Feet in the clouds: Inside the meteoric rise of On
In 2010, David Allemann told his friends he was quitting his job at the trendy furniture company Vitra to pursue something new.
‘He messaged me on LinkedIn and said, “I’m going to start a running-shoe brand,”’ Alex Griffin recalls. ‘My reaction was, “Good luck: who needs that?”’
Allemann had decided to go all-in on a project with his friend Caspar Coppetti and Olivier Bernhard, a retired duathlon champion and Swiss Ironman winner. Bernhard had developed the idea for a new running shoe. Something intended to maximise enjoyment, with a novel design that would cushion impact and propel the runner forwards. Bernhard said it would give the sensation of ‘running on clouds’.
Bernhard had approached a major running brand with the concept. They passed. So, he set about making his own prototype, slicing up a garden hose and gluing sections to the soles of an old pair of Nike trainers. The design became known as ‘Cloudtec’ and formed the cornerstone of On, the athletic brand Bernhard went on to found with Coppetti and Allemann.
In 2021, 11 years after launching, On debuted on the New York Stock Exchange with a valuation of $7.3bn (around £5.7bn). In 2023, it reached nearly $2bn (around£1.6bn) in sales. The company has grown between 70% and 80% every year for the past seven years, sealing its place as the world’s fastest-growing shoe brand. It may just be getting warmed up. The brand wants to double revenue by 2026, up to $4bn (around£3.1bn). With their distinctive midsole pods, On running shoes are now sold in 10,000 outlets in more than 60 countries. Expansion has been so rapid that On has moved offices six times. More than 1,000 of its 3,000 global employees now share a state-of-the-art head office in Zurich; On Labs is an imposing 14-storey building in the city’s former industrial district.
No one in On’s management team has any prior experience in athletic shoes or sportswear.
‘Bring together people who don’t know anything about what they’re doing and let them hack it out,’ says Bernhard’s affable LinkedIn connection Alex Griffin, who joined as chief marketing officer seven years ago. ‘No one asked for a running shoe from Switzerland. We had to tell them.’
We’re in the library on the eighth floor of On Labs, with postcard views of the Swiss mountains. But I first met Griffin in the lift, arriving for work that morning, with other sportswear-clad employees.
On Labs shares some attributes with a tech start-up – modernist stone architecture, high-end canteen, ping-pong table on the roof – but there’s much that’s unique. For starters, it’s in Switzerland. The country is associated with chocolate, luxury watches and private banking, but not necessarily innovation.
‘Being a Swiss company, you know early on that you have to go international,’ says Jiahui Yin, On’s former chief operating officer. ‘Switzerland is a small country. If you’re just a Swiss-based consumer brand, you can never have a great level of influence on people’s behaviour. From our first year, we were in Germany and Austria. And then we went to the US in 2014.’
On’s Swiss qualities may be detected elsewhere, too. For all the noise about the innovative midsole tech, the brand’s colours and overall designs tend to be minimalist and neat. It found its first brand ambassador, also a serious financial backer, in Roger Federer, a sportsman famous for his composure.
Federer’s wife Mirka had started wearing Ons, and it was Federer who approached On. They were not immediately convinced – what if the tennis legend was too famous? Might that overshadow the brand? Similarly, when Jonathan Anderson of luxury fashion brand Loewe approached On to suggest a collaboration, they chewed it over, finally agreeing that Anderson’s love of craft and design would be an appropriate fit. The partnership is now in its fifth year.
Larry Eder, co-founder of RunBlogRun, wrote that when he met On’s management team around the time of its US launch, he was shocked that they already had a 10-year plan in place – not something he’d ever seen with any US shoe start-up. The On staff I speak to say this wasn’t the case, but they agree that there is a circumspection at On that’s created a different kind of corporate culture for a sportswear company.
‘Sometimes we hire people who have been at Adidas or Nike for 15 years and they come in with the expectation that they’re the industry expert,’ says Yin. ‘And their reaction is, “Oh my god, everything is so different here.”’
Ah yes, Adidas and Nike. And, indeed, the rest of the running-shoe market. As recently as 2020, Nike was outpacing everyone in running, its largest category. Now it seems to have picked up a stitch. The brand predicted its sales would be down by around 5% in 2024. Nike is still the world’s biggest sports brand by some distance, with global revenues of $51bn (around £40bn) in 2023. Along with Adidas, which earned $5.8bn (around £4.6bn) in the first quarter of 2024, it remains streets ahead of the competition. But it’s now possible to split the trainer market in two. On one side, there are the incumbents – companies including Nike, Adidas, Puma and Asics, world-famous names with decades of experience and brand equity behind them. On the other there are the challengers – brands such as On and Hoka.
On trend
At this stage, the chances of a challenger toppling an incumbent are tiny. But collectively, they’re nipping at the old guard’s heels. Consumer spending on ‘sportswear’, which includes brands like Lululemon, Sweaty Betty and Gymshark, has jumped from $301bn (around £236bn) in 2020 to $422bn (around £330bn) in 2024. It’s predicted to hit around £401bn globally by 2027, according to a report published by the bank RBC.
Analysis by The Business of Fashion showed that, from 2021 to 2023, revenue at 13 challenger brands rose by an average annual rate of 29%, compared with 8% growth for the established names. The RBC report also mapped the next few years. Between 2023 and 2026, it predicts annual growth of 5% at Nike, 9% at Adidas and 13% at Amer Sports, home to Salomon and Arc’teryx. Way out front, at 26%, is On.
It’s not just runners driving this. ‘Sportstyle’ footwear – fashion-forward adaptations of running, trail and hiking shoes – has crossed over. When Rihanna performed to a global audience of 121 million at the Super Bowl halftime show in 2023, she wore Salomons; albeit a pair of MM6 Maison Margiela x Salomon Cross Lows, a design more appropriate for being hoisted aloft on a silver platform than ascending Scafell Pike.
Headlines like ‘What the hell is going on with this weird new running shoe?’ (Gear Patrol, 2020, referring to Hoka’s bulbous neon-soled TenNine shoes) and ‘Why these chunky, ugly running shoes are selling like crazy’ (CNN, 2023, on Hoka generally) are no longer newsworthy. Non-runners are now just as likely to be seen wearing deep-lugged trail shoes or carbon-plated road racers to go about their daily potter as they are Adidas Sambas. On’s Cloudmonster Hyper is promoted with the line, ‘When max CloudTec cushioning meets Helion superfoam, max energy is unleashed’, which may not be strictly necessary for doing the school pick-up. But On is certainly benefitting from the running-lifestyle crossover. My taxi driver from Zurich Airport was wearing a pair of On Cloud 5 running shoes, as was the receptionist at my hotel.
‘Of course, there’s a level of athletic virtue signalling,’ says Griffin. ‘The athleisure explosion is a visual choice that makes people seem more sporty. But the comfort component is important. Shoes that are great to run in because they feel soft and give you good cushioning – they’re also good for all-day wear.’
In contrast with brands that have maintained the party line that their products are strictly for sport, even when it’s a trendy limited-edition collaboration with a rapper, On concedes that many customers just want a casual, everyday shoe. It’s here for them, too. ‘Everyone walks in shoes,’ says Yin. ‘Walking, running, going to different locations. They can all use our technology.’
‘On has been able to cater to the lifestyle needs of a broad swathe of the population in ways that others haven’t,’ says Dylan Dittrich, head of research at Altan Insights and the author of Sneakonomic Growth.‘ And that’s kind of a double-edged sword, right? They haven’t been the supercool streetwear sneaker of choice – yet. Instead, they’re selling that athleisure look with a little bit more sophistication. You see people from the Baby Boomer generation wearing them, you see millennials, you see Gen X.’
Fit for purpose
On is still a running brand before it’s a fashion brand though, and that authenticity has been a key driver of success. Just as, in the 1960s, Bill Bowerman wanted lighter, faster running shoes for his athletes and teamed up with his former student Phil Knight to found Nike, On was born from Bernhard’s dream of a shoe that would improve the running experience.
On’s first race shoe, the Cloudracer, caught on with serious runners. And On has maintained these roots, sponsoring On Athletics Club (OAC), a group of professional distance runners based in Colorado, USA; organising group runs every Wednesday outside its stores around the world; and signing several Olympians to its roster.
‘The OAC are a cool, interesting group of young athletes competing at the Olympics,’ says Griffin. ‘They train together, they live together – a bit like a running cult.’ On sees benefits to this. ‘They have an amazing coach, Dathan [Ritzenhein, a retired US distance runner], and togetherness is an important part of his process,’ Griffin says. ‘The OAC are friends – they have a podcast together, where they talk about coffee, of all things [Coffee Club]. They support each other. If one of them is racing and the others are not, they’ll go to support them. And that is different to other brands. Other athletes now want to be part of that.’
‘On has become a serious competitor in performance footwear,’ says Dittrich. ‘Having Federer as such a big part of the brand is going to give legitimacy in tennis. But in running, they’ve built a first-class roster of athletes, and that’s helped the brand be taken seriously.’
While a traditional athlete’s sponsorship deal might involve having a box of kit shipped out to them every few months and possibly meeting up at a race, On’s ‘360-degree’ approach provides its ambassadors with everything from training and nutrition guidance to financial advice. It’s an investment in building long-term relationships.
‘We’re not just another brand that gives them a lot of money and ships products that it has already made,’ says Yin. ‘We make them part of On. We even make a product specifically for some athletes if they have a special need. We really believe all the input we get from them can eventually be commercialised and will add value to our consumer business.’
On’s emphasis on grass-roots marketing is specifically alluded to in its IPO report, and the company keeps its eyes and ears to the ground with a rigour that may seem obsessive. ‘We do runner counts around the main running tracks around the world twice a year, every year’ says Yin. ‘We actually count how many runners are wearing our shoes. That’s a key measure of success.’
So, they have people with pens and paper, totting up how many pairs of On shoes go past? ‘It’s a bit more AI,’ says Yin. ‘We use an agency that’s able to capture pictures and identify each logo. It’s important not to be overly caught up by success. The sales figures are going up and people love our shoes. But it’s important for us to be true to the core of the product, that people not only like the designs, but that they are being used on the tracks. You could be selling a lot of products, but if no runner is wearing them, eventually you’re going to lose in this game.’
Community action
Last year, On realised its gear had become popular with young people in Liverpool, sections of whom have a penchant for dressing in one sports brand, head to toe. (Under Armour was a previous example.) These were not supercool ‘sneakerheads’ or, crucially, runners. In response, On scrambled to establish a pop-up, set up in conjunction with local running clubs. ‘The Monster Den’ was a 370 sq metre space designed to ‘spotlight community, connection and the joy of running’.
‘Our strategy is to go where the communities are,’says Emily Thompson, the brand PR lead at On in the UK. ‘The challenge is letting those communities know about our roots.’
This tends to be done with a light touch. Last June, at a packed-out event at the Parliament Hill athletics track in north London, it wasn’t the runners pacing around the track that had necessarily caught people’s attention, but the freestyle rappers, fire-eaters, climbing walls and various other forms of free entertainment happening around them. Given I was with two bored kids (my daughters, aged seven and 11), it proved a welcome distraction. We sat on the grass and coloured in placards of a cartoon rat holding aloft the words “YOU GOT DIS”. One of them is still in my younger daughter’s bedroom.
It took a while to dawn on me that the event was sponsored by On. It was a kind of matinée to Night of the 10,000m PBs, which is now part of TrackNights, a global series of events that On’s website refers to as ‘the Glastonbury of the athletics world’. Later, under the track’s floodlights, athletes including Jessica Warner-Judd and Olympic finalist Andrew Butchart raced for prizes, with the top award going to the two-time Olympic medallist Paul Chelimo.
‘We take running to the people,’ says Griffin. ‘You might watch the London Marathon on TV, but running is not something the masses tune into. So, we try to bring people really close to the track and hopefully feel the rush of the athletes as they go past, as well as doing some of the festival components around it. We call it “run culture”, which is not just, “Hey, let’s watch someone maybe break a personal best.’”
How big does On’s senior management think the brand could become? ‘Well, we have a big dream,’ says Yin. ‘But it doesn’t matter how big you are, it’s really the quality of your growth. If you’re pushing for too much growth, you start doing the wrong thing. You start to diverge from what your brand authentically should be.’
On developed trail shoes because it realised its customers were using cushioned running shoes for hiking. But it has no plans to get into, say, basketball.
‘We’re not going for something that isn’t relevant to us if our customers are not taking us there,’ says Yin. ‘We still have so much demand just on our running products, and the verticals adjacent to running. It’s a massive market.’
On has made one part of its big dream public: telling its shareholders it will hit $4bn by 2026.
‘We’re looking at doubling our revenue,’ says Yin. ‘And we’re quite confident we can do that. As of today, we are at almost $2bn. Look at Nike, they are 10 times that [actually more like 25 times]. But if you look at our brand awareness, we are nowhere. There was an awareness test we did in the US [On’s biggest market] and only 9% of consumers knew our brand. So you can see how much room for growth there is. When we do our runner count, we’re still a single-digit percentage in how many runners on the major tracks around the world are wearing our products. That gives us a strong conviction that we can grow significantly.’
‘We actually could have grown faster,’ says Griffin. ‘But we always wanted to do things in a qualitative way. We’re trying to invest in the right way – in our athletes, for example, which is more about longevity than it is quick wins.’
When On floated on the New York Stock Exchange in 2021, its co-founders and staff helped make up a group of 100 runners, who ran alongside the HudsonRiver over to Wall Street, and up to ring the NYSEBell. (Founder Olivier Bernhard is known to do staff appraisals and onboard new members while taking them for a run on the shore of Lake Zurich. Great
for team bonding...but perhaps not the way everyone wants to interact with their boss.)
Moving On
Bernhard is a habitual tinkerer, as befits someone who glued bits of hose to a shoe. He grew impatient waiting for his Asia-based factory to create samples, so he built a Maker Space on the ground floor of On Labs instead. Now, when someone has an idea, the team use PVA, a laser-cutter and a 3D printer to make a prototype shoe in a matter of hours.
At On Labs, I’m welcomed into the Maker Space by Thor ter Kulve, who’s responsible for running the workshop. It’s pleasingly old school – tools lie scattered over benches and there’s a strong smell of solvent in the air. The raw prototypes On makes are known as ‘monsters’. ‘Because,’ ter Kulve tells me, ‘they are so ugly.
‘This is an example of the Cloudsurfer,’ he continues, holding up an aborted version of the cushioned road-running shoe. ‘The idea was if we change the sizes of the cavities in the midsole and where they are placed, we can positively influence the way someone runs.’ It had so many holes, it looked like a block of cheese.
‘You know, we all laugh about this Swiss cheese,’ says ter Kulve. ‘But On was founded on this idea of cutting a garden hose into little sections and gluing it on to a shoe. It’s that mentality we like to keep alive.’
On’s flagship Swiss store is connected to On Labs, a 350 sq metre shop built with the same bright, industrial aesthetic as its offices. Here, I meet Bianca Pestalozzi, general manager for the EMEA region. She walks me through the entire range and highlights On’s concealed Magic Wall shelves, which hold every size of shoes – the quicker way to get them into customers’ hands and on to their feet.
‘Usually, in a shoe store, the journey is a bit broken,’ she explains. ‘A store associate vanishes in the back for 10 minutes to see if they have your size in stock. We want to disrupt that.’ Customers are encouraged not just to try the shoes on, but out – and go for a quick run around the block. Another area where On is innovating is its Cyclon line, which is designed to be recycled. While every brand must now do something to tick the sustainability box, Cyclon offers something different. The line, which to date comprises three shoes and a T-shirt, is available by subscription only. You pay a monthly fee and, when the kit is trashed, you return it for a replacement. On recycles what you’ve sent back.
‘We had to think about how we would go to market with that,’ says Griffin. ‘People aren’t used to sending shoes back. At the end of their life, they end up in a recycling bin, if you’re lucky. So, the idea was a shoe that you never actually own. At the end of its life cycle, when you’ve put them through their paces, and hopefully done some kilometres, you get new ones.’
On the wall of On’s flagship Swiss store is Bernhard’s prototype shoe. An old Nike covered in masking tape, with bits of garden hose glued, quite badly, to its base. I express surprise not just at seeing it, but that it exists at all. ‘We didn’t make it up!’ says Pestalozzi. ‘That’s how it all started.’
It’s almost lunchtime and we’re passed by a flank of young On employees kitted out in running gear, many of them wearing yet-to-be-released test shoes, jogging through the store. Despite it snowing outside, they’re off on a run. ‘You don’t have to be a runner
to work here,’ insists Yin. ‘We believe everyone does some form of movement.’
The only branding on the shopfront is On’s hieroglyph-like logo. It’s supposed to resemble a light switch turning ‘on’. I say that I’d read that nine out of 10 people couldn’t decipher it, and don’t know what the brand is called. But surely that couldn’t be true.
‘I actually think it is true,’ says Pestalozzi. ‘A lot of people think that we’re called “QC”. We’re also aware of the limitations of the word “On” in search-term marketing. We’re taking steps to address it. Still, given all that,’ she says, ‘we’re doing pretty well.'
You Might Also Like
