The use of 3D printing to produce custom components of athletic shoes for the general consumer market is in the early stages of what promises to be a long road. The race between Nike (NYSE:NKE), Adidas (NASDAQOTH:ADDYY), Under Armor (NYSE:UAA), and New Balance essentially started late last year, picked up pace this year, and promises still more jostling for position in 2016 and 2017.
First, let's take a look at why this technology offers so much promise to these companies and their investors. Then we'll address this question: How do their accomplishments and plans stack up?
A race worth running
The potentially huge market for custom-made athletic shoes and the outsize profit margins they should generate are why the industry's key players are going all-in on 3D printing for the general consumer footwear market. Being first to cross the finish line will be important, because first-mover advantages can be lasting.
Globally, the athletic footwear market generates approximately $80 billion a year in sales, according to Statista. Moreover, it has the potential to significantly expand for two main reasons: Consumers in the U.S. are increasingly wearing athletic shoes for more casual occasions, and middle class populations in developing countries are ballooning, filled with people hungry for products they couldn't previously afford.
Growth dynamics in the U.S. athletic footwear industry have been particularly attractive in recent years. In 2015, the industry grew by 8% to $17.2 billion in revenue, according to industry tracker The NPD Group.
3D-printed customized shoes will surely be priced at a premium, allowing for a greater profit margin for athletic shoe companies -- at least eventually, once 3D printing technology further advances. Primarily, the issue now is speed.
Here's a look at the players in order of their most recent notable event.
Player No. 1: Under Armour
Player stats: $17.8 billion market cap; 0.8% one-year total stock return; 404% five-year return. (Data to March 25.)
Most recent major event (March 2016): Baltimore-based Under Armour came out of stealth mode with its mid-March launch of the UA Architech, a multipurpose training shoe with a 3D-printed lattice-structure midsole. The limited edition of 96 pairs sold out very quickly at $300 a pop.
Win: This launch vaulted the relative newcomer to the athletic shoe category ahead of industry titans Nike and Adidas and well-established New Balance in the race to bring a 3D-printed athletic shoe to the general consumer market. Nike and New Balance, however, have already used 3D printing to make extremely limited-edition football spikes and cleats for elite athletes.
Assist by: 3D Systems (selective laser sintering, or SLS, 3D-printing technology) and Autodesk (its Within software used for generative design). There's no indication Under Armour is officially partnering with either company.
Future plans: Intends to release several other 3D-printed shoe models this year, and offer custom 3D-printed shoes in the future. No details or target dates provided on the latter.
Player No. 2: New Balance
Player stats: Not available -- privately held company.
Most recent major event (November 2015): New Balance announced plans to launch a limited-edition running shoe with a 3D-printed midsole in its hometown of Boston in April to coincide with that city's famous marathon. The shoes will then be made available in select New Balance retail locations around the world. The midsoles were produced by 3D-printing an elastomeric material (elastomers are polymers that are light and flexible, yet strong) into a honeycomb-like structure.
Win (likely): In April, New Balance will become the first company that offers a 3D-printed running shoe to the general consumer market.
Assists by: 3D Systems (SLS tech), with which New Balance is officially collaborating.
Future plans: The company said it will offer customized running shoes to consumers in 2017, though it has yet to provide details.
Player No. 3: Nike
Player stats: $105 billion market cap; 23.8% one-year stock total return (includes dividends); 243% five-year total return. (Data to March 25.)
Most recent major event (October 2015): At its investors day event, the Oregon-based behemoth announced plans to turbocharge its 3D-printing efforts. "Very recently, we've made a series of design and manufacturing discoveries with 3D printing that we believe will allow us to deliver a completely new, personal, performance cushioning system," said Chief Operating Officer Eric Sprunk. As part of this initiative, Nike plans to build a 125,000-square-foot innovation hub called the Advanced Product Creation Center, which will house technologies such as 3D printing.
Assists by: None known yet. My speculation: Carbon3D will be involved. This well-funded start-up plans to launch a super-fast 3D printer in 2016 that reportedly excels at producing elastomers. Carbon3D announced last spring that an unnamed "athletic apparel" company was testing a 3D printer based on its Continuous Liquid Interface Production (CLIP) technology. I believe it's likely that company was Nike. (My second guess is Under Armour.)
Previous win: Nike has yet to 3D-print an athletic shoe that's available for sale to the general consumer market. However, it owns a big "first": Its Vapor Laser Talon cleat with a 3D-printed plate was the first athletic shoe ever produced with a 3D-printed component. The Vapor launched in early 2013 in a very limited edition for professional athletes.
Future plans: We'll likely be hearing more concrete details soon.
Player No. 4: Adidas
Player stats: $22.9 billion market cap; 49.9% one-year stock total return (includes dividends); 96% five-year total return. (Data to March 25.)
Most recent major event (October 2015): The German company unveiled Futurecraft 3D, its concept for producing a running shoe with a 3D-printed midsole customized to provide the right fit and cushioning for each customer's foot. Adidas envisions people coming into its retail stores to have their feet digitally scanned, then running on a treadmill to provide biomechanical information. This data would be used to 3D-print the custom midsoles.
Assist by: Materialise (NASDAQ:MTLS), with which Adidas is officially partnering. Materialise has a significant 3D-printing services operation, including selective laser sintering capabilities. I don't believe Adidas announced what tech it was planning to use, but it seems safe to say that it's almost surely SLS, as it's emerging as the method of choice for producing custom 3D-printed midsoles.
Future plans: Adidas Chief Marketing Officer Eric Liedkte was quoted last October by Fast Company Design as saying, "Ideally we would have a limited product -- and I mean limited -- in [stores in] the summer of 2016."
Investors in the athletic apparel and shoe space have been richly rewarded by Nike and Adidas -- their stocks have been on a tear over the last year, crushing the broader market. The same is true of Nike and Under Armour shares over longer terms. Bottom line: Customized 3D-printed athletic shoes could help keep the stock-return party going.