The leather industry is a truly global industry, with supply chains that extend across the World and total exports in 2017 exceeding US$157 billion. However, the industry is experiencing difficulties with falling demand and prices, for leather. For some time, there has been a decline in leather consumption by the footwear sector, still the largest consumer of leather but considerably reduced, having fallen from 67.9% in 1990 to 46.8% in 2015. Furthermore, there have been signs that the automotive leather sector, which had been growing rapidly, has slowed, with reports of automotive tanners in Germany reducing production. The difficulties faced by the leather industry are well illustrated by the very significant falls in raw materials prices where, driven by increasing supply and falling demand, some selections of hides and skins now at prices close to those seen during the economic crash of 2008. In contrast, the luxury sector continues to thrive, with the Kering group reporting a 27.6% increase in revenue for the third quarter of 2018, compared to 2017, with sales of in the leather goods category rising sharply. Hermes also reported growth with a sustained increase in leather goods and saddlery.
Leather is also faced with competition from a growing range of alternative synthetic materials, such as mushroom ‘leather’, that brand themselves as an alternative to, but somehow the same as, leather, and always with better performance and environmental characteristics. The use of misleading descriptions and trade names, such as eco-leather, Flyleather and Tec-Leather, mean that the battle to maintain the integrity of the definition of leather is slowly being lost. The image of tanning with those outside of the industry is either vague or poor, with the whole industry being benchmarked against the very worst practices in places like Hazaribagh and Kanpur.
In spite of the current difficulties, the future for leather holds promise. Well-made leather is sustainable, long-lived, repairable and ultimately biodegradable. With an increasing awareness and unease among consumers of the hazards of fossil fuel-based, synthetic materials, the properties of leather are likely to become increasingly appealing. The global economic conditions, where increasing oil prices, hence increasing prices for synthetics, and falling hide and leather prices, may also mean that brands and manufacturers find their way back to leather.
For more news on the UK leather industry please visit the UKLF news section.