The Adidas Group of Ger-many, which owns the formerly independent Reebok company, is using major athletic events such as the Super Bowl and the Summer Olympics in its battle to catch up with and surpass Nike, says Herbert Hainer, the chief executive of Adidas. The company, based in Bavaria, makes only 5 percent of its sales in Germany and uses English as its official language. Hainer was interviewed in New York. Here are excerpts:
Q: What was at stake for you in an event such as the Super Bowl?
A: With our Reebok brand, we are the exclusive supplier of jerseys for the whole National Football League. So both teams played in our shirts. We also had a lot of activities around the Super Bowl. We had a television advertising campaign. We had a booth where we hosted key retailers, and a lot of our NFL players were there giving autograph sessions and giving interviews to the media in support of our new products. The Super Bowl is definitely a huge event for us.
Q: Isn't your No. 1 marketing and branding challenge competing against Nike?
A: This is correct. When you look around the world, I think it's fair to say that it's becoming more and more a two-horse race. Nike is doing around $16 billion in sales and we are doing around $14 billion. The No. 3 player, Puma, is doing around $4 billion a year in sales. You can see the difference between the two giants and the rest of the pack.
Q: What is it like to compete against Nike, whose "swoosh" logo must be one of the most recognized symbols on the planet?
A: Around the world, the Adidas brand name and brand mark are more recognizable than Nike because our brand has existed for 70 years and Nike has been around for 30 years. Especially in Europe and Asia, the Adidas trademark and brand name are more known than Nike's. In the United States, it's a little bit different. But over all, we have a fairly good chance to fulfill our mission to become the leading sports company in the world.
Q: Why are events such as the Super Bowl and the Olympics so important in creating a brand?
A: Because there are so many people watching. I read that more than 1 billion viewers around the world would watch the Super Bowl.
And some 40 billion viewers, on an accumulated basis, are expected for the Olympics, meaning many people watch many separate events.
There is no better place to showcase your brand.
Q: Are the investments you make in these events cost-effective?
A: Most every event is cost- effective, which means it is profitable for us in immediate terms. When you look to the Olympics, however, that's a huge window to showcase a brand, but you don't make immediate sales out of the Olympics. No viewer is going to go to the store after watching a 5,000-meter runner. But it has a long-term effect.
Q: Are you concerned about air quality in Beijing for the Olympics?
A: We all know that there is pollution in Beijing and that the air is not the cleanest. I do believe the government will take a lot of actions. Four weeks before the games start, they will shut down all the factories within 50 kilometers of Beijing.
They will limit car traffic. I believe the government is taking the right actions. I have been in China 10 times in the past three or four years. There is pollution, no doubt. But you have a lot of other cities around the world where pollution is just as bad.
Q: And what about the newspaper columnists and human rights activists who say the Olympics should be used to force China to improve its human rights conditions?
A: I believe there will definitely be human rights organizations which will use this platform because the exposure is as valuable for them as it is for us. But I don't think it will influence the games negatively. I believe the best way going forward on human rights and pollution issues is to work cooperatively with the Chinese government and the Chinese people instead of permanently confronting them. Complaining and trying to nail them to the wall aren't effective. We have a lot of factories in China, and that's what we're trying to do to achieve progress -- we are working together with local communities and local factories to put in our standards, in terms of fair wages, social standards and working hours.
Q: Do you feel you and Nike have taken the necessary steps to address the concerns about sweatshop labor?
A: I do believe so. I can only speak for our company. We are more or less in the same places as Nike -- China, Indonesia, Vietnam and Cambodia. When you look back over the past 24 months, there was hardly any article criticizing the Adidas Group for not conforming to the standards we have set. We have the Standards of Engagement, where we clearly and contractually commit every supplier to certain standards, such as minimum wages, no child labor, no forced labor, social standards and working hours. We are in all the big indexes such as the Dow Jones sustainability index and the Financial Times Stock Exchange 4Good index. And we are working with a lot of nongovernmental organizations in individual countries.
Q: Are your sourcing patterns now identical to Nike's around the world?
A: I don't know Nike's patterns exactly, but we are more or less in the same areas, not always in the same factories. I believe Nike is trying to tackle the social and environmental critiques they get in a professional way as well.