Source reduction — redesigning products and supply chains to minimize virgin material, water, energy, and chemical inputs — is becoming a cornerstone of profitable growth in the apparel sector. When combined with circular business models (resale, repair, rental, product-as-a-service), it delivers measurable cost savings, revenue uplift, and brand differentiation. Bain & Company’s CEO Sustainability Guide 2025 reports that over 70% of manufacturing executives expect circular solutions to grow revenues within three years, and more than half anticipate net cost savings despite initial investments.
Leading apparel players such as Levi’s, Adidas, Patagonia, and H&M have embraced resource-efficient design and circularity to drive growth. Even smaller, younger brands like Hirundo, a Portuguese sneaker brand, for example, are showing that upstream design decisions can deliver material cost reductions, faster inventory turns, and healthier cash flow — proving that sustainability is a growth strategy for companies of all sizes.
1. Why Source Reduction Matters
Source reduction addresses the problem upstream, before waste and inefficiency are created. In apparel, this means:
· Standardizing components to reduce material waste and improve planning.
· Reducing water and chemical use in production (e.g., Levi’s Water · Designing products for modularity and late-stage customization, allowing brands to align production more closely with demand. Even young brands are applying these principles. Hirundo shifted to white uppers across all sneaker models (instead of the color coded previously used), allowing the brand to add the colored sole in the final stage of production. This reduced leather waste, improved predictability, and gave the company the ability to delay color decisions until demand was clearer — a source reduction decision that directly cuts overproduction risk. 2. From Cost Savings to Growth Engines Bain’s research confirms that resource efficiency is not just defensive — it is a driver of top-line growth: · Cost Advantage: Lower input usage protects margins against volatility. Levi’s cut water use dramatically while saving millions in processing costs. Hirundo optimized sole production by designing all sneakers to use the same sole, reducing tooling complexity and waste. · Premium Pricing & Market Share: Sustainability credentials attract consumers willing to pay more. Adidas’ Primegreen and Patagonia’s regenerative cotton collections are positioned as premium, high-growth lines. · Revenue Diversification: Resource-efficient design enables made-to-order models and resale programs. H&M and Patagonia now generate incremental revenue from circular services that complement new-product sales. 3. De-risking Supply Chains and Regulation Sourcing fewer virgin materials reduces exposure to price volatility and supply chain shocks. It also helps apparel companies stay ahead of tightening regulation, including EU rules on durability, recyclability, and end-of-life take-back programs. Companies that act early can turn compliance into a competitive advantage. 4. Business Model Innovation: Combining Levers Bain highlights that the highest-value creators combine circular feedstocks, life-extension strategies, and utilization models. Apparel companies are following suit: · Levi’s uses Water · Patagonia integrates regenerative agriculture with its Worn Wear resale platform to deepen customer loyalty. · H&M scales recycled inputs while piloting rental, resale, and repair services. · Hirundo shows that even small design choices — white uppers, standardized soles — can have outsized impact on cost, lead times, and inventory risk. 5. Strategic Takeaways Source reduction is first and foremost a profit lever. By reducing the amount of material, water, and energy used in production, apparel companies can directly lower their costs and protect their margins — turning sustainability into an operational advantage rather than just a compliance exercise. Growth follows credibility. Brands that measure their impact transparently and communicate it effectively win consumer trust, gain market share, and often command higher prices. Importantly, even small brands can unlock big gains. Hirundo’s redesign of its sneakers — with standardized soles and white uppers — shows that thoughtful design choices can improve working capital, shorten production cycles, and make made-to-order models viable. Finally, the most successful companies combine multiple levers — source reduction, circular feedstocks, and product life-extension strategies — to create a compounding effect that maximizes both environmental and financial value. Have a Great and Impactful week! Eduardo Serzedelo, Founder of Hirundo