Fjällräven forges a trail in outdoor sustainability

This interview is part of the Inside the Mind of the CEO series, which explores a wide range of critical decisions faced by chief executives around the world.

In 2005, when nature enthusiast Martin Axelhed took over as CEO of Fjällräven—an outdoor clothing and equipment brand known for its iconic Kånken backpack—he brought a lifelong appreciation of nature from a childhood of hiking, skiing, and hunting in the Swedish countryside. During his two decades in the role, his main focus has been integrating the company’s founding principles of ethical environmental stewardship into a modern corporate strategy while driving growth in the often sustainability-challenged apparel industry.

Case in point: the brand made waves by pledging in 2009 to eliminate harmful per- and polyfluoroalkyl substances (PFAS) from its products and supply chain. These “forever chemicals” are persistent and potentially toxic, appearing in everyday items including food packaging and outdoor gear. Axelhed positioned Fjällräven as an industry leader before PFAS emerged as a hot topic (one that is now being tackled by several countries and international bodies such as the European Union).

Fjällräven was founded in 1960 by Åke Nordin in Örnsköldsvik, Sweden, and it has been part of the Fenix Outdoor Group—now helmed by Martin Nordin—since the early 2000s. Total 2023 revenues of the Fenix Outdoor Group, which has nearly 3,000 full-time employees, were €739.4 million (US$794.1 million). Axelhed spoke with strategy+business from his office in Stockholm about delivering on a decade-plus-long strategy to eliminate PFAS, the company’s ongoing commitment to green practices, and why getting way ahead of compliance is smart business.

S+B: Fjällräven owes much of its recognition to the square-shaped Kånken backpack, which the company introduced in 1978. How do you explain its enduring popularity?
AXELHED: The backpack was a solution to a problem at the time: schoolkids were suffering from back pain because they were carrying uneven weight on one shoulder due to shoulder bags. Drawing on his experience in developing trekking backpacks, our founder, Åke Nordin, came up with the Kånken, a backpack with a very simple carrying system, originally designed to fit two A4 binders. The backpack is pretty much the same today as it was in 1978. The Kånken has turned into an icon for people around the world because of its unique design. It has a silhouette that is easy to recognize, but it’s also famous for its functionality and, perhaps more importantly, durability.

S+B: How does the design concept of durability relate to the sustainability that your brand is known for today?
AXELHED: In the past, people made products nature-friendly, even though sustainability wasn’t the buzzword it is today. But durability and functional products have always been key to us. Our main ambition is to make durable products, products that don’t use surface chemicals and are made in the most environmentally responsible way possible. Our products generally have a very long lifespan, and we think making products that people want to use for a long time is key to having a low impact on the environment. In the best-case scenario, people will pass their Fjällräven products on to their children.

S+B: Eliminating PFAS from your products was more than a decade in the making, as you made your initial commitments to phasing them out in 2009. Can you explain your initial motivations behind this decision?
AXELHED: At that time, we found out there were a lot of PFAS added to our fabrics in the manufacturing and sourcing processes. We also found them in the groundwater in one of the production facilities. In the beginning, it was very hard to find the source for these contaminations, as they occurred in production. On top of that, we needed to implement strict control on PFAS in products from our sub-suppliers—such as trims, labels, hang tags, zippers, and pulls. Sometimes PFAS are added somewhere along the supply chain because they speed up or simplify production, while other times they are added for a specific purpose, such as waterproofing or giving the product a softer feeling. But we knew already in 2009 that we wanted no part of it.

S+B: Transitioning away from PFAS involved significant investment and R&D to identify the right alternatives. Could you elaborate on the financial commitment your company made and how this was justified to your stakeholders?
AXELHED: I don’t have a number in terms of what it has cost us. It costs a lot of money and time, and you need to assign people to solve those problems, and work closely with suppliers. Also, by committing to develop fabrics that are free from PFAS, we accepted hits in sales for a certain period because we couldn’t use the materials that were available in the market. At the same time, we were transparent and communicated our losses. And now we can claim we have a setup where we can eliminate PFAS thanks to very cooperative suppliers and partners, which is leading to growth in line with our overarching strategy.

S+B: Did you encounter any internal resistance?
AXELHED: From our employees’ perspective, it can be tough to completely redesign the products they have been accustomed to producing. And we relaunch them knowing that we may encounter new problems. That can take its toll on morale. So, we need to formulate positive future goals and convince people that we do all of this because we believe it’s the only way forward. That kind of commitment is necessary.

From the perspective of the board and owners of the business, there sometimes have been questions about why we faced setbacks. You need that resistance to learn about the potential risks of the changes when you initiate a new project. But, at the same time, we had the support of the majority owner, the same family that founded the company in 1960. They have a long-term agenda, and that means that even though there might be hiccups on this journey, we all know where we want to take the company, which is to become the most sustainable outdoor brand in the world. And sometimes you have to pay the price to achieve that.

S+B: What kind of return on investment do you expect to see?
AXELHED: We haven’t put an exact number on that return, either. Our strategy is guided by a management compass with four cardinal directions: nature and environment, economy and business processes, social responsibility, and well-being. Every time we take a decision at C-suite or board level, all four parts should be considered. We firmly believe that this is the best way to continue to grow as a company and deliver on the expectations of our customers and employees.

S+B: How have you approached marketing and educating your customers about PFAS-free products, whose performance characteristics are different from those of traditional textiles that include PFAS?
AXELHED: Firstly, we developed an alternative to traditional PFAS-based DWR [durable water repellent] treatments in collaboration with our partners over several years. The performance of traditional PFAS-based DWR is fantastic, as PFAS are highly effective at repelling water and dirt. When you replace it with a non-fluorinated DWR, however, you have slightly different properties, and more regular maintenance is required to maintain the water repellency.

In the early stages of launching products made without PFAS, there wasn’t much awareness—people didn’t know or care about it—which made it hard to convince people about the need to phase them out and to accept a garment that needed more care and attention. However, nowadays it’s very well known that PFAS are not good for people, animals, and nature. What’s more, we are a wholesale-driven company and have a strong network of very skilled retailers around the world. They tend to be very environmentally oriented people who can communicate in all our stores around the globe. All of us share that same message—I think that’s very powerful. I also hope this will spill over to other apparel industries in the future.

S+B: How have you integrated your suppliers into this transition?
AXELHED: In our industry, trends come and go, and suppliers tend to adapt to what is trending. Often when you’re developing something out of the current trends, of course you meet resistance, especially when you have requirements that are costly and low volume at the outset. That’s usually when suppliers start panicking. So, have we felt resistance? Yes, for sure. But we have proven that it makes sense, and it pays off at the end of the day.

In the case of eliminating PFAS, many people initially didn’t understand the reason we were doing it. “Why are you trying to adapt to something that no one cares about?” was something we often heard. But it’s our philosophy to be ahead of legislation or what’s trending. We try to see what is coming. And crucially, we have been supporting suppliers during hard times. In return, we ask for favors in good times. In many cases, suppliers have seen that developing new products with us makes them more attractive to other brands.

S+B: How do you identify the next horizon of environmentally friendly initiatives and continue to evolve as a sustainable brand?
AXELHED: We try to carefully choose where and how we manufacture, how we sew, how we pick fabrics. We ask ourselves where we should put our money and resources into developing better alternatives. I come back to the key to the future of apparel, and in particular the outdoor industry: you need to make products that last a very long time. Firstly, if you want people to use products for a lifetime, it’s important that you design products that are easy to repair. It should be easy to change a strap, pull, or zipper. Secondly, many brands can produce durable products, but what is more challenging is to produce them aesthetically in such a way that people will want to continue using them regardless of trend. Timelessness is important—which is difficult in a market that is changing constantly.

S+B: What do you think about trends in circularity, such as distribution models like clothing-as-a-service?
AXELHED: Circularity is interesting, because there has been a lot of talk in the last ten years about reuse and how to use your products in a closed loop. Nowadays, I see a bright future because there are so many strong secondhand platforms. And a brand like Fjällräven is highly rated on secondhand platforms because people can get paid well for our products. It means the product creates a high value for the buyer, and at the end of the day, the product doesn’t just end up in the back of a wardrobe somewhere, but will always be used.

Also, we see a huge interest in rentals of tents and backpacks. A tent is normally purchased only for a weekend, and then it just lies around for the rest of the year, but they can be used all the time. I’m not sure that tents should be sold at all, to be honest. Maybe to a few very enthusiastic specialists, but in general tents should just be circulating. A tent can be used with some maintenance easily for five years in a row. We organize a trekking event every year called Fjällräven Classic and rent out tents to the thousands of participants who go trekking on trails across the globe. We built our tents to be super durable and last for many years. That has been a great success for us, and I think it can be scaled up even further to more locations.

S+B: How do you operate a sustainable brand globally when there is also pressure to operate and source more locally for the benefit of the environment?
AXELHED: I think it’s important to come closer to your biggest markets, to become more local and support the local countries. But there are many components you need to consider. For instance, where do you find your fabrics and trims, and where are they made? We have started up a couple of different initiatives, trying to get closer to local markets, but in some of those areas, the skill set and the availability of fabrics and trims is still limited.

S+B: What advice would you offer to other CEOs looking to make positive contributions to their company or looking to fundamentally reinvent their business model toward sustainability?
AXELHED: One key component for being a brand that wants to become the most sustainable in the world is to not simply create a separate sustainability department. I brought in sustainability as a key strategy for the company from Day One, and we are seeing the effects and improvements.

If you have people who are passionate about sustainability, they will learn by themselves. They will make their own initiatives, and they will drive that change. That’s my strongest recommendation: make sure sustainability is part of the passion employees bring to their jobs, and that it is part of everyone’s daily work. And then make sure that [their efforts] are seen and heard and rewarded when they deliver.