Cooperatives around the world: REI

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In Latin the word REI means ‘stuff’. A very appropriate name for a small store that opened in 1938 in Seattle, WA, to obtain and provide ice axes and other gear for climbing enthusiasts in the US west coast. Mary and Lloyd Anderson decided to start their small enterprise as a cooperative, alongside 21 other fans of mountain climbing, and today it’s still that, a coop. The name REI really stands for Recreational Equipment, Inc.

Mount Hood, one of the
Cascades Mountains.

For decades REI remained specialized, purveying quality gear to climbers, hikers, and expert mountaineers. They had such a good reputation in their field that REI’s first full time employee was none other than Jim Whittaker, the first American to climb Mount Everest.

With time they expanded their business model to include outdoor gear for camping, kayaking and many other rugged outdoor sports and activities. In the 80s they started manufacturing their own gear and making sportswear as well, and today REI stands out for both the quality and the price of all their gear.

REI is the largest consumer cooperative in the U.S., with over six million members. They have 136 stores, and their annual revenue for 2015 was $2.4 billion. Members receive an annual dividend that on average is 10% of what they spent on REI purchases that year. The membership fee is $20.

In addition to gear and clothing, REI offers experiences under their Adventures section. Trips all over the world that specialize in the outdoors approach: hiking, climbs, safaris and cultural excursions in the farthest reaches of the planet. Even more interesting, these trips are built with the lowest possible impact on the environment.

And that’s where REI stands apart from other companies of this kind. They plan on keeping

They make really cool
(and high quality) gear.

their sales business plan, while at the same time evolving to become 100% sustainable by 2020. This is how they plan to accomplish it:

They will eliminate REI’s carbon footprint through measures such as the use of solar energy in their stores, and the use of renewable energies when they’re forced to buy them.

They aim to reduce their waste-to-landfill output to zero through improvements in recycling and the detection of reusable waste materials.

They are reducing their use of paper company-wide, buying recycled material paper products only, and making the most of their electronic communications.

They will introduce sustainable design in all the upcoming REI buildings.

And to finish, the most important measure: they will create gear and clothing as sustainably as possible. To this end, they’re trying to remove or reduce the usage of any environmentally damaging compounds in the creation of their gear, while working close with

the Sustainable Clothing Coalition and other similar groups that aim to reduce the impact of clothing manufacture on the environment, throughout the process: the gathering of raw materials, the crafting process, the consumer usage life and its eventual disposal.

REI also has stringent policies when it comes to offering other brands in their stores and catalogs, limiting the use of non-recycled materials and even banning gear and clothing made using a list of specific chemicals that they consider unacceptable in manufacture for consumer use.

It’s an amazing business model, one of the best. Socially, they offer their employees a number of unique benefits, which in turn provide them with high staff loyalty. Add that to their good name as stewards for the environment, and you can see easily how they are destroying their competition. In a time when social values, environmental protection and the quality-to-price ratio are key factors, REI is king.

Merry Christmas!

This blog (or rather, its author) will be on vacation and there won't be a December 31 article. See you again on January 10!