The state of play

It is not difficult to understand the stress the pandemic has placed on an already challenged sector, as Stephen Sothmann, president of the Leather and Hide Council of America (LHCA), explains. “Even before the outbreak of Covid-19, the industry has been in free fall for about five years,” he says. “In 2014 slaughter levels dropped in the US and several other major beef producing countries, just as demand for leather was skyrocketing. A lot of this demand came from China, which has an emerging middle class with large amounts of disposable income.

“Prices went very high; hide that usually traded in the $40–60 range was going for $120 per piece,” he continues. “As a result, in 2015 many footwear producers started to phase out leather designs as they could not compete with these prices. They started incorporating plastic synthetics – and got really good at that. So, leather prices crashed and consumers didn’t really notice the difference.” The growth in demand for athletic and leisurewear has also meant that leather was used less in the manufacturing of sportswear and shoes.

The main issue with this dramatic reduction in demand is that leather is a by-product of animal slaughter: the process makes something that would be thrown away a valuable material. As a result, it is a very sustainable industry. However, if there is no demand for leather, it must be disposed of, as Sothmann explains. “In 2019 around 17% of hides went to landfill. The issue is that there is little that can be done with hide if it is not used for leather,” he says. “It can be turned into gelatin or collagen by boiling, but hide is not the best product for that. The material can clog the machine, and hair is very difficult to remove. Rendering companies can do something with the hide but leather is the best and most efficient option.”

Leather first

Despite it being a difficult year for the industry, it has not been all bad news for the LHCA. “We have been able to get money from the US government,” Sothmann says. “This was actually related to the trade war with China, which has helped fund our new consumer-facing marketing campaign. And, as an association, we are getting more involved in conversations about supply chains.”

Sothmann stresses that, while each industry body has their own agenda, these organisations will work together if the need arises. While the LHCA’s campaign is US-based, first and foremost it is designed to promote leather products in general. For example, it has launched competitions at a number of universities around the world to encourage fashion design students to work with leather. Other campaigns such as Leather Naturally, a global group that acts as a communication platform across the industry, and One for Leather, which was launched primarily by automotive leather producers, have their own objectives but are also working in the best interests of the industry as a whole.

All major leather-producing countries have an association or platform of some kind to promote their activities, including the US, France, Italy, Spain, Germany, Brazil, China and India. In the past four or five years these organisations have worked more closely than ever.

To Sothmann, the key is to work together to put leather first and ensure that the correct information is available to the consumer. This year has been a major win for the leather industry with the prevention of the term leather to describe any material that is not animal hide. “For years there had been a number of public attacks on the industry by animal rights groups and other campaigners that claimed leather producers were not following sustainable practices and that alternative ‘leathers’ made from plastic should be used instead,” Sothmann says. “Ensuring that manufacturers of these alternative materials cannot use the term leather to describe their product makes it easier for consumers to understand the quality of what they are buying and prevents other interest groups from profiting from the leather industry while attacking it.”

This common welfare approach has been highly beneficial for the industry, as tanneries can be incredibly disparate, marginal players that may not be involved on the global stage, but still impact public opinion of the industry as a whole. It is, therefore, vital that tanneries do not use unsustainable practices or contribute to environmental damage. As Sothmann says, “This has been a period of consolidation by the industry and governments. For example, waste water treatment plants have been built which, in turn, force companies to consolidate to be able to afford these developments without eliminating marginal players.

“This has meant that the supply chain is both very stretched out and in fewer hands, so if something goes wrong it has a more dramatic impact than if there were thousands of companies able to pick up the slack,” he continues. “It does feel as if one response to the current situation will be to have shorter, more local supply chains. If the goods have a shorter journey, it will be much easier to get them from A to B.”

What does the future hold?

The future of the leather industry will undoubtedly be shaped by the post-Covid work environment – in particular, the loss of trade shows and the move to digital content and networking. However, Sothmann points out that conducting face-to-face business is still important. “While it is much easier to log on to a call with colleagues around the world, saving valuable time and resources, it is not the same experience,” he says. “The leather industry holds a series of major events every year that are regular, consistent and give us the chance to gather, educate and network. We lose that with digital meetings: even though we can still see one another, it does not provide the same feeling or energy of face-to-face contact.

“I am not sure if we will go back to the previous ways, but I hope to be able to return to live events in the not-too-distant future,” Sothmann continues. “Campaigns and advocacy are much better when speaking with a room full of people or a show full of attendees – you can gather an entire industry in a room that would be more difficult to arrange by conference call.”

Another change that would be useful to the industry, in Sothmann’s view, is for the industry to get better at advocating for itself. Currently, there are a few senior figures that regularly speak for the industry and defend it from detractors or misinformation. “If more people were engaged on a local level and on social media, the industry could share the response and present a more uniform message around the world,” he says. “For example, when dealing with NGOs or opponents of the industry, they can simply pick 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.”

One of the industry’s biggest challenges is being able to get its message out to the consumer before they are confronted with misinformation. “For example, in the luxury goods market there have been a number of occasions that animal rights organisations have managed to push for major changes to purchasing and supply chains by convincing the sector of facts that had no credible source,” Sothmann says.

“And it’s nearly impossible to stop this,” he continues. “A case in point would be feedlot systems. We have them in the US, Canada, Brazil and Australia, although less so in the EU. Some NGOs expressed opposition to feedlots without any educational argument or evidence, and fashion houses suddenly decided that hides should not come from them anymore. Right away, that takes away about 90% of US hides, all Canadian and many Australian hides – pretty much all the main suppliers are no longer available, and for no reason.”