Making leather has never been easy. The very concept of taking a highly variable raw material and turning it into something that is regular, long-lasting and beautiful is mindboggling in itself. That’s before all the warnings about the variations that come from breed, sex, age, husbandry and the more or less infinite uses that have been found for leather, each with specific performance demands.
Right now, trade is particularly bad. We often hear about a struggling company being hit by “a perfect storm” but despite the idea being derided in some circles, the term “polycrisis” still makes more sense. The core concern of the polycrisis concept is that a crisis in one global system will cascade (or spill over) into other global systems, creating or worsening crises there.
Business interruption as seen in the pandemic, supply chain resilience costs, sudden inflation, interest rate rises, labour shortages and consumer worries all create a tough background where a small new setback can be enough to trigger failure for any tanner in a weak position.
Every tanner’s risk analysis
Will Russia’s invasion of Ukraine escalate? How will the relentless governmental changes in Africa impact trade? Will the 2024 US PresidentIal election next year lead to isolationism and retribution. Will global warming increase global migration, more extreme weather events and changes in agriculture and industry? What will be the impact of the expansion of BRICS? What other possibilities need to be factored into every tanner’s risk analysis?
For a concerned leather industry, the All China Leather Exhibition (ACLE) in Shanghai has come as a relief. It was busy and business was done. Not unexpectedly, it has clearly redefined itself as a Chinese show, leaving the next APLF in Hong Kong to reclaim its role as the global trade fair for leather. Regardless, China remains so large and important domestically and in terms of international trade that it still dictates the health of the leather industry.
Avoid the commodity trap
It does still mean that most of the industry remains fearful about future orders and one message from the year so far must be to avoid sliding into the commodity trap. When short of business, it is too easy to take on marginal business that “at least covers the overheads” and involves making leather that looks like plastic.
It is a moment to look again at the 50-year-old management tool of Perceptual Mapping and remind ourselves what we were looking at over a decade ago. This simple tool is used to plot the interrelationships of consumer products, industrial goods, and other items. Anything that can be rated on a range of attributes can be mapped to show their relative positions in relation to other subjects and to help evaluative those attributes.
Start mapping price against quality
They are used for market segmentation, concept evaluation, and tracking changes in marketplace perceptions. The most common coordinates used, and often a good place to start, is mapping price against quality, although a clever marketer will look for alternate coordinates to gain more insights. This data must be collected, assessed and then presented in the Perceptual Map. For leather more than a decade ago, we were concerned with the increasing improvement in coated plastics and the attack at both the top and the lower end of the market.
A couple of years later that attack intensified with the arrival of so-called biomaterials which promised to match leather without being dependent on fossil fuels. They have run into the problems of over-promising and underdelivering and are being overtaken by adaptations using bioplastics.
Consequently, the price vs quality picture has kept changing. A deeper dive shows issues related to longevity and durability, achieving minimal specifications, appearance and handle, and of course natural/oil-based content. If some of our clever readers have Perceptual Maps of these it would be good to share them as it would greatly help explain why tanners must push leather in the right direction.
Generally speaking, plastics have been discredited by the uncovering of errors in the Higg MSI calculations and the arguments built upon them, along with the knowledge of end-of-life issues, damage to ocean life and difficulties in collection and recycling. In longevity terms they delaminate too easily and so it is only in a non-woven, suede finish, form that they offer much durability.
Matching a grain look has also been a problem for the biomaterials. Trying to build a grain appearance using leather finishes and prints has not succeeded and so most of the articles do not look or feel very good. Hence the brilliant suggestion in the recent print version of ILM from the CEO of Ecco that a biomaterial soling material could be a step forward in making footwear that has a simpler end of life: offering value without wasting time copying a grain look.
Many new materials are quite expensive
The message from the Perceptual Map is that leather must fight for the top right corner, where price and quality is high. The evidence of the decade is that it is performance and beauty that makes the difference for the consumer, with performance adding all the aspects of longevity, traceability and responsibility that tanners know are now necessary to being fully fit for purpose.
Diving into the world of the commodity, despite international pressures to view raw and semi-processed material as a commodity in our trading, will allow the low-cost plastics to keep making inroads and push more hides and skins into landfill.
It is the tanner’s choice whether to accelerate towards success or drive off the road.