truck tarp in the right colors, because that’s not scalable. It’s a manual process with relationships to transport companies, logistic providers, and small shippers. So the organic limitation results and specific demand for fancier colors and designs like black color, gray, pink, but not blue, yellow, and red, because we get sufficient of those colors. So this leads to a strong global collectors markets. So our fans are mostly collectors because it’s really addictive. If you see this one unique piece and you visit stores and you see other same models, but different products, you get addicted. Oliver Brunschwiler: So this again, drives desirability and rareness and as a consequence, every bag out of a couple of hundred thousands per year is a very limited kind of thing. Because other brands they’re creating artificial drops, limited editions since 50 years. And for us, every product is a limited edition. So most brands need to officially limit their availability. For us, limited availability is a natural thing. But, as a brand, if you rely on your product assets alone, you don’t create this breakthrough awareness like Freitag creates in some parts of the world. For example, we never advertised our products, but we communicate because conscious buyers don’t buy the brand. They as you know, buy into the brand. And Freitag is a purpose and value driven brand, so the whole organization is driven by our purpose, intelligent design for a circular future. Because everything can be designed intelligently, not just the product, but also the process, the buying process, the retail store, the manufacturing process. Oliver Brunschwiler: Its intelligent design doesn’t create waste and if you put that in the forefront of a brand, people start to communicate about it and you create natural followers without advertising. As a brand with limited resources, but fully independent, you always have to prove you’re moving first with innovation. But as for marketing, for example, there is a platform we created, we call S.W.A.P., where bag owners and lovers are trading their bags for free. And this is a nonprofit initiative in the name of one of our company values, which says access over ownership. So we don’t have to own everything you can just swap, share. And we actually shut off our store since two years, three years now, when there’s a black Friday, we just say no commerce on these days because we tried to get away from black Friday a couple years ago. And we put our swapping platform instead of our web shop. Gabriella Bock: Oh, I love that. I love that. That’s amazing. Oliver Brunschwiler: So on the other hand, on the analog end of the brand, we push boundaries with retail experiences in some of our store where you create your own unique bag. So mostly made of a used truck leftovers from the production in Zurich are used to create these unique bags. So you have another story using leftovers to produce or create your own product at retail. Gabriella Bock: Yeah. I love to hear that you guys are finding new ways to even further repurpose your materials that will have already been repurposed. And then having it become part of this, just very high touch retail experience. Yeah. That’s really smart. Oliver Brunschwiler: Yeah. I have maybe another example which might be interesting for you. Because you know, we are telling stories of smart recycling when we launch new products usually. For example, there’s B stock airbag material. Every year there are thousands of B stock airbags for cars produced because the industry has such a high quality measurement, of course it’s safety first. They create a lot of zero tolerance waste airbags with just minor faults, which we then buy from them, beautiful technical, robust materials with long life cycles to create something meaningful. So we don’t just use the truck tarp, but we try to use other left over materials from other industry, which are quite scalable. If you only have one sail from one old sailboat, you create 20 bags. So it’s not really scalable. You have to run around quite a lot to find a lot of old sails from sailboats, so it’s not a very huge industry to recycle. So you have to find smart industries, bigger industries, who create a lot of waste, but nice materials and this is what we are also using. Gabriella Bock: Yeah. Yeah. And I love the example you share. Really very, very creative finding a way to repurpose manufacture defects. So very cool stuff there. And I wanted to touch upon the pandemic a bit. And so, you mentioned you guys, you create very limited products and you don’t market. And so maybe this didn’t impact the brand much, or maybe it did, but I’d like to know how the pandemic, if it did at all impact Freitag in terms of sourcing and manufacturing. Did you see any impact there? Oliver Brunschwiler: No, we don’t have the issue of sourcing manufacturing because it’s all based in Europe. The resilience of global supply chain is the topic or was the topic, at least in the fashion industry. For us, this wasn’t the issue because it’s all made and sourced Europe. But we were a retail brand and we had to shift to eCommerce and shifting to eCommerce with unique products, now imagine you can go online and look into freitag.ch. There’s a shop there’s product categories, there’s product pages and you see a product page with 50 products on it. And so you see different colors and now imagine all shops are closing and everybody, all your customers want to go online. So they’re buying the nice colors. So there’s much more traffic online and they’re buying the nice colors. And in order to keep that good picture of a good color mix, you have to constantly curate this page so that the conversion rate doesn’t go down. Oliver Brunschwiler: Because if you only see like blues and reds, the conversion rate goes down. And this was a huge challenge because we’re not, as I said, a mass article brand. If you have a thousand blue jeans in the same color, you just, put another thousand up. It’s the same product. And for us, this was really, really tricky and this took a couple of months. So there, before we were multi-channel we had this multi-channel strategy. And then of course like every other global brand, we had to become a digital first strategy brand. And how do you make sure, the best that is in a period like this are surfacing? Because it’s still about human resilience in probably the most disruptive time in 20 years. Oliver Brunschwiler: Imagine a 25 or even a 35 year… I don’t know how old you are… coworker who has never experienced that kind of disruption. So you really have to stress your flexibility. And because it always went up and you have to change crazy things within months in a business environment. So we had to recalibrate our current strategy and our organization form really helped a lot because it’s agile, it’s self organization. So certain roles were doing that. Then the next day we’re doing that. And probably all global brands face these issues. But I can say now that organization form worked, strategy worked, and even in our case, the tricky part, selling unique pieces online, work now in the long run or longer run. Gabriella Bock: Yeah. That’s really interesting. Yeah, because to your point, I didn’t even really consider how challenging it would be to keep products updated when they’re one of a kind like that. Especially when there are certain colors that are higher in demand. And so you don’t want to be left with a page of just all the wacky experimental colors. So yeah, that’s really interesting. And I did want to know, did you guys see any shifts during the pandemic in the type of items that consumers were purchasing? Were they purchasing messenger bags less because people weren’t really commuting as much at the time or did you see any shifts there? Oliver Brunschwiler: Not really, because as I said, it’s still a collector’s market, so even though people didn’t really travel anymore, the product shift wasn’t there because our portfolio is a very bi-portfolio, or very broad portfolio. And it was the concentration on our classic products like the messenger bags was even stronger because people wanted to have the original and not the next model they created, that we created the last five years. And that was kind of funny. So this concentration on the true old values of this brand in most markets, even in Europe. And so this was pretty funny. But now for me, the pandemic was more, a very positive thing. It created a circular roadmap and now in the middle of creating a new today to change our own future. Gabriella Bock: Hmm, that’s excellent. And you led the company through the pandemic and for the industry as a whole, do you think the pandemic was a catalyst or an obstacle for corporate retail sustainability? Oliver Brunschwiler: Great question. I think it was absolute catalyst. And it was a catalyst also for brands that are not future proof in terms of sustainability strategy. So this really comes into effect now. You see this merging now, post pandemic affects merging with sustainability drive that was created also again within the pandemic. So first there was panic for a lot of people that were really conscious and saying, “Oh, now we have to lose our focus on circularity sustainability because we have other issues.” Other urgent issues. And that was the case in the beginning. But then after year one, all the future proof brands like Patagonia, for example, they came back to their sustainability strategy and they kept going on that. And I think we are also one of these brands. A little slower because we’re European Swiss, but we are on the same, on the right track now. And we, as I said, we created something that wasn’t there before circularity and even stronger circular purpose. We kept going with the self organization form, so the resilience was… Everybody asks for resilience, but yeah, I think we’re future proof now. Gabriella Bock: Well, that’s great to hear it definitely leaves me feeling positive. But I did want to ask, so we know that convenience has become one of the most important, if not the most important factor when it comes to purchase decisions, which was already a growing trend, but it was definitely exacerbated by the pandemic. And I know that the Freitag customer seems to be a consumer that is very, very intentional with their purchases. But for the most part many studies have indicated that the majority of consumers will… They’ll make sustainable purchases when it’s convenient for them. So, I’d love to get your take on how you think retailers should be thinking about this. How can they balance these two preferences? Oliver Brunschwiler: Hmm. Well, we can’t tell people what, where and how to shop. We would love to see more brands that inspire consumers to become users and not just consumers. Our manifest actually answers a lot of these questions. For example, we say we only own objects that last, we repair. We believe in systems designed for compatibility. We prefer access over ownership. It’s actually all on our website. It’s transparent, so everybody can read it. Oliver Brunschwiler: So if you have your own manifesto, your values that drive your brand, probably most people want to work for those brands in these days and not for the other ones. Not for the, sorry, fast fashion brands. And I think of the next generation to come. So the next generation will drive out the pure convenient decision and change that to a holistic decision making process for buyers or users. I mean, I totally get it. We’re not there yet, but that’s why we need inspiring brands. You see them rising. And again, I can say Patagonia is an inspiring brand and you see them rising and you see their numbers. And if you see that, that’s your next investment. That’s your next decision when you’re buying to stuff you might need. You don’t need everything. Gabriella Bock: Yes. Oliver Brunschwiler: So minimal living is a buzzword. It’s a trend. But I think we’re in a transition phase where at least the Western or the mature society will go there, and again, inspire others. So it’s a process. It’s not a trend which happens within two, three, five years. It’s a process that’s going through a whole generation now because you see the urgency at the other end. And it will not be let’s consume less, let’s consume better. Because less is not the right answer to make people feel comfortable or- Gabriella Bock: It’s not as enticing as better, no. Oliver Brunschwiler: Exactly. Exactly. Gabriella Bock: Yeah. I think with consuming, consumption, it’s very much at least here in the United States, it’s a big part of our culture. It’s married into the culture here where the trend cycles they’re shifting rapidly. And I definitely hope to see people moving away from that and adopting, as you mentioned, better consumption practices and maybe riding their bicycle more and carrying their belongings with a Freitag bag. Oliver Brunschwiler: Oh, I think the U.S. will be first. I mean, you see this in technology because technology is one major part to transform societies into a more sustainable world. And you see this hyper trans first happening really, really well, in the U.S. even in farming. We see it in food industry. We see that in the U.S. But it just starts in the Western societies currently and gets adopted really fast by Asian societies. But it’s, as I said, it’s a process. You don’t have to push this and you don’t have to be in a hurry or tell yourself not change tomorrow. Not at all. You have to be safe to change your behaviors or your buying practices. I mean, I just started buying shoes that last now. So, don’t stress yourself as a consumer. Gabriella Bock: Excellent. And Oliver, as we wrap, is there a message you’d like to share with other brands about what it means to truly be a leader in sustainability? Oliver Brunschwiler: Hmm. I’ll make an example. We’re currently building a new retail experience in a very big market. Our team can’t travel there since two years. So it’s all about remote working with the team architects, creatives to create this new retail experience. So for us first it’s you have to trust. You have to trust others because not just the pandemic, but also the disruptive economy created distances. So we have to trust others. That’s maybe the first. Second, total impact, intrinsic motivation in your organization according to a company purpose is something really good for organizations that run brands to the public or to consumers. To become a leader your priorities must be aligned to your purpose. Oliver Brunschwiler: So second, for brands, sustainable brands, or want to become sustainable brands, find your purpose. Find your purpose your organization can follow, your strategy can be aligned to. And maybe third, you need a roadmap because not strategy, but implementation is the hard part. And no matter which industry you are in, in an inclusive organization, you can create an inclusive, ambitious roadmap on a strategic level where people are collaborating to create a meaningful circle or sustainable future. So trust, purpose, roadmap. Gabriella Bock: So grab a map and go find your purpose. Oliver Brunschwiler: Exactly. Gabriella Bock: Well, Oliver, I want to thank you so much for joining the show today. It is evident that you’re a company that’s sustainability goes way beyond the product and is woven throughout the company and culture, which is something that I hope other retailers emulate as we all work to forge a path to a sustainable future. So again, such a pleasure to have you on the show and I look forward to seeing what your brand does next. Oliver Brunschwiler: Thank you very much, Gabriella. Gabriella Bock: Thank you for listening to the RETHINK Retail podcast. That’s this week’s retail rundown. Don’t forget to join us next week for another episode. And if you’re interested in being a guest on the show, apply at rethink.industries/podcastguest. That’s rethink.industries/podcastguest. Follow us on Twitter at rethink_retail and show some love by subscribing reviewing on iTunes podcast app. Until next time.