The impact of the coronavirus has been felt globally, and across all sectors, with leather being no exception. With a stuttered recovery having only just begun before the pandemic hit, prices have tumbled back again and the future looks uncertain. Matthew Rogerson talks with Stephen Sothmann, president of the Leather and Hide Council of America, to hear more about the state of the industry and thoughts on what impact Covid-19 is having on the sector.
There has been a lot of coverage in the news recently about the falling value of hides, how much of this is a result of the pandemic?
Stephen Sothmann: The falling prices have been occurring since well before the coronavirus; the pandemic has simply exacerbated the problem.
To provide context, in 2014, slaughter levels dropped pretty low in the US, just as demand for leather skyrocketed from the emerging wealthy middle class in markets like China. Prices went through the roof – hide that historically sold at $40–60 per piece was up to $120 per piece. As a result, in 2015 the market and especially the footwear producers – footwear consumes the most leather in the world – looked at these prices and thought ‘we have to figure out ways to get leather out of our designs’. So they started incorporating a lot of plastic synthetics into the materials; some of them went to textiles and other things but the vast majority of it was plastic synthetics, which they then got really good at making.
Leather prices crashed because of it. And consumers really didn’t notice the difference. It decimated the industry and we haven’t really come back. Last year, we got to a point in the US where we actually landfilled about 17% of our hides that were produced. The rate for landfill would be much higher globally. The US provides one of the higherquality raw materials, so, if we are composting 17% of our hides, other countries would be witnessing a much higher rate. The problem is that there is not a lot you can do with the hide if you don’t turn it into leather; it can be converted into collagen or gelatine but hides are not the best for that, and it’s messy and cumbersome, so most rendering companies do not want to get involved.
How has the council responded?
We have been able to get money from the US government. That was actually related to the trade war with China that has helped fund a kind of new marketing campaign that we’ve launched. So that’s a consumer-facing brand and consumer-facing campaign. Then, as an association, we’re moving more into that supply chain conversation space.
While there are other groups out there doing their own thing, we do all work together should the need arise. For example, we have our campaign, which is US-based, but we’re first and foremost promoting leather and then, secondly, we will be promoting US products.
Leather Naturally, another campaign, is more of a global group – for which a number of leather industry players are involved in – that acts as a communications platform across the industry.
One for Leather is another campaign that was launched primarily by the auto leather guys. They recognise that the auto companies have very specific needs from an education perspective. Our group is doing design competitions with a number of different universities around the world to get fashion design students looking at leather as a material of choice. Hopefully, we can get those designers interested in using leather as they are ‘up and coming’.
In terms of associations, all the major leather producing countries have some sort of platform to promote their activities: US, France, Italy, Spain to an extent, Germany; then you have Brazil; China is possibly the biggest and India is also a key player. Though in the past there was less partnership between them, this has all changed in the past four or five years as the leather industry has really come together and is working much more closely with each other.
Has this been accelerated or hindered by Covid-19?
There are a couple of key developments that one can see coming out of this pandemic. The first major one is trade shows. In leather, there are three or four major shows each year, with Hong Kong, Shanghai and Milan featuring fairly heavily, and then a number of satellite or regional shows that are also seen as must-attend, which means it’s a heavy travel schedule. In the post pandemic world, I would expect a drop in attendance for live shows, as people continue to use screens and digital assets to conduct business rather than jumping on to a plane and spending hours flying back and forth across the world. It might not be a perfect solution that we have currently, but concern over social distancing seems set to stay for a while, even if there was an all-clear on the horizon.
The second area would be in plants. There is no such thing as social distancing in plants currently. In the meat side of the industry, they work within 6ft of each other in a meatpacking plant. In a modern one you’re shoulder to shoulder with the guys you’re working with. It’s a conveyor belt and it’s moving product very quickly. It’s all stainless steel, tight dimensions and cold, making it easy to clean and prevent contamination or pathogens from getting to the meat, which is a primary focus but it’s not great for a respiratory issue or prevention of quick spread of the coronavirus. There will definitely be changes in this layout and processes.
There are already temporary measures in place in packing plants in order to operate. It’s an example of the competing themes in the industry – food safety management is the fundamental concern of these companies, but now they have to act in a very different way to prevent the spread of coronavirus, and the two are not necessarily symbiotic. In addition, I do think you’re going to continue to see people looking at their supply chains pretty closely and saying, ‘okay, where is my material coming from?’ If you have one that goes through six, seven or eight countries and one of those countries goes down or offline for any reason, you have a major interruption to the chain. I think it will get to the point where people think, ‘I’m not going to rely for 80% of my product on one country; I have to diversify’. Whether that involves going into new markets or something else I’m not sure. Also, the leather industry does not all follow one direction or rule; what is true for leather in automotive is not necessarily the same for fashion.
Do you see anything coming out of all this that could be beneficial to the industry?
One useful action would be if the industry could become better at advocating for itself. At the moment, there are a couple of senior figures who are permanently engaged in speaking for the industry and defending it from detractors or misinformation. Granted, it is our job and pleasure to do so, but we are only a handful of people, and we have not got the capacity or oversight to manage the entire social media presence.
For example, when dealing with NGOs or those that are critical of the industry, they can simply pick up a single inaccurate bit of information and present it as truth. We have to defend the position or address it, even if it’s woefully incorrect or spurious, and we have to pull focus from our other campaigns to do so. Ultimately there is no loss to the person behind the misinformation; they can get a sound bite or cause to rally against. But, with so few of us available to address this, we lose out on being able to set out our own message and accurate information. If we could have more advocating for their companies and the sector it would help to stave off these resource-sapping, false attacks.
One of our biggest challenges is being able to get our information side by side in front of the right people without them being convinced on misinformation or following a red herring cause. It’s a race to get the information to the right person as, a lot of the time, the first one to reach said person convinces them – if the misinformation gets there first, we have kind of lost the impetus and no matter how informed I am or how well I make my case they are stuck believing the incorrect information.
For example, in the luxury goods market there have been a number of times that an animal rights NGO has managed to convince the sector of something that has resulted in major changes to their purchasing or supply chains that are nearly catastrophic, and majoritively have no basis.
One of the major luxury conglomerates may want to be seen as the most sustainable and I understand the strategy but they will partner with either a very obscure partner or NGO and say that they have learned all this information, and will be taking steps forward based on not the most credible source. And it’s nearly impossible to shake them of this idea; a case in point would be feedlot systems. We have them in the US, Canada, Brazil, Australia, for example – not really in the EU market, but most of the rest of the world. NGOs came out saying feedlots are terrible, without any educational argument or evidence behind it, and the fashion houses suddenly say feedlots are terrible and we can’t have any hides coming from them. Right away you have taken away 90% of US hides, all Canadian, many Australian – pretty much all your main suppliers are no longer available and for no reason.
If more figures would engage at a local or federal level, we could share the response and manage a more uniform communication globally.
17%
Amount of hides landfilled by the US in 2019.
Leather and Hide Council of America
LHCA/USHSLA affiliations
North American Meat Institute
USHSLA is closely aligned with the North American Meat Institute. Both associations work together to enhance the value and quality of US meat and hide products.
USDA-ARS Eastern Regional Research Center (ERRC)
The ERRC has responsibility for fundamental, applied and developmental research on agricultural commodities, including milk, meat, poultry, hides, leather, wool, fats, oils, fruits, vegetables and juices. The ERRC has a number of hides and skins-related research projects under way, and USHSLA is supportive of its efforts.
American Leather Chemists Association
Founded by tanners and leather chemists in 1903, the American Leather Chemists Association provides agricultural chemical research and analytical testing methods.
Leather Industries of America
One of the oldest trade associations in the US, the Leather Industries of America has represented tanners and leather suppliers since 1917.
USDA Foreign Agricultural Service (FAS)
FAS provides valuable trade statistics for US commodities, including weekly sales reports on hides and skins.
Leather Naturally
Leather Naturally promotes the use of globally manufactured sustainable leather and seeks to inspire and inform designers, creators and consumers about its beauty, quality and versatility. Its website is a key resource for information about modern leather manufacturing and the part it plays in a more sustainable society.
Source: Leather and Hide Council of America
| LHCA (USHSLA) board of directors | |
| Jay Jensen, chairman
Southwest Hide |
Alexa Ruhlander
Elliot Hide Company |
| Tim Ng,
vice-chairman CK International |
Bradley Grove
Twin City Hide |
| David Howell,
secretary/treasurer Cargill |
Benjamin Ganz
AJ Hollander Enterprises |
| Steve Schroeder Jr
Atlas Refinery |
Adam Vrijhof
JBS USA |
| Chad Robertson
Harland M Braun/ Braun Export |
Ed Godsalve
Bank Bros & Son |
| Sam Gurka
CAM Trading |
|
