A made-in-America apparel brand describes how Walmart helped it produce a more affordable US flag T-shirt

• Made-in-US apparel brand American Giant makes two versions of the iconic American flag T-shirt.
• Its top-quality version sells for $65, while one available at Walmart sells for $12.98.
• AG's founder said Walmart's scale and long-term commitment were key to a more affordable product.

Check the tags on much of the American flag-themed apparel being worn this Independence Day weekend, and the country of origin may be somewhere other than the US. Making stuff overseas is typically cheaper, after all.

That doesn't sit well with Bayard Winthrop, the founder of California-based apparel brand American Giant.

"We can think of a lot of other mainstream brands or retailers that certainly don't abide by that for Fourth of July — or for any other thing," he told Business Insider.

Bayard founded American Giant in 2011 with the mission of revitalizing US textile manufacturing, starting with what it dubbed "the greatest hoodie ever made."

In recent years, the company celebrated Independence Day with a version of the iconic American flag T-shirt made entirely in the US.

But Bayard said it was a challenge to achieve the kinds of production efficiencies that can lower costs.

American factories can produce high-quality clothing, but it often comes at a premium price. For example, American Giant's website lists this year's US flag tee for $65.

Bayard said the reasons for this include finer yarns and a more labor-intensive sewing process.

"Those products are premium," he said. "They're optimized for top, top quality."

About two years ago, Walmart approached him with a challenge to produce a made-in-US T-shirt at the retail giant's famously low prices. This was part of what is now a $350 billion commitment to invest in sourcing products that support American jobs until 2030.

At the time, Bayard thought that the lowest possible price for an American-made shirt would have been $20 and that it would be "incredibly difficult" to make.

The companies were able to make a shirt that is now available online and across roughly 1,500 Walmart stores for $12.98 — one-fifth of the price of the top-of-the-line version.

American Giant developed a design that lowered costs by using a slightly thicker yarn and a tubular-knit pattern, rather than the side-sewn style of his main shirts, Bayard said.

"But the vastly more important part of the costing is when you have Walmart and the volumes that they put there — which are huge — and staying committed to the program for an extended period of time," he said.

Bayard stands firmly behind the quality of the less expensive Walmart product.

"We think we're putting great quality stuff into the market, and we're offering these different entry points for customers," he said.

Bayard said the first design for Walmart, released last year, exceeded sales expectations and was expanded to include four styles this year.

The episode highlights one of the major hurdles to bringing back US manufacturing more broadly. The costs of starting (or restarting) industrial production can be both daunting and inefficient. (Look no further than the complicated and expensive process one team had to go through to make a grill scrubber entirely in the US.)

If the effort to revive US manufacturing is going to succeed, Bayard said that small and large companies need to work together with sustained, long-term commitments that help the supply chain develop and become more cost-effective.

"Poking at the problem with your 500-unit volumes" is "admirable," he said. "But if you actually want to make an impact, get serious about it and figure out ways to join forces with somebody like Walmart that's actually trying to do something good."