Key insights:
- Recreation Equipment Inc. (REI) has launched Path Ahead Ventures, a $30 million racial equity program.
- Thirty percent of people who recreate outdoors are people of color, but only one percent of outdoor brands are owned or led by people of color.
- The company has also committed to generating $1 billion in sales among brands led by people of color.
Sporting equipment company REI and its 20 million-member co-op have launched Path Ahead Ventures, a $30 million initiative to invest in 300 diverse founders by 2030.. The venture will include grant and accelerator programs for aspiring entrepreneurs of color and for those further along in their business.
Path Ahead Ventures will work with diverse founders through the Embark program, a three-month accelerator program with a $10,000 non-equity grant to develop their business. The Navigate program will offer a $25,000 non-equity grant and offer existing founders resources to scale their company, including help with production, distribution and publicity.
“We wanted to look at all corners of the organization and one place that we wanted to do more work was around what the composition of our suppliers looked like,” Susan Viscon, REI senior vice president of corporate development and investment, told The Plug. “We thought, ‘we’ll scout more founders of color into our shelves’ it was at that point that we realized there weren’t really as many diverse founders in the outdoor space.”
The company found that less than two percent of the brands that lined their shelves throughout most of the U.S. were owned by a company with at least one founder of color. The company said that this overwhelming white supply chain is not reflective of the future they track towards, prompting REI to think about the pipeline of diverse founders coming into the industry and working with existing founders.
“We know 30 percent of people who recreate in the outdoors are people of color, and that 40 percent of the U.S. population identifies as a person of color, so the dramatic drop off of people of color being one percent of our suppliers was such a wake-up call,” Viscon said.
In the U.S., the outdoor industry is a $459.8 billion sector, yet only about one percent of retail brands are owned or led by people of color. Beyond the dedicated $30 million fund, REI’s Path Ahead Ventures hopes to create a means to reach DEI goals the company has set. The company, based in Kent, Washington, has committed to adding at least 200 new brands that are owned or led by people of color to its assortment by 2030, generating $1 billion in cumulative sales and representing more than 15 percent of brands sold at REI.
Over the course of a few months, the company conducted over 100 interviews with founders, investors, industry leaders and community leaders to try and understand what the challenges are for founders of color in the outdoor industry.
“In some places, people didn’t see the outdoor industry as a place for them, and there’s gatekeepers. The racism and bias that you hear about is also present in the outdoor industry too,” Viscon said. From their research findings, the Greenlight vendor portal was launched so that any company can have an audience with REI procurement teams and buyers.
Large corporations like Apple, JP Morgan Chase, Target and countless others set aside $50 billion in funds towards the racial equity movement. Early analysis of these commitments has indicated that the communities that should be the recipient of the funds and equity programs often are not seeing the impact of this impact investing.
Viscon said REI has a strategy for thwarting this trend.
“REI is coupling the funds with our community network, those together will make a change,” Viscon said. ”It was the voices from the entrepreneurs that shaped where we landed. There are always conflicting opinions on what should or shouldn’t happen, but we kept going back to, ‘what were the founders saying?’ and built the program around that.”
The $30 million in funds will be distributed through Path Ahead Ventures’ non-equity grant programs and in the form of $100,000 to $250,000 equity investments. Embark is accepting applications for the first cohort through November 28 while Navigate will launch in 2022.
