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Twenty years after two enterprising Frenchmen travelled to Brazil to meet organic cotton producers and wild rubber tappers on a quest to launch their own specialist trainer brand, Veja is on the verge of a new trajectory.
From 22 February, Veja’s European customers will be able to buy exclusive colourways of the brand’s bestselling V-90 style produced in a new location: a factory in Portugal. The creation of a European supply chain, specifically to serve the European market, marks the first time Veja products have been made outside of Brazil.
“Between 2015 and today, we’ve reached a saturation point in our Brazilian factories,” says Veja co-founder Sébastien Kopp, who started the brand with childhood friend François-Ghislain Morillion. “We are also continuously growing, so it was natural to look for a new production hub, [and] we quickly came up with the idea of ‘made in Europe, sold in Europe’ — producing pairs in Europe, and selling them in Europe only.”
The project echoes moves to diversify supply chains via nearshoring across all levels of the footwear and apparel sector. These include Nordstrom moving private label volume production to Guatemala, Benetton shifting a proportion of its manufacturing away from China to Turkey, Serbia and Egypt, and Mango putting more weight behind its proximity supply chain in Turkey and Morocco. Per McKinsey, nearly two-thirds of fashion executives are considering creating new manufacturing hubs dedicated to serving US and European demand.
For Veja, the idea of manufacturing in Portugal (first floated in 2020) came quickly enough, but the process of bringing it into reality has been “very long”, notes Kopp. A shared language with Brazil and its geographical location made Portugal a natural choice, as well as its centuries-old shoemaking expertise. Its footwear industry employs 40,000 and makes for the likes of Birkenstock, Ganni and Timberland. In 2022, exports from the Portuguese footwear industry topped €2 billion in value, a record figure that surged 20 per cent on the previous year, according to the Portuguese Footwear, Components and Leather Goods Manufacturers’ Association (APICCAPS).
While the move to Portugal is hugely significant, it’s a measured step. Veja produces approximately four million pairs of shoes annually. Since production began in Portugal in January 2023, its supplier, Samba Footwear, has produced around 80,000 pairs. Samba’s other customers include Axel Arigato, Boss and Gant.
A cautious first step
Vogue Business visited Samba in January to understand how the Veja partnership is evolving. Three months of development work preceded production of the first Portuguese V-90s, explains Samba’s quality assurance manager Ana Fontão. Veja expects shoes to be material tested (for factors including strength and durability) by batch or every week — Samba usually tests annually. During development and sampling, a quality-control test devised specifically for Veja involves 15 or so factory employees picked at random to wear-test the shoes for 15 days.
Family-run Samba, founded in 1973, is based in Felgueiras, a municipality of Porto District and the self-proclaimed capital of footwear, home to a thriving network of manufacturers. “I’d say at least two-thirds of the population here are related to footwear. Either they work in a shoe factory, or they work in components that are related to footwear,” says Samba business director Rui Oliveira.
Veja is also now sourcing materials from Europe, including Leather Working Group (LWG) gold-certified leather from Portugal and Italy (and potentially Spain in the future). Unlike its South American supply chain, which Veja knows down to the fine details, its Portuguese leather supply chain is still a work in progress in terms of transparency. The slaughterhouses and farms are not yet mapped, says Kopp. As a consequence, the brand is leaning more heavily on the certification factor, opening up the brand to multiple unknowns, particularly at the pre-tannery level that covers key issues such as welfare and deforestation. “Veja’s sourcing team is actively working on engaging [the LWG] to ensure complete traceability of the entire supply chain,” says Kopp. It’s also working with Portuguese suppliers to “develop new materials that can be sourced and used domestically to decrease… dependence on imported materials from Brazil”, he says.
Among the benefits of a local supply chain are agile and responsive production, reduced transportation costs and reduced time to market. The brand says some materials — like Amazonian rubber and organic cotton — cannot be substituted and are delivered by ship. Veja says it has yet to establish the precise impact of a locally made product that relies heavily on imported materials, but is planning to calculate the carbon dioxide impact.
The de-risking factor
Also high on the list of benefits is de-risking — reducing the risks of working with certain countries.
For example, some brands have sought to reduce their reliance on Chinese manufacturing after the impact of Covid lockdowns, supply chain slowdowns and concerns about Xinjiang cotton. For Veja, China — and more broadly Asia — was never on the cards, despite the heavier costs of factories in Europe.
But Europe is not necessarily risk-free. “If you do a risk assessment at face value, what most companies do is look at the country and see there’s collective bargaining, very strong workers’ rights, very strong unions, and say it’s low risk. It can cause laziness and can reduce your positive impact,” says Luke Smitham, senior manager at management consultancy Kumi.
Decisions should be context-based rather than country-based, Smitham says, and must take into account specific factors such as who runs the factory, what the labour force profile is, how local regulations are enforced and how traceable the supply chain is.
The Portuguese footwear industry has many markers of a low-risk manufacturing environment. Fewer migrant workers in the supply chain inherently reduces the associated risks and vulnerabilities (such as coercion and exploitation of workers), while the multiplicity of family-run and locally owned factories come with an ingrained understanding of local culture and expectations, according to Smitham.
What does responsible onboarding look like?
Veja’s requirements for Samba include a government watchdog analysis for the chemical safety of trainers and annual Smeta (Sedex Members Ethical Trade Audit) Four Pillar audits, which cover labour standards, health and safety, management systems, entitlement to work, subcontracting and home working, environmental assessment and business ethics.
The standard Smeta process includes on-site visits, documentation reviews, management reviews, worker interviews and the creation of a final report shared with site management that’s uploaded onto the Sedex platform. The methodology behind Smeta is not limited by geography or sector, a Sedex spokesperson says, and is measured against the ETI (Ethical Trading Initiative) Base Code and local law.
So, how effective are audits? “Audits don’t minimise risk,” Smitham says. “They provide a snapshot of a single factory on a single day.” Smitham recommends strategies such as in-depth risk assessments performed on site (covering country risk, sector risk and supplier risk), and using other brands sourcing from the same factory as a benchmark (particularly if they list well on the likes of KnowTheChain or Corporate Human Rights Benchmark).
Informal strategies can also help. Veja encourages a constant chain of communication between its facilities in Portugal and Brazil. Staff at the head office in Paris can take free Portuguese lessons, a step that helps to maintain strong communication with suppliers. Veja has added an in-house quality controller on site at Samba, while its team visits regularly.
At the factory in Portugal
The working day at Samba is attuned to Portuguese lifestyles. There’s a two-hour lunch break, which allows workers to return home to eat with family or run errands.
The workforce is full of experienced people. Filipe Alferes works on the manual cutting machine, cutting the individual components of the trainer from large pieces of leather. He has been in this role for five years, but has worked in the industry for 30 (he started at the age of 13, now illegal). Maria Rosa, who has worked in the industry for 17 years, operates a sewing machine stitching the lace hole panel onto the main body of the trainer upper, finishing between 200 and 300 units a day. More than 200 hands can touch one pair of V-90s throughout the 50 or so processes it takes to assemble and make over 40 components.
Despite a surge in Portuguese footwear exports, the economic climate remains tough. Samba makes 550,000 pairs of shoes a year, compared with 850,000 in 2022. “We are working more based on quality than based on price, and based more on a very quick turnaround of prototyping and sampling,” says Oliveira. “We can take decisions faster, and all of this — combined with good technique, good experience, good human resources and good partnerships — will for sure be a successful story.”
APICCAPS says the Portuguese industry will invest €600 million (a mixture of public funds and money from the EU’s Recovery and Resilience Facility) by the end of the decade in innovation, sustainability, the qualification of companies and workers and internationalisation. Veja’s Kopp is confident that the brand’s new operations in Portugal will complement its Brazilian sourcing set-up for many years to come. “Creating a supply chain in Portugal will not change or replace the link between Veja and Brazil at all,” he says. “It’s completing it.”
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Correction: The name of Samba's business director is Rui Oliveira, not Rui Alexander as previously reported. (6 February 2023)
