A shoe outsole and method of manufacture wherein the outsole, or various components thereof such as various inserts and/or additional layers associated with a particular outsole, are formed using various scrap materials generated during the shoe manufacturing process such as leather, leather dust, jute, and other fibrous material, the scrap materials being used as a filler material and being mixed with various elastomeric materials to form the shoe outsole and various components thereof. The outsole can be formed as a substantially one-piece unit, or it can be formed as a base sole layer having one or more additional layers associated therewith including inserts associated with the forefoot and heel regions of the outsole.