The Next Economy
After Going Public, On Rightly Has Its Head in the Cloud

In the highly competitive running market, there are few brands moving as fast (and grabbing as much market share) as Switzerland-based On.

Founded in 2010, On quickly became a cult favorite athletic footwear and apparel brand thanks to its patented CloudTec cushioning technology and a range of other sustainability efforts literally woven into the fabric of its gear. Fast-forward to 2021 and the brand’s Q3 financial results reported the best month in the company’s history — with net sales up 77 percent through the first nine months of 2021, and DTC sales up a staggering 93 percent. The brand estimates roughly 20 million people now wear its products.

With the momentum from a September 2021 IPO in tow, On’s early commitment to building a more planet-positive pair of shoes seems to be paying dividends at a time when consumer demand for those types of products, especially in footwear, has never been greater.

“Going public didn’t change our sustainability efforts much,” Francois-Xavier Dosne, On’s Head of Innovation Business Strategy, told Sustainable Brands™.

A medium-sized company with large-scale sustainability ambitions

Laurent Vandepaer, On’s Sustainability Performance Lead, speaks of ESG with a sort of forward-looking mindset that feels like one of a much larger apparel company.

“When talking about ‘governance,’ it’s about transparency — the impact of products and where we can reuse them,” he says.

It’s what makes On’s Cyclon subscription service so compelling. On made a sizable bet that consumers would be interested in using a running shoe for a certain amount of time, wearing it out, then exchanging it for something new. Cyclon allows On customers can do just that — if they can just be patient: While On opened the service to customers in early 2020, its first chance to fulfill on it arrives this summer — in the form of the fully recyclable Cloudneo shoe, made from one material family — but Dosne says they already have a waiting customer base “in the five figures.”

Apparently, retailers are also ready to buy into Cyclon. According to Dosne, the day On announced the program, 20 “top retailers” called the company asking how they could be a part of what could be the first viable path to sell something truly circular.

Using IPO funds to fuel sustainability

Dosne says that one of the key objectives of On’s capital raise through the IPO is to focus on a range of impact-related projects.

“Every second or third project at On is sustainability-related,” he says. “It’s pervasive throughout the company.”

Case in point: the development of CleanCloud — a technology developed with partners Borealis and LanzaTech that will yield EVA foam soles made from greenhouse gas emissions literally pulled out of the air. In short, the technology takes carbon emissions produced from an industrial source, ferments those gases into ethanol, dehydrates the ethanol into a usable pellet, then forms those pellets into the foam material.

On is hoping to launch the material, which would replace existing foams on almost all of the company’s shoes, later this year.

Circularity and education

What seems to be propelling On even further is a commitment to understanding and advancing circularity that long predates current conversations about making it happen at a larger level.

“The interesting thing here is not just circularity, but the why behind it,” says Nils Arne Altrogge, On’s Innovation Technology Lead. “At the end of the day, circularity is a tool to learn and make (change) happen.”

Altrogge says it’s just as much about assigning value to a material — not just as a finished product, but to the textile itself — as a way of explaining the concept. Dosne adds that there are significant gaps in understanding circularity as a total concept; and that even extends to On’s internal team, where the sustainability team has had to continue to educate employees about circular concepts.

There are, of course, conversations with the consumer about durability and longevity, wearing something twice as long as you normally would, etc — but the On team thinks its uniquely positioned to have a leading voice in this emerging discussion.

“We have a platform now, but we have to brainstorm to create the right impact,” Altrogge says.