Chaco

An innovative geo exchange heating and cooling system was included at the new Chaco facility at an additional cost of $30,000, and has already paid for itself.

In the early days, a pair of Chaco sandals came sans box, held together by a rubber band. Not surprisingly, this method didn’t go over well with retailers. Currently Chaco packaging uses close to 100 percent recycled content.

To date, the Chaco team in Paonia has been able to beat the “landed cost” of assembling their core performance sandals in China. Knutson attributes this to the simplicity of the product, and the experience and work ethic of their employees.

How many of those wonderfully resoleable Chaco sandals are actually returned to Paonia for new soles? Surprisingly, less than one percent. Knutson is considering a shoe box with the Chaco shipping address pre-printed on the inside that can be folded inside out, both to promote their resoling service and to make it more convenient for Chaco customers to take advantage of it.

Next to the mine, Chaco is Paonia’s second largest employer with roughly 100 employees.

Chaco USA

A Thousand Little Things

Chaco is headquartered in the tiny Colorado burg of Paonia, a couple of hours (and universes) away from jet setting Aspen. Paonia is a mining town, although over the past fifteen years the presence of Chaco world headquarters has infused it with a vague Bohemian quality.

The past decade has seen Chaco rise out of a once crowded pack of performance sandal makers to become the sandal of choice for river guides, mountain lovers, and college students everywhere. For an indication of Chaco’s market share among “outdoor professionals”, check out the footwear being worn here at Outdoor Retailer. A striking percentage will be Chacos.

Against all trade trends and conventional wisdom, Chaco continues to assemble 83 percent of their sandals (including their signature Z/1 and Z/2) in the same metal building that houses company headquarters. On a recent visit, the benefits of this proximity were readily apparent. When Dave Knutson, Chaco’s “minister of HR and the environment,” shows up for work, the dumpsters with the week’s rubber trim waste are right there in the parking lot. The challenges and impacts—social, economic, and environmental—are immediately apparent and unavoidable.

As discussed in the Teko profile in this issue, sustainable design begins with function. Although Chaco sandals have become something of a status symbol in the mountain towns of the west, they were conceived by Chaco president and founder Mark Paigen to be the footwear tool of choice for river rats. But there was another dimension that helped distinguish Chaco sandals—durability. While many performance sandals, especially in the early days, had a life expectancy of about a season, Chaco’s were built to last five years, and to be resoleable.

Chaco’s flagship sandals, the Z/1 and Z/2, have four components—the sole, the footbed, the strap, and a plastic buckle. The compound rubber sole is manufactured by Vibram. The midsole, or footbed, is molded polyurethane from Quabog. The strapping is made from polyester. The midsole is slotted to accommodate the strapping. Aside from a modification to the footbed in 2001, Chaco’s original sandal (and still its most popular) hasn’t changed much since Paigen founded the company in a spare room of his house in 1989.

With the material inputs essentially fixed, Chaco has worked steadily to reduce energy consumption and material waste, and most importantly, to find a substitute for the environmental bugaboo of virtually all athletic footwear—the solvent-based adhesive that binds the sole to the footbed.

Up until 2000, Chaco used a solvent-based urethane adhesive, which was 12 percent glue and 88 percent solvents. The adhesive performed well, but was explosive (never good!), difficult to transport, and had to be vented off.

Chaco experimented with various less noxious potential substitutes, and for 2000-01, they moved to a hot melt PUR, which was essentially the same adhesive minus the solvent. It had to be heated to 180 degrees in order to liquefy. It still had to be vented, additional energy was required to bring it to a liquid state, and the heat resulted in a somewhat uncomfortable working environment on the production floor. On the plus side, the change resulted in a huge improvement in terms of worker safety, and minus the large volume of solvents, significant savings were realized in transportation (both in terms of money and energy). But the reality was that the hot melt PUR never performed as well as the solvent based adhesive it replaced, and the team at Chaco continued to evaluate alternatives.

For summer of 2005, Chaco debuted a water-based urethane adhesive. The chemistry is again essentially the same, but water is now used to liquefy it. This change produced a step back in terms of the energy (and cost) associated with transportation versus the PUR, but contained no hazardous solvents. Initially there were surface tension issues to overcome with the water not adhering, but the adhesive is performing better than the hot melt PUR. (Nike is widely credited with pioneering water-based adhesives in athletic footwear, and several manufacturers have recently adopted them.)

While Chaco has adopted a number of innovative energy and waste reduction strategies over the years, Knutson describes Chaco’s efforts in the area of sustainability to date as somewhat piecemeal. “We’ve tried a bunch of different things and had some real accomplishments, but we didn’t really have an overriding vision,” he says. “There has been a need for a more comprehensive, systematic approach.”

Toward this end, Paigen suggested the idea of a project-oriented “Sustainability Working Group”. Knutson was tasked to lead the effort. Employees were given the opportunity to nominate their peers, and the group convened for the first time in June of 2004. Job one? Measure everything to establish a baseline. Water usage? Two hundred gallons per employee per month. Energy? Two kilowatt hours per unit of production. Number of days employees either biked, walked, or carpooled to work? That would be 1,151, although Knutson notes a recent “bike to work” month helped Chaco shatter the quarterly record.

With baseline data in place, the group will convene each June for a “summer solstice review” to measure progress and establish new areas of priority.

Knutson stresses the importance of harnessing the creativity of Chaco employees to address issues within or related to their areas of responsibility. Waste reduction is an area of priority, and Chaco has made great strides both in terms of whittling down the amount of waste trim rubber. Perhaps last year’s most notable single achievement was finding a cost effective solution for keeping this rubber trim scrap out of the landfill. The program was initiated by Working Group member Patty Naft. (See “Horse Sense” below.) “Working in sustainability is refreshing,” says Naft. “It feels like there are endless possibilities and opportunities to be creative and to have an affect on how the world views Chaco, and also how Chaco affects people and the planet.”

Knutson believes the company has taken the necessary steps to become more systematic and methodical in their approach, but he is hardly oblivious to the reality that all performance sandals on the market, including Chaco’s, are virtually entirely fossil fuel derived. Chaco has experimented with a corn-based webbing, but there are durability issues to resolve. One of their soling options, the Terreno, has a small amount of recycled content. Plant-based plastics and latex are finding there way into the marketplace in other sectors, and may lead to promising developments for footwear at some point in the future. According to Knutson, “It’s a conversation we’re beginning to have with our vendors.” Product Development Director Brandan Hill has just returned from meetings with Chaco vendors in Europe and China where he shared Chaco’s long term vision for sustainability, which includes reducing fossil fuel content and use.

“We’ve started on the sustainability thing, but we’re not parading ourselves out there,” says Knutson. “It’s a journey, we have a long way to go, and it’s going to take a lot of work. But one of the nice things about Chaco—they’re fully behind this effort. I think the fact that Chaco is privately held is important. We don’t have to deal with the standard company politics.”

(For more information about Chaco, go to www.chacousa.com. Dave Knutson can be reached at 970/527-4994, ext. 2204, or via e-mail at knutson@chacousa.com.)

Horse Sense

Patty Naft works in production at Chaco, and is a charter member of the company’s Sustainability Working Group.

“My first assignment as a member of the newly formed 'Sustainability Working Group' was scrap recycling,” she explains. “A few people had tried to get it started but it just always proved to be too expensive.”

“The next weekend I was visiting a friend of mine and told her about my assignment and she said, ‘Arena footing!’ She’s an equestrian and she rides in horse arenas that are spread with ground up old sneakers and rubber. It’s spread in a thin layer and it does three useful things—control dust, keeps the arena ‘floor’ from getting too compacted, and it cuts down on joint injuries to the horses. It was a good solution for our western Colorado location and our virgin polyurethane scrap.

“The following Monday I got right on it. Chaco set aside time for me to leave the production floor every day for as long as I needed to work on the project. I did research on the internet and made a few phone calls and it all fell together easily. It was only a couple of months before we had our pilot scrap ready to be hauled off and turned into arena footing.

“‘Scrap’ is the piece of rubber that is trimmed off of the sole and the footbed on each pair of sandals we make. The trimmers empty their scrap into what’s called a 'supersack', huge bags that are recycled from the food industry. It takes a little more than a day to fill one during our peak sandal making period. The cost of shipping a load to Denver would normally be about $2,100, which wouldn’t be cost effective. I was able to find a trucking company that makes regular deliveries to Grand Junction, and then was going back to the front range empty. Because of this, we were able to get it done for only $300 per load. It still costs Chaco more to recycle the scrap than to landfill it but at least it’s not breaking the bank and it’s reusing tons of virgin polyurethane and keeping it out of the landfill. Before, all this scrap was being landfilled, three dumpsters a week. Now the dumpster’s emptied once a week, and the entire production team has had a lesson in recycling.”