The past few years the demand for regular cowhides has dropped dramatically, and in some places one has started to burry the hides since no one wants them. The reason is that more people want so-called vegan leather, the interest in leather shoes decline in general, and more. So far, premium skins have been spared, but the question is whether this trend will reach here as well.
For decades, the general experience among the quality shoe industry has been that it’s harder and harder to get a hold of good leather. Luxury fashion houses, car manufacturers and other strong players have stepped in and taken larger shares of the declining pie of quality skins. I have written about this development in several posts, but also on more positive aspects like new EU directives on better animal husbandry which is expected to result in better quality of skins. When it comes to the wider production of leather, not least larger cowhides and other things that do not hold the same quality as the best calf hides, we’ve seen a dramatic turn to a new reality.
From a time when demand for leather has been at record levels with high prices generally for skins around the world, it has plunged in recent years. Los Angeles Times recently wrote a well-spread article on the subject of American skins, but it has been reported similarly in the past and from other major raw-skin producers such as Pakistan and Australia.
As hopefully known, all leather is a by-product from the food industry, the main purpose is always meat and dairy production, but when the animals are slaughtered you take care of as much as possible. The by-products usually account for about 10% of the total value of the animal, and of these the skin has always been the most valuable and accounted for about half the value of the by-products. Today, in many cases it’s completely different, it’s not uncommon for the skin to be only 5% of all the by-products value, ie not even 1% of the total value of the animal. In some cases, the demand for cowhides is so low that you will not even find buyers for anything other than the hides that have a reasonable quality level, and the less good hides you simply have to get rid of, often bury them and let them molder. A real waste of resources, one could say.
So what’s the reason for this situation? It’s as always a combination of reasons, but mainly it’s due to the fact that people do not buy leather shoes to the same extent as before (a majority of the world’s leather production has always gone to the shoe industry), one dress more casually and wear sneakers in fabric or other types materials, and so-called vegan leather is becoming more popular. There is a major environmental problem in that almost all such leather is plastic of various kinds, although there are positive things in the area with versions that can be breathable and which are produced wholly or partly from biological material such as fruit peel etc. The current global trade conflicts also affect the leather industry.
As mentioned, this mainly concerns the wider leather industry, so far the supply of premium hides, not least European ones, is significantly less than demand and it’s still difficult for manufacturers of classic quality shoes to find good materials. But the question is how the development will be in the future. We already see that the automotive industry has slowed down its purchases of leather to instead invest in other materials that are increasing in demand. And if the wider leather industry is experiencing problems and decreases, it will also in different ways affect raw-skin suppliers and tanneries that make premium leather.
No one knows where it will land. Perhaps the whole industry will go into a deep crisis that is also hitting the top of the European leather industry. Or it will become easier for quality shoe manufacturers to get hold of the best skins if demand falls elsewhere. Time will tell.