For a second year, BoF and the Portuguese Footwear Association co-hosted a panel discussion on the growing opportunities for footwear brands and businesses manufacturing in Portugal. Here, BoF shares key insights from the discussion. For insight into the impact and realities of upcoming regulation, the benefits of nearshoring, and the growth opportunities for footwear brands and businesses manufacturing in Portugal, BoF and the Portuguese Association of Manufacturers of Footwear, Components, Leather Goods and Substitutes (APICCAPS) co-hosted a panel event in London this July. Hosted by BoF’s Sophie Soar, panellists included: Paulo Gonçalves, communications director of APICCAPS; Florence Kollie Raja, director at Ethical Era; and Iva Minkova, collection director at By Far. The events of recent years have seen major shifts take place within the global footwear market. Despite sustained growth — in 2025, the global footwear market’s revenue is forecasted to reach $427 billion according to Shopify, marking a 3.4 percent annual increase — disruption to the global supply chain and uncertainties within the socio-political market persist. As consumers still feel the aftershocks of the all-time inflation highs experienced in 2022, brands have felt the pressures of increased manufacturing and shipping costs while also grappling with their customers’ shrinking discretionary spend. Additionally, regulatory pressure from government bodies are set to force footwear brands to better manage their environmental and social impact. New legislation in the European Parliament will hold brands more accountable for their supply chains, ban products made with forced labour, and establish new environmental standards for the design and disposal of products. However, in these changes lie opportunity. Closer collaboration between brands and their suppliers could help them to future-proof against evolving standards and legal changes. What’s more, manufacturing closer to customers could allow for tighter control and greater speed to market. According to McKinsey’s CPO survey, 54 percent of executives expect to increase reshoring or nearshoring in 2024. Others are thinking about rebalancing their sourcing footprint by sourcing from multiple countries. Below, BoF shares key insights. Balance investments in sustainability regulation with technical innovation Paulo Gonçalves: The consumption of fashion products has boomed in the last few years — in the footwear industry, in the last decade, production increased 15 percent to 24 million pairs of shoes worldwide, with close to 90 percent of that made in Asia. We do not believe that is reasonable or even sustainable. We do believe that there is a place in the market for a smaller player like Portugal and we are trying to do the best we can to be a world reference in terms of sustainability. For that, we launched a strategic plan, investing €600 million by 2030, to develop the Portuguese Green Impact, which was signed by companies that represent more than 50 percent of our production, trying to minimise water consumption, use of energy, packaging, raw materials, traceability. We are also investing €140 million into automation, digitalisation and sustainability. It’s all about investing in the scientific point of view, to ensure we optimise our processes to create better products for the future. Some €80 million of this investment has come from the BioShoes4all project, with the support of the European Commission and the Portuguese government supported by PRR. Florence Kollie Raja: We need to have a balance of regulation with innovation — what I am seeing is that we are having an eco-driven, totalitarian view, but we’re not taking into account other elements that are at play — elements in that, whenever there is something that’s non-desirable and non-pro-the-green-agenda, it gives us respite to go back to the drawing table, go back and invest in [research and development, or] R&D to then innovate and produce something new. You have got to believe in the vision outside of all of the noise of politics and everything that’s going on with consumers. You have to answer the question of, how do you combine an environmental element and a social justice element with aesthetics? Iva Minkova: On the one hand, you have TikTok generating a new micro-trend every day. On the other, you have got a returning desire [from the consumer] for quality, for sustainable products and transparency. But it takes time, integrating new and sustainable materials — it takes time to trial test R&D. Thinking about the entire value chain for brands, it can be such a trap to respond to those micro-trends and I think the strength of the UK fashion scene is that it has always generated talent and brands that have very strong identities that they don’t necessarily need to conform to these trends. Understand the economic and logistical advantages of nearshoring production Paulo Gonçalves: I believe there’s a lot of potential in nearshoring because we can reduce the logistics costs meaning we can increase flexibility. There can be better product control too, carbon footprint reduction, and we can even start to produce less and reduce the stock, because one of the biggest problems in our industry is that everybody is producing huge quantities, and then you have the stores full of stock which they can’t sell. In Portugal, we are always investing in modernisations, in new technology, so we specialise in producing small quantities and the faster response to the market this brings — while still producing excellent shoes and prices. The Portuguese sector exports 90 percent of its production to 173 countries on all five continents. Iva Minkova: When we talk about manufacturing being close to the consumer, nowadays, you sell worldwide [so the consumer is global]. But it’s precious to me and the brands I’ve worked with that manufacturing is as close to us, to our design studios, as possible — because a shoe is made up of so many different elements. It’s precious to me and the brands I’ve worked with that manufacturing is as close to us, to our design studios, as possible — because a shoe is made up of so many different elements. You need to be partnering with this hub of activity, where you have your manufacturer, but you also have your last-maker down the road, the heel-maker across the road, the sole maker on the other side, because all these elements need to fit together perfectly. It is about seeing people face-to-face, to be able to explain to them what you want to achieve, then being able to give back their knowledge to you. [...] You [also] need to be able to account for your activities in simple terms — where does your energy supply come from? What is the provenance and fibre content of the material we’re using for this production because we don’t want to use X chemical. But it can also have another benefit: are you paying a fair wage to your workers? Are you paying a living wage to your workers? Is it different from minimum wage? If you’re using a third party, is that third party being as responsible as you are? Foster partnerships across the value chain that reflect brand values Florence Kollie Raja: What is your vision in the industry? What is your vision in the region and as a company? You have got to stick to it [with] authenticity — do you believe in the aesthetics and the beauty of craftsmanship, its durability, its design and process? If there’s something that’s very specific to Europe in shoe design, are you at the forefront of pushing that agenda forward? How do we combine the aesthetics and the beauty of what the partnership is about, or what we do in the fashion space alongside design? We’re heading into a world of cross-sector collaboration, bringing different minds together. Iva Minkova: It’s in the process [of production] that you find brand value, [like] being able to showcase how the product is made — not only [showing it] is made under safe conditions, but there’s so much beauty [to be found in] the way they’re producing in the whole process — the stitching and the polishing. Partnerships can be a winning strategy because we have the know-how, we have the technology. [...] the brands, the designers, they bring with them a fresh vision. The era of gatekeeping is over. You need to know that, once you release this information into the world, your competitor is not going to come in and swoop your manufacturer and your partner away. So, if you have a good working relationship, you can get to that place. Paulo Gonçalves: [Partnerships] can be a winning strategy because we have the know-how, we have the technology, we have the skills to develop new products, even sustainable products. And most of the time, the brands, the designers, they bring with them a fresh vision, they have new concepts, they have new products. Almost 80 percent of our production is directly from international brands, so we are used to working with international brands, even in the high segments of the markets. For example, at the panel event co-hosted with BoF last year, I met [fashion designer] Bianca Saunders and we spoke about the possibility of developing her first footwear collection. We invited Bianca to travel to Porto, to meet our facilities, to meet our workers, technological centre and so on. One month ago, Bianca presented for the first time our collaboration — a collection of six distinct styles from loafers to mid-boots and high bridge trainers during Paris Fashion Week Men’s in June 2024. Building partnerships with globally renowned designers is an incredible opportunity. I believe we can do great things in the near future, so our doors are always open. | 
