Next generation leather is disrupting the textiles industry

Leather goods have long been a key profit driver for fashion and luxury houses and worldwide demand for leather goods such as handbags is only set to grow. Currently valued at 95.5 billion dollars, growth is set to surge to 122.7 billion dollars by the end of 2026, according to data published by Marketwatch.

This growing demand for leather and animal-derived materials is compounding the sustainability crisis and has an outsize impact on climate change, resource use, environmental degradation as well as public health, human rights, and animal welfare, according to Planet Tracker, an organisation that aims to change the practices of financial decision-makers to avoid ecological collapse.

This week Stella McCartney debuted a vegan leather luxury handbag made from mycelium to much fanfare, but the London-based fashion house remains niche in the sense that it doesn’t sell high volume goods.

With companies such as LVMH posting record profits for their fashion and leather goods categories, up 51 percent over 2019, consumers and companies alike are searching for sustainable alternatives that are functional, fashionable, and cost-effective.

New research from Planet Tracker explores what the fashion industry would look like without leather, and more importantly, what this would mean for the environment. Pioneers developing alternative textiles could soon be disrupting the leather goods market, but the effects will be far-reaching, not just for the environment, but also for farmers and those whose livelihoods depend on rearing and selling cattle.

Research led by Catherine Tubb Ph.D, Head of Textiles at Planet Tracker, highlight any disruption to the textile industry should give access to cheaper and better alternatives to the materials we use today. The winners will always be those that are superior and cheaper, meaning the disruption is inevitable from an economic point of view.

Bovine leather, the leather derived from cows, makes up over 65 percent of the global leather market, and over half is used to produce footwear. Dr Tubb notes that the leather industry itself is deeply inefficient as hides are limited in size and quality variable. Most significantly there is a lot of waste, not only from the processing part, but also simply in dealing with the non-conventional shapes that animal skins come in and much remains unused.

As new alternatives for leather emerge, many in the past were plastic derived, which accounts for most of the synthetic or faux vegan options. New ingredient-led possibilities, from lab grown solutions to next-gen bio-based materials offer alternatives away from fossil-based materials. This exciting new phase is already disrupting the industry and delivering a superior end product, one that shares the characteristics of leather, like suppleness, finish, durability, permeability and warmth.

FashionUnited asked Dr Tubb how material disruption would affect luxury companies and brands and what the incentives would be for them to join in the pioneering phase.

With luxury brands securing their leather years in advance, they suffer less from supply chain availability issues and they are better equipped at absorbing higher prices. Could this suggest the shift to leather alternatives by these companies is slower and less urgent?

Luxury goods companies also have the capital and the time to commit to finding better alternative sources of leather. So, while they have less immediate supply chain issues, they can invest in the new technologies now when a payoff may only be 3-5 years away. These next-gen materials come with other benefits that are attractive to luxury good companies, such as better environmental footprint including both production and end of life impacts. It is likely the luxury goods companies will be the first adopters as the products at first remain more expensive in cost (but costs will come down rapidly).

Ultimately technology and the emergence of new materials will triumph and disrupt the animal hides market, positively impacting deforestation and CO2 emittance. Realistically, how soon could these effects be seen?

The industry is still nascent and will require capital to scale up. However, once businesses and consumers get on board with the new technologies., the disruption is likely to be quicker than people expect. In 10 years, these technologies are likely to be so much better and so much cheaper it no longer makes economic sense to use the traditional animal sources for leather.

No time to waste

Each year, an unfathomable 4 billion land animals are slaughtered, plucked, or sheared for the materials industry. 25 percent of the world's carbon budget will be taken up by the fashion industry by 2050 if no changes are made. With over half of consumers open to purchasing leather alternatives due to the impact on the environment, this change cannot come soon enough.

Article sources: Planet Tracker and Material Innovation Initiative