Is the Chinese Luxury Market’s Appetite for Leather Sustainable?

    China’s economic rise has helped drive an unprecedented boom in luxury leather goods, but is this consumer demand sustainable?
    A good quality leather in various colors. Photo: Shutterstock
    Sam GaskinAuthor
      Published   in Finance

    China’s economic rise has helped drive an unprecedented boom in luxury leather goods. That's leaving many fashion and accessories brands scrambling for either product to meet the seemingly insatiable demand--or for ethical alternatives to leather.

    France's Hermès International, for example, is just one of the brands having trouble sourcing quality hides. There are few animals coddled enough to produce the high-quality leather luxury brands require, according to a recent report from Bloomberg. The shortage raises questions about whether luxury brands can maintain their existing standards, and at what cost to the environment, and to animal welfare.

    In 2016, driven by increased consumption of luxury brands, Chinese imports of finished leather products surpassed imports of raw leather materials in value for the first time. Used in high-end handbags, watch straps, wallets, shoes, and apparel, leather is widely understood as a luxury material. Leather goods constituted almost 30 percent of the personal luxury market in 2014, up from 18 percent in 2003. Management consultancy Bain & Company reports that in 2015 the global market for leather accessories was worth 43 billion euros (46 billion).

    The luxury leather goods market has become so lucrative that brands that historically didn’t produce any leather items have rushed into the market. According to Exane BNP Paribas, 10 to 15 years ago Louis Vuitton and Gucci were the only accessories-focused luxury brands. Today, almost every brand under LVMH, Kering, and Richemont sell leather goods, in addition to many others.

    In order to keep up with demand, luxury brands have worked hard to tie up access to the best hides. Business of Fashion reports that in recent years: LVMH has entered a partnership with Tannerie Masure in Belgium and taken control of Heng Long and Tanneries Roux; Hermes acquired Tanneries d’Annonay in France; Kering took over exotic leather specialist France Croco; Chanel acquired lambskin business Bodin Joyeux.

    As with China's appetite for fur, its growing demand for luxury leather is a concern for many environmentalists and animal rights activists. According to PETA, more than a billion animals are killed in the global leather industry.

    That number is a little misleading, however, because leather is largely a byproduct of the meat industry. The flagship “box” leather used by Hermès, for instance, comes from calves raised in France and slaughtered for veal. The luxury brand most famous for its Birkin handbag says that their cattle and sheep leather “comes exclusively from animals raised for their meat.”

    Hermès also use exotic leathers that may not be the byproducts of meat consumption, however, including crocodile, alligator, lizard, and ostrich.

    Su Pei, CEO of activist group AsiaACT said, “while animals continue to be farmed—whether for food or their fibre—their welfare must be addressed, including cattle for leather and sheep for wool.”

    The harms of leather production have prompted some luxury brands to explore alternatives made from materials such as pineapple waste, apple peels, mushrooms, kombucha, and wine. Also, U.S. company Modern Meadow is experimenting with lab-grown leather.

    Yet the prevailing strategy among luxury brands is not to stop using leather but to reassure consumers it has come from sustainable, ethical sources.

    Kering provided Jing Daily with its Standards for Raw Materials: Hides and Skins for Leather, which include “full traceability”, zero involvement in the “deforestation in the Amazon biome”, and Kering’s animal welfare standards. Their standards for “Precious Skins”, including crocodilians, snakes, lizards, birds, fish, and deer, include not using endangered species or illegally trafficked species.

    Similarly, Hermes told us, “All leather used for Hermès manufacturing needs are directly purchased from tanneries, with no intermediaries. The vast majority of the needs are covered by in House tanneries, and by French, Italian, German and Spanish tanneries, all of which must adhere to European standards, which are some of the highest in the world for the industry.”

    They also cite the quality of their leather as evidence that the animals were treated humanely. “Hermes uses only full-grain leather, the top part of the skin, in an unadulterated condition. To maintain consistency in the finished product it also only uses entire hides.” It is believed you only get good hides from animals that are well treated.

    That’s a sentiment shared by New Zealand Light Leathers (NZLL), which produces finished deer nappa for global luxury brands, as well as Chinese brands.

    Barry Parsons, the International Luxury Sales Manager of New Zealand Light Leathers, said “a lot of the brands now want to know where the skins have come from and I see that as such a positive for New Zealand farmed deer as the animals are farmed to a very high standard of care. Consumers like to know that animals have been well farmed,” he said. “It’s a big benefit.”

    For some, that's not good enough. Stella McCartney, who uses neither fur nor leather, has even partnered with Bolt Threads, a San Francisco-based biotech firm that produces vegan-friendly silk using yeast.

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