Why big is bad for today's consumers, we meet the founder of American Giant
Producing American-made apparel, with products both sourced and manufactured in North and South Carolina, American Giant have tripled their business each year since launching in 2012. Armed with an iPhone and tripod, Mark Barden, west coast partner at eatbigfish visits their offices in San Francisco for an exclusive interview with the founder and CEO, Bayard Winthrop. We hear Bayard explain how in this 'post-amazon' world, opportunities are opening up for new challengers with strong belief systems everywhere.
Tell us a bit about your background?
I grew up in the 70s at a time when there was still the heyday of great American brands and great American products. I was raised by my mom and I remember really clearly her buying me some iconic pieces of clothing; a pair of Levis, a Champion sweatshirt. And as a kid, I remember those moments as being pretty transformative. So no longer wearing corduroys but wearing Levis. I grew up, I became pretty focused on securing her and me financially and that looked like getting into corporate finance and so I focused on that early on and put all my energy into getting that job on Wall Street and when I got there I almost immediately realised it was wrong for me.
It was the wrong fit, even though I’d spent five years trying to get that job. I’d found myself much more sort of enamoured with the brands we were talking to than I was with the advisory work itself. I was way more inspired by the founders and business stories than I was with trying to figure out how to raise $100M from debt. So I left the bank and moved to San Francisco with a vague idea that I wanted to get involved in a brand. I knew I wanted to have a physical product, I didn’t want to be doing something that was consulting or anything. And I was lucky enough to find a job that became the first of many consumer product companies that I would run. But I always felt that these brands had lost their soul... so I had this idea of building a brand that stood for something and that meant something to me. American Giant fell out of that.
What was the opportunity you saw for a US-made brand?
I was running a business here in San Francisco that had a great founding story attached to it. It was committed to a high quality product and was made in the US and we were busy trying to grow that brand by expanding its distribution mechanisms and expanding its product offering. And in order to do all those things, we were doing everything we could to drive margin. That meant, chipping away at that quality foundation, moving manufacturing to Asia and outsourcing so that we could afford to pay for these other things that would allow us to scale. While we were in the middle of that I was really struck by the fact that I felt consumers were shifting way more rapidly I think than brands appreciated. In the beginning I was seeing that in the form of farmers markets, microbreweries, the craft coffee movement and artisan manufacturing and all these things that I interpreted as consumers almost revolting against what was becoming increasingly mass marketplace. It was consumers saying, quality matters to me, transparency matters to me, I want to know who’s making my stuff. I felt that shift was happening very quickly and really profoundly. And I became convinced that that consumer shift, was fundamental enough that you could really launch a business that said we’re going to put great product and great values first and use that as a way to drive awareness and commitment to the brand.
What personal beliefs have helped shape the brand?
Like it or not, when you enter into a category like apparel or sweatshirts, massive categories with the biggest bullies on the block all around you, you sort of marinate in that idea of being a challenger brand, and so I went into my initial brainstorming about the brand positioning, with this sense of dissatisfaction and rejection of the status quo in the apparel industry. I felt like the retail space was broken, that the value proposition was broken, and that the narrative around American manufacturing was broken.
Brands had fallen into this trap where they were asking customers to make exceptions for American made products, either really poor quality or really high retail prices. And I felt that was a false choice and that brands ought to be innovative enough to deliver great products at a good price. That whole idea of coming in and being nimble and almost punk rock in that point of view, was a fundamental in starting the business. It’s what gave us the confidence to start the business, in a lot of ways.
How has the brand identity driven strategic choices?
The order for us is values first, right, and so what do we believe as a business? What do we stand for as a business? So quality is part of that, rejecting that preconceived notion of the US made apparel industry is part of that. And when you create that filter, the product has got to go through that. So for us that distils down into material and fabric choices and how you price product in the marketplace and all those things. So product is a big part of our identity, but I think it really starts really with the value system here that’s shared by everybody in the company, about what we’re trying to do.
How has the cultural landscape changed for consumers?
You and I grew up at a time where, or at least our parents anyway, had all of these institutional lash points, right, that there was. There was the corporation you worked for for your entire life, there was Wall Street - the centre of capitalism, there was government that was basically out to help and be a source of good, there was your local church or synagogue that was going to take care of you and provide social grounding.
Consumers today, all of those lash points have been broken. The church is filled with scandals, Wall Street is corrupt, big corporations like Enron, they’re out to screw you, government’s a mess, media you can’t trust. So there’s been this one piece now which is this sort of punk rock quality of rejecting all those things, but it doesn’t have that kind of nihilistic quality that maybe we had… when we were younger, it was only piss off, right. For younger consumers today, if you put the word big in front of anything, that’s bad. Big pharma, big business, whatever it is. This group of consumers, there’s this rejection of the status quo and the big, coupled with this unbridled optimism and sense that, I can go do that now, I can go change whatever I want to go focus on. That kind of change maker quality is incredibly exciting.
What opportunities does this new world provide for challengers today?
This is the best time to be launching and starting brands that I’ve ever seen in my career, it is the golden age for the consumer and for brands. We’re seeing this incredible moment, the sort of post-Amazon period where Amazon’s going to suck up a huge part of the marketplace but I think there are opportunities emerging everywhere for brands and e-commerce business that is just fascinating. From a consumer standpoint I believe there’s an emerging group of consumers today who are voting with their spend and brands are emerging as a result of that. It’s a fantastic kind of social study and we're very optimistic about American manufacturing because we think that customers are voting much more and much more consciously than they were in the past. This little guy is connected to all of these things around quality, craft and transparency that are opening up great change and opportunity in the market. And for the brands that get that relationship building, and do that well, the pace of growth can be just staggering.