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Leatherbiz Market Intelligence executive summary: • • • • •
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The momentum of the global industry’s shift from Europe to Asia has intensified The main beneficiaries are the largest operators on whom big consumer brands depend Those big, mass-market brands want uniformity, standardisation and a simpler supply chain There are few signs of a renaissance for leather But there is always hope, for example from the success of retro sneakers and the frequent appearance of leather clothing at recent fashion-week events If brands want to use leather more extensively, there is plenty of raw material available at affordable prices
MARKET INTELLIGENCE
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e are now in a phase of expecting little news from the leather pipeline. With the continuous decline in leather production in Europe, the centre of the leather industry has finally shifted to Asia. Asia begins at the Bosporus. This trend has been noticeable for a long time, but it has gained momentum in recent years. With the Lunar New Year celebrations in Asia from the end of January, a holiday shutdown has returned there and even in Asia the demand for leather is not so dynamic that producers feel they need to shorten their breaks to fulfil orders. On the contrary, many companies have extended the holiday period by as much as they can because they do not have enough orders at the moment to use their entire production capacity. We have reported this before. The beneficiaries of this development are clearly the large manufacturers who produce for the global brands and cannot be replaced too easily. The big brands in the mass market are striving for more and more uniformity, standardisation and a smaller number of suppliers in order to reduce the cost of control and logistics management. This favours the very large companies and is diametrically opposed to the logic of the traditional leather business. If you want to preserve the characteristics of leather, use its special features and emphasise it as a natural product, then this simply is not compatible with mass production. The days when the mere name of leather was enough to encourage consumers in many markets to buy a piece of furniture, a shoe or a car are long gone. Let us not even talk about the times when a leather jacket was almost a must in every wardrobe. So, if you
can no longer qualify the product as a mass material, then it has to find buyers through other characteristics and special features. Again, this is all in stark contrast to the current situation in the consumer goods markets and the wishes and strategies of the big brands. None of this need be particularly bad. In principle the number of hides and skins available worldwide could never meet the demand of 8 billion potential consumers for products that could be made from leather. Without the much-criticised alternative materials, the desires and needs of the current global population could not be met. Nobody can actually say today how large the market share of leather products would be in total production if all the available raw materials of hides and skins were actually utilised. If you add up all the sheep and goats, kangaroos, buffalo and so on, there would be a significant amount, but it would by no means be enough to achieve a dominant market share again. At the moment, it does not look as if leather is experiencing a renaissance as a material. There is always hope, and this is also the case now. A look at the latest fashion shows or the retro sneaker success, which is expanding into more and more models, could provide some hope. Many designers have put leather back onto the catwalks. However, this is an observation that we have been seeing for many years. Leather remains an attractive material for clothing, it has never lost its appeal and designers like to use it again and again because it is special and attracts attention. It's almost perverse when you consider how many big brands have been selling imitation products made of plastic with great success and in large volumes in recent years. This is unlikely to change in the coming seasons, because all you have to do now is assign the attribute ‘recycled’ to the item and
all your wishes and requirements will be fulfilled. The manufacturer can continue to operate with plastic and utilise the processing advantages, consumers get something that looks a bit like leather and leaves them with the belief that they have done something acceptable for the environment. For the moment, we have lost this battle and in doing so we are destroying a very large volume of naturally available raw material. Of course, hardly anyone notices this. On the other hand, however, it also shows that there would still be room for the sale of leather products in the clothing industry if manufacturers and retailers were prepared to focus on the material again. It is interesting that this is happening again at the moment with wool. Whilst studying the media over the last few weeks, two other notable pieces of information caught our eye. Firstly, that the era of Stella McCartney as fashion designer and standard-bearer of the anti-leather lobby seems to be over for the time being. After Kering initially took over the Stella McCartney brand, it passed into the hands of LVMH. Here too, a line has now been drawn, according to reports. It has often been speculated that the large groups were less interested in the designer’s work than in using her name to attract new consumers. We will see how this story continues. The real and decisive problem with regard to animal-based products remains, of course, that there is no objective discussion, only ideologies that clash and remain irreconcilable. Worldwide, the pendulum is currently swinging back but this doesn’t help much because this is not about a victory for one of the ideologies, but about an informed approach to the environment, food supply, culture and, of course, the use of animal byproducts. Less emotion and ideology and more expertise would help the cause and, in the end, especially the product we are concerned with: leather as a valuable material. We must take this opportunity to mention once again that we have not been using the available raw materials from animal skins for a long time now; at other times in history, this would have been seen as an intolerable waste. What is available and can be utilised was intended by nature to be used. Only the rise of alternatives (often of fossil origin), which are easier to use in production, has led to this situation. The India International Leather Fair has taken place in Chennai. The next Lineapelle is coming up in mid-February and in mid-March many people will meet again at APLF in Hong Kong. There will also be trade fairs for finished