Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How a 150-Year-Old Denim Maker Pivoted to Sustainability
Transcript
- Lucas: So Levi Strauss & Company — 150 years old, literally invented blue jeans in 1873. And for most of that history, the business model was simple: make more jeans, sell more jeans. Luna: Volume game. Classic retail playbook. Lucas: Exactly. But around 2011, something shifted. The company realized that the old model was hitting limits — rising cotton costs, water scarcity becoming a real issue in manufacturing regions, and a younger generation starting to ask hard questions about where their clothes came from. Luna: So they didn't just tweak the messaging. They actually changed how the product is made. Lucas: Right. They launched something called the Water<Less program. The idea was to reduce the amount of water used in the finishing process — that's the stage where denim gets its softness, its color, its distressed look. Traditional methods used something like 42 liters of water per pair of jeans. Levi's found a way to cut that by up to 96 percent. Luna: Wait — 42 liters down to maybe 2 liters? That's not incremental improvement, that's a fundamentally different process. Lucas: It is. And they did it by re-engineering the machinery and the chemical formulas — more ozone treatments, less water rinsing. By 2020, they'd saved over 4 billion liters of water. But here's the pivot part: they didn't keep that as a trade secret. They published the techniques. They shared them with competitors. Luna: That's counterintuitive. If you've just built a competitive advantage around sustainability, why give it away? Lucas: Because their bet was that the real advantage wasn't the manufacturing trick — it was the brand positioning. They wanted to own the idea of sustainable denim in the consumer's mind. And if every pair of jeans became less water-intensive, the whole category got legitimized. Levi's would be the company that started it. Luna: So it's a branding pivot disguised as a supply chain move. Lucas: Exactly. And that was phase one. Phase two came around 2020, when they launched Levi's SecondHand — a marketplace for used jeans, both Levi's and other brands. They started taking back old pairs in stores, refurbishing them, and reselling them online. Luna: Which is a huge shift for a company built on selling new products. You're essentially saying, 'We'll help you buy less of our stuff.' Lucas: Precisely. It's a circular economy play. But look at the numbers: by 2024, SecondHand had become a meaningful revenue stream — not huge relative to their core business, but growing fast. And more importantly, it drove repeat visits to the website and the app. Customers who bought secondhand had higher lifetime value than first-time new-jean buyers. Luna: Because they're already in the ecosystem. They're more engaged. Lucas: Yes. And they're also more likely to buy new jeans later. So the secondhand channel actually feeds the new-product channel. It's not cannibalization — it's a funnel. Luna: Interesting. So the pivot is really about changing the relationship with the customer from transactional to ongoing. Lucas: That's the core insight. Levi's moved from being a jeans manufacturer to being a wardrobe lifecycle manager. They now offer repair services in some stores — you can bring in a pair with a torn knee and they'll darn it for you, for a fee. They have a partnership with a company called Trashie that rewards you for recycling old clothes. Luna: It's almost like they're building a membership model without calling it a membership. Lucas: Right. And the financial results back it up. While many apparel brands struggled with inventory gluts and discounting in 2024 and 2025, Levi's managed to maintain higher average selling prices. Their direct to consumer channel — their own stores and website — grew to over 40 percent of total revenue. That gives them control over pricing and brand experience. Luna: So the sustainability story isn't just about being virtuous. It's a concrete business strategy that improves margins and customer retention. Lucas: Exactly. And here's where it gets specific for 2026. The company recently announced a target to make 100 percent of their products with sustainable fibers by 2030. They're investing in hemp and recycled cotton blends. But the more immediate metric is that their SecondHand business is on track to double in size this year. Luna: Sounds like they've found a way to make the old new again — literally and figuratively. Lucas: That's the headline. A 150-year-old company that could have coasted on its brand name instead spent a decade reinventing how it makes money. They didn't abandon their core product — they expanded the definition of what they sell. Luna: And that seems like a lesson for any legacy business facing disruption. You don't have to burn everything down. You can change the model around the product. Lucas: Yeah, and that's the kind of thing we try to dig into on this show. If these conversations have moved your work forward in some small way, a couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: Totally. It makes a real difference. Lucas: So back to Levi's — one more thing I want to highlight. In 2025, they launched a program called 'Buy Better, Wear Longer' that ties all these initiatives together. It's not just a marketing slogan; it's a product strategy. They started offering free repairs on any pair of Levi's, regardless of where it was bought, at their flagship stores. Luna: That's a bold move. Free repairs on competitors' jeans too? Lucas: No, just Levi's. But they'll repair any Levi's, even if you bought it secondhand. That creates a powerful incentive to stay in the brand ecosystem. And it generates foot traffic — people come in for a repair and end up buying a new pair while they wait. Luna: So it's a service that builds loyalty and drives sales. Smart. Lucas: And it's consistent with the pivot. The company that once just shipped jeans to department stores now operates a full lifecycle business. They manufacture, they retail, they repair, they resell, they recycle. That vertical integration around sustainability is their moat. Luna: It's a great example of a pivot that doesn't look like a pivot from the outside. You still buy a pair of Levi's — but the company makes money from you in more ways over a longer period. Lucas: Exactly. The product didn't change dramatically. The business model did. And that's often the hardest pivot of all.