12 January, 2019 - 15 January, 2019
Riva del Garda (Tn), Italy
14 January, 2019 - 17 January, 2019
Sao Paulo, Brazil
15 January, 2019 - 16 January, 2019
New York NY, U.S
17 January, 2019 - 19 January, 2019
22 January, 2019 - 25 January, 2019
After a year of stock market calm, it is hard to ignore the sudden volatility of the past few days. It is a volatility heightened by the wide use of computerisation to take instant buy and sell decisions.
At the time of the 2008 financial crisis we discovered how different the leather supply chain is when some less understanding executives in the automobile industry switched off purchasing at a stroke, without realising they were an element in a conveyor that did not have an off switch. There is no computer which can intervene and stop the relentless process of birth, life and death in the livestock world. This is even more the case especially where just-in-time thinking is now applied and the provision for curing and hide storage is no longer available at the abattoir. If the hides do not flow on to the next customer they will putrefy.
The key point here is that leather is not an easily managed commodity, and it is vital that we keep it so. The more we make leather like a commodity the poorer the future will become. Margins in selling leather are not high enough and we often blame that on the inequity with big brands and equally big hide and meat packers squeezing the tanners in the middle. In reality much of the blame actually lies with tanners selling leather too cheaply. For far too long we have spent our efforts in making leather look and behave like plastic. This forces it into the commodity bracket, and a low pricing. Generally speaking these more plastic looking leathers will not last as long as other leathers, and the articles will be harder to repair. Both are becoming increasingly important these days.
If you are based in a country with a poor environmental record, the price you can get for your leather drops again, so a downward cycle is created as tanners cheat on CSR in order to reduce costs and recover margin, but that very action destroys their margin further, and ruins the reputation of the product for all leather makers.
Tanners need to recognise why consumers like their leather and work to steadily raise its value and price. Some say that raising prices will do no more than reduce demand and create serious problems but in this area leather is more likely to become a ‘Veblen’ good, whose demand rises with price, if the offer is correctly put together. Up until now I have suggested that following the Santa Croce route of making fashionable, textured leathers with a fabulous feel from less than perfect raw grades would be enough. In today’s circumstances it appears that tanners will have to do much more in terms of adjusting the offer to meet the expectations of the 21st century consumer.
Making incredible leathers must become a routine but we need to go even deeper. Nature has given us an incredible raw material and up until now we have processed it in a way manufacturing terminology classes as a “conditioning” process. Now we need to rethink our processing approach and reconsider how we work with the structure and the chemistry of our hides and skins and do some mental, and perhaps physical, deconstruction and rebuilding.
Leather has always been evolving as it has lost end uses to pottery, glass, paper, metal, textiles and plastics. Tanners have adjusted it to fit the tastes and fashions of the time, as well as the technologies and performance requirements. This is the moment to match the new global volatility with pushing leather to new heights. But it is not a mere adjustment with the ebb and flow of the tide that is required; it is a tidal wave in performance and thinking.
Dr Mike Redwood
February 6, 2018
Follow Dr Mike Redwood on twitter: @michaelredwood
Publication and Copyright of "Redwood Comment" remains with the publishers of International Leather Maker. The articles cannot be reproduced in any way without the express permission of the publisher.