When Glenn Barrett founded his OrthoLite insole company in 1997, the inside of a shoe was “a hot and smelly and sweaty place,” the CEO recalled recently to FN.
“I was introduced to a new material by a chemist in Taiwan — an open-cell breathable PU foam that wicks moisture and we put anti-microbial [features] in it. I figured this is an absolute natural to make it to be an insole,” Barrett said of the company’s origins.
His gamble has certainly paid off. OrthoLite now supplies footwear insoles to more than 350 brands, from athletic giants like Nike and Adidas to fashion players such as Michael Kors, Kenneth Cole and Sam Edelman. And its business continues to grow amid the market-wide shift toward sneakers and comfort-focused footwear.
According to OrthoLite, which as a private firm does not disclose specific numbers, 2021 was the “best year in the company’s history” following more record-setting gains in 2020. That came despite the global supply chain crunch caused by factory shutdowns and shipping and distribution delays.
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Ahead of the company’s 25th anniversary celebration this year, Barrett spoke with FN about the decisions that changed the course of the company and where it can go next.
When you started OrthoLite, did you imagine that it could reach this scale?
Glenn Barrett: “In all honesty, yes. I’d been in the component business for about 20 years before I started this company. And I knew that there was a hole in addressing this part of the shoe. I mean, I’m not going to say I knew that we’d be in probably 550 million pairs of shoes this year. But I knew the application made a whole lot of sense.”
Was there a tipping point that accelerated your growth?
GB: “In the beginning, we bought our formulations from large chemical companies and then processed the material and turned it into cells. But we made a big jump in 2008, when we went vertical and decided to manufacture our own formulations because our suppliers couldn’t keep up with us. Now, we buy 85 different chemicals and we blend them and make all of our own formulations specific to footwear. That made the biggest difference, because it demonstrated to our customers that we were absolutely serious about this business. And by not buying other people’s shelf formulations, we could go deep and develop what was needed. Now we make about 100 different formulations and in different colors. We have two chemical systems houses in China and in Vietnam. And these facilities are 100% owned by our company — we don’t have government joint ventures.”
Today there are a lot more companies making insoles. How do you stay ahead of the competition?
GB: “Constant innovation is really important. You have to innovate all the time to remain relevant, period. For instance, from day one, we put recycled tire rubber into our mixtures. So we’ve always had an eye on this trend toward sustainability and caring about the Earth. And as we’ve developed more materials, we’re always trying to put in more recycled content or higher bio content. One of the drivers for [making our own formulations] was we couldn’t get enough eco-content materials from the large chemical companies. So we started making formulations using castor oil instead of fossil fuel and petroleum. That’s the kind of innovation that’s most important.”
What’s one of the biggest lessons you’ve learned with OrthoLite?
GB: “I learned early on that you have to manufacture close to where your customers make shoes. We started in China, where everybody starts. And then as things migrated to Vietnam, we went there and to Indonesia, and now we’re in India and Spain and Brazil. We’ve got this global scale and customers appreciate that because they can get the same thing wherever they make shoes. That’s a big thing that sets us apart.”
The after-market category has been a focus for many insole makers, but you’ve never played there. Why is that?
GB: “We’re solely focused on being OEM [original equipment manufacturer] suppliers. It doesn’t mean we won’t do it at some point, but I think it’s important to maintain your focus on the thing you do best. We do have a small offering on Amazon because the phone calls [from consumers asking for insoles] just got unwieldy. So you can go on Amazon and buy an insole that we restock there. But it’s generic — it isn’t something that we’re focused on.”
So where do you see the most opportunities for growth?
GB: “Our opportunities are probably in expanding the types of footwear that we’re going into. We started in the athletic shoe business and specifically running. Our first two customers were Asics and Nike. We started there because running is the hardest test of footwear and of your feet, so we figured if we can make our bones in running, then we can grow from there. And we did spread into more athletic shoes, and then into comfort-casual, outdoor, work — all the things that are hardest on your feet. Now, jeez, we’re in brands like Prada and Ferragamo. I’ve never had anybody say to me this shoe is too comfortable. And I guess that message rings true everywhere.”
