REI Co-op is trying to improve diversity in the outdoor industry with a major effort to invest in founders of color.
With a $30 million multiyear commitment, the retailer’s just-launched Path Ahead Ventures is designed to help 300 entrepreneurs strengthen and scale up. Founders and entrepreneurs of color have been historically overlooked and underfunded in the nearly $460 billion outdoor industry, with only 1 percent of outdoor retail brands being owned by people of color.
The REI board of directors approved the $30 million fund, which aims to support 300 Black, Indigenous, Latine and Asian American Pacific Islander entrepreneurs by 2030. In an interview Wednesday afternoon, REI senior vice president of corporate development and investment Susan Viscon said the aim is to add 200 BIPOC-owned and led brands by 2030 with the goal of generating $1 billion in cumulative sales over that time. That would represent more than 15 percent of the brands sold at REI’s 171 locations and online. The Seattle-based retail chain expects at least 100 of those resources that will become part of its retail assortment will come from its accelerator program.
REI and other major retailers have sourced products in ways that have made it difficult for smaller, lesser-known brands to compete, which has led to a disproportionate impact on founders of color.
Statistics collected from the U.S. Forest Service, the National Park Service and Fish and Wildlife Service show that nearly 70 percent of people who visit national forests, national wildlife refuges and national parks are white and Black people are the most dramatically underrepresented in these spaces.
As word spreads about the Path Ahead Ventures, and REI’s more accessible approach to vendors, the retailer expects to find more brands that are owned by people of color. Next month, for example, WhitePaws RunMitts, a five-year-old Baltimore-based label, will be new to REI’s shelves.
REI’s Path Ahead Ventures is the latest project in the sector. While there has been an upswing in advocacy and promoting diversity in the outdoors in the past few years, the Diversity Outdoors coalition was established to better connect the movement through social media. Just this week Patagonia named Lisa Ramirez head of people and culture and Orvis tapped Rebecca Jones as chief people officer. While these hires will no doubt impact hiring at both companies, REI’s strategy is a different type of outreach.
REI has been looking at how it can make change within its organization and the communities that it works with, according to Viscon. Looking to “accelerate racial equity across the board,” the company looked “at all the corners of its business,” and sought “bold goals,” she said. The lack of diversity among suppliers in the outdoor industry led the company to research that further over a few months to see why that was and what might make the biggest change, Viscon said.
One of the takeaways was the need to provide grants and/or direct investments, which was how the company decided on the $30 million figure to create meaningful change. About 20 percent of that money is earmarked for grants, which will range between $10,000 and $25,000. The remaining $24 million will be used for direct investments. The plan is to invest in BIPOC founders so that they can determine “whatever their growth plan might be next,” Viscon said.
There will be two programs — “Embark” and “Navigate” for the 300 entrepreneurs. Embark will focus on supporting aspiring founders, who are trying to turn early-stage ideas into viable business models. Each year, 20 to 25 founders will be selected for that program and will receive a $10,000 grant and a three-month course about basic entrepreneurship. Each individual’s business idea, readiness and engagement will be considered before the finalists are chosen. The first round of Embark recipients will be determined by an eight-person team by Founded Outdoors representatives and REI team members, including some with experience in entrepreneurship, accelerator programs and mentors.
The Navigate program will support existing founders in growing and scaling up their businesses, by providing resources for production, distribution, publicity and networking. That is expected to consist of five to 10 people annually, who will have the opportunity to receive both a $25,000 grant and additional direct investment from REI. The latter could range from $100,000 to $250,000 depending on their growth strategies and needs, Viscon said
In addition, REI will be considering including products that are made by its accelerator participants in its retail assortment. The initiative will also provide connections to supply chain resources including factories, among other resources.
As for why the lack of diversity has been and remains an ongoing problem in the industry, Viscon noted how representation and funding for underrepresented communities is “extremely low.” Aware of that as a broader issue, REI executives researched how that impacts the outdoor sector. The company also conducted about 100 interviews with founders, investors and community leaders, which re-enforced that “many of the founders” that REI works with in the industry face some of those same biased pattern matching or lack of access to funding, Viacom said.
Making the point that the outdoor industry is a cooperative with many companies and organizations working together across different issues, she said that also creates a lot of internal networking, as in who knows who. With that in mind, REI is trying to welcome more newcomers by being more approachable. Traditionally, the retailer has relied on the tried-and-true for finding vendors — trade shows and sales representatives that the retailer already knew. To try to change that, REI’s merchant team has launched Greenlight, a portal that allows anyone who is trying to sell to the retailer by directly submitting their products to the buying team.
In terms of people of color’s participation in outdoor activities and access to the national parks and removed from the outdoor industry, Viscon cited the Outdoor Foundation’s 2021 Outdoor Participation Trends Report. Last year, 72 percent of outdoor participants were white, but Viscon emphasized that nearly 30 percent of the people who recreate in the outdoors are people of color. “It’s actually a very large amount of people that are out there doing the activities, whether it’s camping, running, hiking. Now, true at national parks there are lower numbers. But what we have tried to do at REI is to step back and think of outside versus outdoor, and what are the ways that people are enjoying nature outside. Through this pandemic we have seen really huge increases across everybody, but even more outsized increases among people of color recreating outside,” she said.
What hit home for REI was that if nearly 30 percent of the people recreating outside identify as a person of color and yet only 1 percent are founders and creators of outdoor businesses, “there are unmet needs in that ratio,” Viscon said.
As for whether that looks at participation in more general terms such as going to Central Park versus Arcadia National Park, she said, “That survey of 30 percent looks across all of the activities that the outdoor industry identifies. It’s everything from hiking to running to camping.”
That said, the Outdoor Foundation’s report noted that for the past three years, participation rates declined annually among Asian Americans. During that same period, the number of Black participants stagnated, while Hispanic participants increased. With Black and Hispanic Americans remaining significantly underrepresented, despite some progress, the report also noted that coordinated ongoing outreach must accelerate if the U.S. outdoor industry wants “to truly represent our diverse nation.” To that end, 38 percent Black Americans between the ages of six and older participated in outdoor activities last year, compared to 40 percent in 2019. And Hispanics, the fastest-growing ethnic group in the U.S., comprised 11 percent of outdoor participants last year, a slight downturn compared to 2019.
Despite that, Viscon focused on upticks in specific activities and speculated that the nearly 30 percent participatory rate is understated with some participating in other activities that are not broken out. To try to strengthen access and participation, the REI Co-operative Action Fund, a community-supported 501 nonprofit, was launched earlier this month to promote justice, equity and belonging in the outdoors. About 20 grantees have been identified for next year including some organizations that are dedicated to creating and encouraging more outdoor activity for people of color, those with disabilities and [who are] LGBQT+. Black Girls Run, the Center for Native American Youth at the Aspen Institute and Latino Outdoors are among the recipients “that have a unique way of thinking of a community and how to really expand love and joy for outside time. We’re working with them as a way of expanding interest,” she said.
Viscon said, “It is important to note that sometimes we can lean back on the narrative that there are less people in the outdoors so therefore there are less people of color making outdoor products. When you look at [nearly] 30 percent [of people of color participating in outdoor activities] versus 1 percent [retailers of color selling outdoor-related products] that can’t be a narrative. That simplifies things too much and doesn’t reflect what we’re actually seeing. We’re seeing million of people of color in the outdoors enjoying that space.”
All in all, REI believes that “by doing this work, we will increase the innovation, perspectives and ideas from these founders. We’re looking forward to them being influencers in the industry. We’ve already seen some success in that space. We know that the more diverse perspectives that come to the table, the more innovation that will be there also,” she said.