Plant-based leather gains traction, but costs rise due to limited infra

Allen Solly, a brand under the Aditya Birla Fashion and Retail umbrella, has introduced a range of products made from materials like apple peels and cactus leaves in India. This move comes after growing demand for sustainable and cruelty-free fashion, a trend that’s seen significant growth in recent years.

However, local brands in India have been a step ahead and have already established various products using vegan leather.

The global vegan leather market size is projected to reach $204 million by 2030, growing at a CAGR (compound annual growth rate) of 11.4 per cent from 2023, according to a report by IndustryARC, a market research consulting firm. This growth is mirrored in India, where over 1,000 brands now carry the “PETA-pproved Vegan (PAV)” certification, as per PETA India.

Vegan leather is an eco-friendly replacement for animal leather. As per PETA (People for the Ethical Treatment of Animals), it is often made from polyurethane (PU), a polymer, or from materials such as pineapple leaves (Piñatex), cork, apple peels, other fruit waste, and recycled plastic. Then the vegan leather is used to create products.

SOURCING CHALLENGES AND COMPLICATED SUPPLY CHAIN

“The cost of sourcing alternative materials like apple leather, cactus leather, and recycled fabrics is generally higher than traditional materials (animal leather),” Richa Pai, chief operating officer of Allen Solly told Business Standard in an email response.

These materials require more complex manufacturing processes and specialised farming or recycling methods. Since these alternatives are relatively new, the economies of scale have not yet fully developed, leading to higher production costs.

However, as demand and production scale increase, costs are expected to decrease over time, she added.

Ethik, a Bangalore-based brand specialising in premium vegan products for men, which also featured in the first season of Shark Tank India, faced initial challenges in sourcing PU materials locally. “During our early years, importing PU was challenging because there were very few quality suppliers in India,” said Pankaj Khabiya, founder of Ethik.

Similarly, Aulive, known for its plant-based leather bags and accessories, relies on both international and domestic sources.

“We source Piñatex from outside India and banana and coconut-based materials domestically,” said Aulive founder Wamika Shekhawat.

India’s supply chain for vegan leather is still in its growing stage. “I’m keen on using locally available materials because it’s financially sensible and avoids import duties,” Shekhawat said.
 

The labour-intensive processes involved in producing vegan leather also contribute to higher final product costs. Local brands have to factor in the labour-intensive work while deciding on the final costs.
 

FOReT, a brand with premium vegan leather accessories for men and women, works directly with rural women in South India for the banana bark process.
 

“The manufacturing processes for these alternatives are more complex and require advanced technology, driving up costs,” said Pai. Limited infrastructure for recycling and processing plant-based materials in India further restricts the availability of sustainable options. However, rising demand for eco-friendly fashion suggests potential growth in this area, she added.
 

LACK OF GOVERNMENT INCENTIVES
 

Fashion industry experts believe that the absence of government incentives for local manufacturers is another factor driving up the cost of vegan leather products. In 2022, PETA India urged the Ministry of Commerce and Industry to support pro-vegan collaborations with local farmers and entrepreneurs.
 

Business Standard did not receive any response to an email sent to Piyush Goyal, the minister of commerce and industry, regarding this matter.
 

SYNTHETIC VERSUS PLANT-BASED LEATHER
 

Earlier in July 2024, Tata International, the global trading and distribution arm of the Tata Group, said in a press release that it aims to boost sustainable leather production to 50 per cent in four years, using patented technology that reduces waste and pollution.
 

“Despite lower demand post-Covid, we are now witnessing promising recovery with increased interest from key markets such as the US, China, and Europe,” said P Rajasekaran, business head of finished leather business at Tata International, in a statement.

 

Since synthetic leather is easily available and the demand for it is quite high, they are available at an easier margin. Vegan (plant-based) leathers are mostly niche products and a lot of them like pineapple leather are patented. As a result, only one company is working on it and they may have a monopoly on pricing, said Shekhawat.
 

HEALTH CONCERNS WITH PRODUCTION OF ANIMAL LEATHER
 

Animal leather production is resource-intensive, requiring significant land, water, and feed. The tanning process also involves harmful chemicals. As per PETA India, the leather industry’s waste is classified as carcinogenic by the International Agency for Research on Cancer. Workers in tanneries are at greater risk of developing various cancers due to exposure to toxic substances. In contrast, plant-based leather production uses agricultural waste like banana stems, pineapple leaves, mushrooms (Mylo), apples, and cactus.
 

“India has a significant cost advantage for expanding the vegan food and plant-based leather industry due to its abundant agricultural resources, low labour costs, and ongoing technological advancements,” said Ashima Kukreja, chief corporate liaison at PETA India. Supportive government incentives for sustainable and eco-friendly industries would also help, she added.
 

POST-COVID BOOST
 

Fashion industry experts think that Covid-19 played a huge role in advancing the popularity of vegan leather products in India.

Covid has made people rethink their lifestyle choices, leading to a shift towards healthier, more sustainable options, said Khabiya. This shift extends beyond diet to include lifestyle products like apparel and accessories, with consumers increasingly opting for organic cotton, bamboo fabrics, and vegan leather, he added.