Interest in Made in USA Footwear Is Growing, But Is It Enough to Overcome Persisting Challenges?

Political leaders from both sides of the aisle gathered last week at the opening of a New Balance factory in Methuen, Mass., celebrating economic growth in the region.

“By expanding its footprint in the Merrimack Valley, New Balance is affirming its status as a cornerstone Massachusetts-based company, building on its strong history of producing products and creating jobs here in the Commonwealth,” said Gov. Charlie Baker.

New Balance’s new 80,000-square-foot facility in Methuen marks its fifth U.S. footwear factory. The building underwent a $20 million renovation and now employs over 90 people, tasked with producing the brand’s popular Made 990v5 running

Now should be the perfect time for footwear brands to double down on domestic manufacturing. Port congestion, resource shortages and factory shutdowns abroad have had huge and costly impacts on the product-to-market process for footwear over the past two years.

“The recent COVID crisis and the reliance on overseas supply chains has demonstrated, frankly, we need to find a better solution,” Colin Browne, Under Armour COO and outgoing chair of the American Apparel and Footwear Association, told FN at AAFA’s Executive Summit in March. “The last thing we want to do is [continue] taking goods and shipping halfway across the world — that’s not very sustainable.”

However, as has been the case for decades, producing in the U.S. remains challenging, and the requirements are getting tougher.

For New Balance, domestic manufacturing has always been core to its business, even as other footwear brands diversified production overseas. As the largest athletic footwear maker with factories in the U.S., the company said it largely managed to avoid global supply chain disruptions over the last two years, thanks to its domestic capabilities. And the company is continuing to invest in its Made in USA division, which is now overseen by buzzy creative director Teddy Santis of Aimé Leon Dore.

COO Dave Wheeler told FN, “We continue to see significant U.S. and global consumer demand for the craftsmanship, heritage styling and innovative designs of all our footwear.”

Other footwear brands have doubled down on domestic manufacturing as well. Last year, Keen announced it would increase its Portland, Ore., production by 26% after seeing strong demand for its “American Built” work boots and hikers. And Weinbrenner Shoe Co. acquired a third factory in Merrill, Wis., in 2021 as demand for its boots skyrocketed.

Similarly, Kamik, which makes more than half of its products in North America — at plants in Quebec and Ontario in Canada and in New Hampshire in the U.S. — also reported seeing a surge in demand for locally made products.

American manufacturing continues to get support from Washington, D.C. Soon after taking office last year, President Joe Biden issued an executive order encouraging people to “Buy American.” The order also clarified that goods purchased with taxpayer money must be composed of 75% U.S.-made content as opposed to the previous 55%, essentially revising the definition of “Made in the USA” products.

That goal won’t be easy to achieve.

Kamik CEO Gillian Meek explained there are limitations for manufacturing solely in North America.

“Not every component of our footwear can be made [here], whether that be based on skill, cost or accessibility limitations,” she said. Meek noted Kamik has considered shifting production when it is too difficult to make products domestically. But true to its heritage, the company’s manufacturing strength has consistently been strongest in North America, especially as more consumers seek out “locally made” products.

Even New Balance, an outspoken champion of American craftsmanship, does not source every part of its shoes in the States. Its Made footwear line has a domestic value of 70% or more, with materials sourced across the U.S. as well as globally. Perhaps as a testament to the consumer interest in local manufacturing, a class-action lawsuit was brought against New Balance late last year, alleging that the company’s “Made in USA” marketing was misleading because 30% of the shoe is not produced in America.

Biden’s executive order appears aimed at resolving that issue. That is, to “close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences,” read a statement from the White House.
When announcing the Methuen factory opening, New Balance noted it was “working to innovate and expand its domestic supplier network” for the Made collections.

Overall, footwear manufacturing is still largely a global process. Roughly 99% of all shoes sold in the U.S. in 2020 were imported from overseas, primarily China and Vietnam, which remain the top two producers, according to the Footwear
Distributors and Retailers of America.

“Footwear has never been the poster child for the potential reintroduction of domestic production for consumer goods,” explained Matt Priest, president and CEO of FDRA. “It’s labor intensive, it takes a lot of materials and takes a lot of
infrastructure. It takes a willing workforce, and none of those things exist here in our country anymore.” Instead, he said, America’s manufacturing economy is largely focused on higher-priced items like airplanes, semiconductors, heavy
machinery and automobiles.

Finding skilled workers remains a longstanding challenge for U.S. footwear manufacturers that has only increased in recent years. “The effect of the pandemic has made it that much harder to find the skilled hands needed to build our quality footwear,” said Meek.

To recruit staff, Weinbrenner said last year it would attend more job fairs and partner with local high schools and trade schools to create apprenticeship programs and train the next generation of shoemakers.

In other words, there are many reasons a brand might not want to shift production entirely to the U.S. However, recent complications in the global supply chain have made it clear that some amount of change is still necessary.

Less dramatic than shifting entirely to the U.S., some brands have explored moving their manufacturing processes closer to home, to regions like South America. Doing so lessens a brand’s dependence on ocean travel and helps avoid costly airfreight fees to ship products from countries like Vietnam, China and Cambodia.

Steve Madden was an early example this shift. CEO and chairman Edward Rosenfeld said in February that the company had moved about half of its women’s production from China to Mexico and Brazil for fall ’21, with plans to continue the trend in 2022.

Despite the challenges of making footwear in the U.S., many homegrown brands remain committed to local manufacturing and to the value of quality American craftsmanship that has become crucial to their brand identities.

Allen Edmonds, the Caleres-owned leader in U.S. men’s luxury footwear, has been making over half of its shoes in Port Washington, Wis., since 1922. Even as other U.S. companies shifted production offshore, the brand has held on to its American roots.

“Made in America is the foundation of the brand,” said Allen Edmonds SVP and GM David Law, who highlighted a consumer demand for American craftsmanship. Like New Balance’s Wheeler, Law said that having factories in the U.S. has helped the brand grow its “competitive advantage” with regard to brand identity, design, quality and service.

Kamik’s Meek echoed that sentiment, referring to benefits like supporting a local economy and having the ability to easily travel to facilities and directly oversee commitments for sustainability.

“There are huge advantages to manufacturing in North America,” she said.

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