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SBD Global/May 23, 2014/People and Pop Culture
Hangin' With... Adidas CEO Herbert Hainer
Published May 23, 2014
On changes in the industry ...
Herbert Hainer: The two biggest changes in the industry I have seen are the following: First, it has become a two-horse race for leadership between the two major competitors. We are both far ahead of all other brands out there and we battle for market leadership in each and every international market and in each and every category. Second, we have successfully widened the appeal of sporting goods. Today, sport shoes and apparel are not only used for doing sports, but are also considered an integral part of a global lifestyle. Thirdly, the emerging markets in Asia, Eastern Europe and Latin America have fostered additional growth for our industry. Thirteen years ago we did almost all of our sales in Western Europe, North America and Japan. Today, China is our second largest market worldwide, and Russia is our largest European market by far. In general, I see all three trends continuing in the foreseeable future. This is why I am very confident about the growth prospects of the sporting goods industry.
On the importance of football ...
Hainer: The World Cup is the perfect stage to showcase our company, our brands and our products. Adidas is the clear number one in football -- in terms of sales, innovative power and brand visibility and in 2014 we will once again underline our leading position. 2014 will be another record year for adidas football. We expect to achieve sales of €2 billion ($2.7B), which is more than any other brand. We will use the World Cup to show fans the innovation, imagination and technological expertise that adidas consistently delivers at the cutting edge of football. In the months leading up to the World Cup, we have launched and will continue to launch a constant stream of exciting, innovative products. Our World Cup products so far have been very well received by our consumers. Sales for the national team jerseys or the official match ball "Brazuca" for example have been significantly higher than in the same time period four years ago. And very soon we will unleash our largest football offensive ever ahead of the 2014 FIFA World Cup with a great focus on social media. Finally, our deal with FIFA is very important to us. Last year we announced the extension of this very successful long-term partnership which grants adidas the official partner, supplier and licensee rights for the FIFA World Cup and all FIFA events until 2030. The contract offers adidas broad licensing and event rights around the FIFA World Cup.
On new markets and sports ...
Hainer: In our strategic business plan Route 2015 we identified basketball and running as two key growth sports categories for adidas. And if you look at running for example, you will see that we are performing very well. 2013 was the third consecutive year of double-digit growth for adidas Running. Last year we launched a revolutionary new midsole material called Boost that we have developed together with chemical giant BASF. And it has been a major hit with retailers and runners alike. We sold 1 million pairs of Boost running shoes last year, this year this will go up to 8 million pairs. In terms of regions, Russia/CIS, China and North America are of key importance for us when it comes to growth potential. China and Russia due to the emerging middle class that has the purchasing power and desire to buy leading global brands. North America remains a priority because it represents 40% of worldwide sporting goods sales and is a market where we are still underrepresented.
On new innovations such as wearable technologies ...
Hainer: I have said it all along -- our industry is driven by innovation. Therefore, innovation will also be key to our success going forward. We will continue to focus on innovations that will help our consumers to be better athletes. This can be through new materials -- such as Boost -- or through new technologies. And yes, of course we will further develop leading wearable technologies such as adidas miCoach that helps athletes to train and perform better.
On who will win the World Cup ...
Hainer: That is of course very hard to predict. I believe that in general the teams from South America will perform very well because they are used to the climate in Brazil. So I wouldn't be surprised to see Argentina in the final, but of course Spain and Germany also have very strong teams. Personally, I would love to see a final between Argentina and Germany or Argentina and Spain, also because this would make it a 100 percent adidas final.