Allbirds was founded as part of a suite of corporations funded via Kickstarter such as Warby Parker, and has based its corporate identity on sustainability. Since the 2020s, the company has been criticized by legal scholars for "greenwashing" after a case about their reporting of carbon offsets was dismissed. Allbirds went public on November 3, 2021, but experienced poor sales soon afterwards; leading to a reworking of the company's C-suite from 2022 to 2024. On April 8, 2024, the company received a non-compliance notice from Nasdaq for performing below $1 for over 30 consecutive days.
Tim Brown, co-founder of Allbirds, developed the idea as vice captain of the New Zealand national football team.[2][3] Brown had shoemaking experience from his business-school days, when he made shoes for friends.[4] In 2014, he received a research grant from the New Zealand wool industry to engineer a sneaker.[5] The grant was made during a period of reduced demand for Merino wool due to the rise of recycled polypropylene and a lack of industry representation.[6] Brown launched his idea on Kickstarter, raising US$119,000 (equivalent to $200,000 in 2023) in five days.[7][8] After the Kickstarter launch, he teamed up with Joey Zwillinger, a biotech engineer and renewable-materials expert who had sold algae fuel.[9] They launched Allbirds in March 2016.[7][10] The name "Allbirds" references New Zealand's lack of native land mammals, making it a land of "all birds."[2]
The company began with one product: Wool Runners casual sneakers.[11] During its first year in business, Allbirds raised US$7.25 million from investors who included Maveron and Lerer Hippeau Ventures.[12][13] Some of the company's early publicity is credited to articles in publications such as Time and The New York Times by Bloomberg's Jordyn Holman and Matthew Townsend.[14]
By the end of 2017, Allbirds expanded across the United States and into South Korea and Australia.[4][15] In October 2018, after previous fundraisers, the company raised US$50 million in Series C funding (investment that startup companies typically receive to grow after proven success); bringing the company's total valuation to US$1.4 billion.[16] Allbirds expanded into other footwear (including running shoes and flip-flops) and athleisure clothing in collaboration with Outdoor Voices and Nordstrom.[17] Further collaborations were coordinated with Adidas and independent designers such as Nicole McLaughlin through 2021.[18][19]
The company began offering its shoes to brick-and-mortar stores in the United States in 2017.[20] Allbirds opened its first store in the United Kingdom on October 17, 2018, in London's Covent Garden.[21]
By 2020, the company had raised US$1,000,000 (equivalent to $1,177,318 in 2023) in Series E funding and had 21 retail stores worldwide.[22] Before its initial public offering in 2021, Allbirds raised over $200 million.[23]Forbes contributor David Trainer believed that the company was overvalued at $2 billion, suggesting $119 million due to market competition and difficulties in business scaling.[24]
2021–present (as of 2024): Public offering
Allbirds went public on the Nasdaq on November 3, 2021, with the ticker symbol BIRD at a price of US$12–$14.[25] That year, the company removed a line that it was "the first 'sustainable' IPO" from its listing after pressure from the Securities and Exchange Commission (SEC).[26] A month before the IPO, Allbirds reduced its references to "sustainability principles and objectives" by half.[27] The company lost US$25,900,000 against US$2,190,000 of revenue the previous year, which Zwillinger said was in pursuit of a sustainable business model.[28] Allbirds leaned further into its brand as sustainable by collaborating with Adidas to create a sneaker "that promises to have almost no carbon footprint" and by focusing on environmental impact in its advertising.[14]
According to a GlobalData consumer panel, the company began a decline in annual sales by 2022 as its brand was seen as part of 2010s Silicon Valley attire and its shoes' lack of durability became better known.[29][30] Other brands, such as Atoms and Veja, were claimed to be taking some of Allbirds' market share as early as 2020 in a Wall Street Journal article by Jacob Gallagher.[31] The 2022 release of the Tree Flyer ended a period of experimentation with the company's offerings, including leggings, jackets, and dresses, which were unpopular with its customer base. The Financial Times' Lauren Indvik criticized Allbirds' new clothes, such as cardigans and other sweaters, as overly simple.[32]
Complaints about the shoes' lack of durability also increased, and division between the company's co-CEOs about consumer-audience vision emerged. Brown believed that younger customers would drive sales, which conflicted with Zwillinger's view;[33] as a result, Zwillinger was named chief executive officer and Brown was demoted to chief innovation officer. The company then returned to a focus on sustainable shoes.[34] To recover from the loss in sales and investor confidence, the company began to sell its products at big-box, brick and mortarNordstrom and Dick's Sporting Goods stores between April and June 2022.[35]
By the fourth quarter of 2023, Allbirds had a quarterly net-revenue decrease of 14.5 percent.[36] The group of companies with which Allbirds went public, including Casper Sleep and Warby Parker, was noted by Bloomberg News' Olivia Rockeman as all having struggled as public companies. Rockeman placed Allbirds among other companies using online commerce who were shifting from independent sales platforms to aggregate retail platforms such as Amazon for increased visibility: "Others remain private, but face slowing growth and few potential buyers. Firms are also abandoning the go-it-alone approach and selling through retailers, including Allbirds getting into REI and Nordstrom."[37]
On March 12, 2024, Zwillinger was replaced by former Allbirds chief operating officer Joe Vernachio as CEO.[38][39] Vernachio outlined plans to focus on already-successful products rather than experimenting with new ones, and said that the company would rely on its retail partners.[40] Zwillinger remained on the board of directors. Other C-Suite members were promoted internally or replaced by external hires, marking a change in the company's corporate structure. Earlier that year, the company promoted Kelly Olmstead to chief marketing officer and recruited Adrian Nyman as chief design officer.[41][42]Chief financial officer Mike Bufano was succeeded by Annie Mitchell on April 24, 2023.[43]
On April 8, 2024, Allbirds received a non-compliance notice from Nasdaq because its share price was $1 for 30 consecutive days.[44] Through August of that year, the company discussed a reverse stock split to maintain its listing with investors. Allbirds underwent a 1-for-20 consolidation on September 4, 2024; its stock price was $9.69 the next day and $13.79 after a week.[45][46] The company began to downsize its plans to open more physical stores in countries such as Germany at this time.[47][48]
Corporate affairs
Litigation
Allbirds sued Steve Madden in December 2017, alleging that the company's Traveler shoes looked nearly identical to its Wool Runners and infringed Allbirds' trade dress.[49] The lawsuit, in the Northern District of California, was quickly settled and Allbirds brought a similar lawsuit in the same court against Austrian footwear maker Giesswein Walkwaren.[50] In November 2019, Zwillinger accused Amazon's 206 Collective of producing a look-alike of the Wool Runner design for nearly half the price.[51] The company did not bring Amazon to court, which Zwillinger called "risky" in reference to Amazon's large legal teams.[52] Later that week, Zwillinger and Brown wrote a Medium article inviting Amazon to use some of its materials to "jointly make a major dent in the fight against climate change."[53] The case with Amazon was cited as an example of the company's willingness to lose money in the name of sustainability by reporter Sasha Rogelberg.[44]
Allbirds was the subject of a 2021 federal lawsuit, Dwyer v. Allbirds, Inc., in the Southern District of New York accusing the company of misleading consumers about its sustainability practices by not mentioning the carbon impact of its wool sourcing. The Higg Material Sustainability Index that Allbirds used to measure its carbon impact measures the impact of individual products rather than their supply chain, omitting the impacts of shipping and production. The plaintiff accused Allbirds of false advertising by using images of happy sheep in promotional materials, rather than images of production facilities.[54] Judge Cathy Seibel dismissed the case in 2022 on the grounds that the company adheres to the Federal Trade Commission's Guides for the Use of Environmental Marketing Claims, and depictions of happy sheep in advertising were puffery.[55][56]
The company was sued by its shareholders in May 2023 amidst declining sales. The lawsuit was filed as Allbirds tried to diversify from footwear to other products, a strategy with lower core consumer interest.[57][33] The shareholders alleged that this was misleading, leading investors to buy shares at artificially-inflated prices and constituting securities fraud.[58] Judge Araceli Martínez-Olguín dismissed the case without prejudice in May 2024, and the plaintiffs filed an amended complaint which the company again sought to dismiss on grounds which included lack of standing.[59]
Allbirds uses SweetFoam, a material made of recycled sugarcane, instead of the petroleum-based industry standard ethylene-vinyl acetate for the soles of its shoes.[66] The company's production of sugarcane is certified by the nonprofit environmental-verification organization Proforest as ensuring environmental security.[67] SweetFoam sugarcane is sourced from Brazil and produced by Braskem as a byproduct of ethanol production.[68]
Praised by Time as one of the best inventions of 2018 for its carbon reduction,[69]Runner's World's Jeff Dengate wrote reviews of the Tree Dasher 2 and Tree Flyer in 2022 and 2023. Dengate liked the shoes' environmental goals and casual fit, but criticized their soles, grip, and weight.[70] The Tree Flyer was "slightly lighter and bouncier than the Dasher 2, thanks to a new foam made from castor bean oil" (improving its usability for running), but found the shoe's cushioning and heel-stitching worse than traditional running shoes.[71] Dengate called the Dasher 2 too heavy, although it was 0.3 ounces (8.5 g) lighter than the Dasher.[70]
Silicon Valley and fashion
The Wall Street Journal and The New York Times reported that Allbirds initially became popular among tech-industry professionals, particularly in Silicon Valley. The brand's minimalist, logo-free design and eco-friendly wool fabric resonated with the tech community, leading to popular adoption of Allbirds as an unofficial uniform among American "tech bros."[4][31] Some observers have used the shoes to critique Silicon Valley's influence on corporate culture in the United States. A New Yorker article by Rachel Syme said that the shoes "cannot really be categorized as ugly footwear, because the idea behind them is not proud unstylishness but technical perfection."[72] Syme links the shoes to the increased presence of casual wear in the white-collar workforce, where sneakers have gained acceptance over traditional dress shoes. A white-collar worker might then signify their values and differentiate themselves from colleagues by engaging in conspicuous consumption, buying shoes with an environmental mission.[72]New York Times critic Jon Caramanica called Allbirds shoes "studiously unstylish," connecting the shoes' utility and the occupations of their wearers by saying that they are "for people who poke around in the code on the websites they visit, and who would prefer not to think too hard about their footwear choices."[73]
Journalism professor Myles Ethan Lascity describes the shoes' sustainable framing as "anti-fashion," referring to a style of dress that is indifferent to trends in fashion. Lascity ties Allbirds' anti-fashion identity to Uniqlo, which he said promotes itself as a technology brand rather than a clothing company. In Allbirds' case, the company frames itself as a sustainability brand rather than a shoe company.[74]
Other observers, such as Ian Servantes of Inverse, critiqued the shoes for gentrifying the sneaker market historically associated with Black culture in the United States.[75] Servantes said that the shoes' appeal to stereotypically affluent, white Silicon Valley workers lacks authenticity in the sneaker subculture.[76]
US Congressman Jared Huffman speaking at Allbirds in San Francisco in 2020
Greenwashing
Legal analysts have criticized Allbirds in light of Dwyer v. Allbirds, Inc. for alleged greenwashing: appearing environmentally friendly for promotional purposes while failing to deliver on sustainable promises.[56][77] In the University of Kentucky's Journal of Equine, Agriculture, & Natural Resources Law blog, Abigail Barford wrote that although demands for corporate transparency have increased, few standards have been implemented at the governmental level. Barford noted that environmental, social, and governance guidelines are often used in marketing an IPO, as she alleged Allbirds did during and after the Dwyer case.[78]
Ciara Peacock of the West Virginia University College of Law writes about the case in a discussion of American courts' tendencies to give corporate carbon offsets and credits a high bar for legal criticism, noting that cases charging corporations with unrealistic use of carbon offsets (such as Dwyer) overwhelmingly end in motions to dismiss.[79] In Dwyer, Peacock wrote that there is no consistent legal precedent for when a company should begin to measure carbon output; this allows corporations to publicize incomplete depictions of their supply chains.[79] Fellow legal scholar Valerie J. Peterson said that Allbirds excludes wool manufacturing from its life-cycle assessments, which measure the environmental impact of a product or service from production to destruction.[80] Christopher Marquis of Fast Company disagreed, crediting the company for maintaining near-term and transparent goals by contrasting them with other, more-opaque companies such as Delta Air Lines and Keurig.[81]
Former United States President Barack Obama has worn the shoes on a number of occasions, and a 2019 Esquire article reported that he wore a pair at a basketball game.[89] After Obama wore the shoes at a podcast recording in 2020, Cam Wolf wrote an article for GQ criticizing the shoes as "Zoom Formal" and linked him and his cabinet to Silicon Valley.[90]
^Bowles, Nellie (August 12, 2017). "Silicon Valley's Fuzzy Fad". The New York Times: B1(L)–B1(L). Retrieved July 20, 2024. Mr. Zwillinger, an engineer in biotechnology, was working in Silicon Valley and struggling to sell algae oil as a replacement for petroleum.
^Sorkin, Andrew Ross; Karaian, Jason; Kessler, Sarah; Merced, Michael J. de la; Hirsch, Lauren; Livni, Ephrat (April 28, 2021). "Consumer Brands Eye Public Markets". The New York Times. ISSN0362-4331. Retrieved June 9, 2024.
^Abel, Katie (April 30, 2018). "Taking Flight: Sometimes it takes a team of outsiders to breakin [sic]. How Allbirds is defying tradition and writing a powerful new brand story". Footwear News. 74 (14).
