In business science, however, Network Studies is an entirely different matter as it recognises that businesses selling to other businesses work more through relationships than via being impressed with advertising, price lists and promotions. Initially, these studies looked at the relationships between two companies, many of which endure for very long periods, with a lot of examples in the leather industry of supplier or customer partnerships lasting decades. Yet it was noted that these relationships do not stand-alone but are all linked into quite complex networks. Within these networks a company subtly adjusts its position, or find it adjusted for them, as some bonds strengthen while others weaken. 

One of the elements that causes change in relationships is shifts in pricing, which in the leather industry has mostly meant the ebb and flow of hide and skin prices. Generally speaking, the unmovable element has tended to be the retail price, so any raw material price rises impact the network via forcing change. Volume slows for all. Someone, or a number of actors, accepts reduced prices. The leather user redesigns articles to use less leather or brings in substitutes for some or all of the leather usage. This latter implies new entrants into the network, and certainly in this century a high proportion of tannery customers have been using some alternatives to leather for a proportion of their production. This establishment of new relationships outside of leather has consequences.

Plastic creates an opportunity and a threat

Last year, consumers were told that plastic material did not merely sit in landfill for many hundreds of years but was breaking down into micro particles and getting into the sea, and thus the food change. This was good news for leather as we assumed some of these links with synthetic producers would weaken and those with tanners strengthen again. It has not been so easy as many brands have become too tightly enmeshed with the new material and are reluctant to change. This is a battle for the leather industry to keep fighting. There are so many great reasons to use leather.

On the other hand, as we have often stated, the aggressive side of the vegan and animal rights groups have been pushing hard and have achieved significant, and noisy, growth in certain markets. They have wealth and see this as a vital moment to push hard. In many areas such as footwear, vegan materials have been an expanding area of some significance, and one stung by the complaints against plastic since they were promoting synthetic shoes and bags as environmentally superior to leather. So there has been a rush in this sector; not towards leather to replace plastics, but to any reasonable bio-based materials they can find.

H&M launch

The Asian launch this week in Manila of H&M’s Conscious Exclusive Collection for 2019 would have been taken for an April fool a few years ago, but this is serious. H&M makes it clear that this targets a vegan audience, but the items look likely to be attractive beyond that target. H&M is using relatively new materials in what is now their 9th capsule collection made from oranges, pineapples and algae. It is the first move of a fast fashion brand into what it sees as “sustainable” territory. On the way, it has been persuaded to go fur-free, not use exotic skins, and apparently drop angora and mohair but is using the long established cellulosic Tencel.

In rough terms, for the H&M materials Orange Fiber from Italy replaces silk, Bloom from the U.S. is a largely protein-based footwear foam with natural thermoplastic qualities, while Piñatex, based on pineapple waste mostly from the Philippines, is finished in Spain and replaces leather. They represent only three of an ever enlarging range of materials entering the field. Many come from the entrepreneurial mentality of young people from college who worked on their ideas as part of a university course and moved directly to start up; some bright brains, who we could do with in the leather industry as we look to re-imagine leather for modern times.

Some look as though the environmental credentials will not withstand scrutiny when they go to bulk, as they use large amounts of energy and water but quite a few, such as Piñatex are proven in bulk and do offer leather worthy competition. No April fool here.

Strong competition with a lot of buzz already created with brands and significant consumer segments. It has gone past false naming, which we must still fight, but is about performance and environmental credentials.

Dr Mike Redwood

April 3, 2019

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.