Teh decline in the use of leather is a global trend, cutting across all sectors (clothing, footwear and even automotive), accompanied for several months by a slowdown in demand from the world’s largest buyer, China. A difficult situation for the sector and in particular for the leading European exporter of raw hides: France.
The underlying trend is a decline in demand. Car manufacturers, for example, are questioning the use of leather in their vehicles in favor of less expensive materials. The intention has been expressed by several producers even if it is still struggling to materialize, but this trend does not bode well for the sector.
There are also cyclical effects linked to the global economic and geopolitical situation, which make investments rarer. And then there is China, the” real subject » today, confides Marc Brunel, general director of the Alliance France Cuir, as Chinese demand is crucial in this sector as in many others.
Chinese engine broken down
French exports of raw hides and skins – untreated, untanned – to China have increased by 8% (in value) this year, but exports of finished leather to the country have collapsed by 31% while the year last year they had increased by 84%. “ China always purchases raw material to be able to process in its tanneries, both for the luxury market, at a local level, and for the medium and low-end market, at an international level. high-end finished leathers already popular in Europe have a harder time selling », explains marc Brunel.
This market slowdown is not without repercussions in exporting countries. The weakening of international demand therefore caused an average decline in tanning activity in France of 4%.
Read alsothe supply of French hides and skins is reduced
Prices falling
The market difficulties are reflected in raw hide prices, which have fallen by an average of 40% since 2018, according to the Alliance France Cuir.However, there are large price disparities depending on the type of leather, for example for calfskins, a European specialty, the market is much smaller.
For the moment, these prices do not appear to be affected by the decline in European livestock. But the supply and the market could be influenced in the coming years by a new situation: the change in eating habits. In france there is a decline in the breeding of so-called “meat” breeds in favor of dairy breeds. However, these breeds provide thinner and smaller skins, which find fewer markets in Europe.
The French herd is currently made up of 60% meat breeds and 40% dairy breeds, but the day the proportions are reversed will be an critically important change for the leather industry which is already evaluating strategies to adaptation.
Interview: The Future of Leather in a Changing Market with Marc Brunel, General Director of Alliance france Cuir
in our latest interview, we sit down with Marc Brunel, the General Director of Alliance France Cuir, to discuss the current decline in leather demand, especially in France, and the implications for the industry moving forward.
Q: Marc, we’ve seen a global decline in leather use across various sectors. What do you believe are the main drivers of this trend?
A: The decline in leather usage is influenced by several factors. Firstly, there’s a important shift in consumer preferences towards more affordable and sustainable materials. This has been most evident in the automotive industry,where manufacturers are questioning the need for leather interiors in favor of synthetic alternatives. Additionally, our reliance on the Chinese market cannot be overstated; changes there particularly impact the luxury and mid-range segments we rely on for growth.
Q: Can you elaborate on the current situation with China and how it affects French leather exports?
A: Certainly. While we’ve seen a modest increase of 8% in the value of raw hides exported to China this year, finished leather exports have dramatically collapsed by 31%.Last year, we had a remarkable 84% uptick in this area. The challenge lies in the fact that the high-end finished leathers traditionally popular in Europe now face tougher selling conditions in China. As their domestic tanneries process more raw materials, international demand for these premium products declines.
Q: What implications does the slowdown in the leather market have for France’s tanning industry?
A: The repercussions are significant. Current data indicates an average decline of around 4% in tanning activity within France.This downturn can lead to job losses and could further destabilize the supply chain. Additionally, we are seeing raw hide prices falling sharply—averaging a 40% decline since 2018—affecting the revenue of many businesses involved in this sector.
Q: With the decline in livestock breeds for meat and a shift towards dairy breeds, how do you foresee this affecting leather production in France?
A: The change in breeding patterns poses a pivotal concern for our industry.Currently, our livestock consists of 60% meat breeds and 40% dairy breeds.If this proportion were to reverse, we’d be facing a significant reduction in the quality and size of the hides available for leather production. This shift could severely limit markets for thinner and smaller skins, particularly in Europe, where demand for such products is much lower.
Q: As the industry faces these changes, what adaptations should companies consider to thrive in this evolving landscape?
A: Companies must be proactive in diversifying their offerings and exploring alternative materials for production. Investing in sustainable practices and innovations could help meet the growing consumer demand for ethical and eco-kind products. Moreover, it will be vital for us to establish better relationships with markets outside of china to reduce the heavy reliance on a single economy.
Q: What practical advice would you give to readers who are interested in the leather industry or who may be affected by these changes?
A: I urge individuals and businesses to stay informed about market trends and shifts in consumer preferences. Understanding the broader economic landscape will be crucial. For consumers, consider looking into products that prioritize sustainability and ethical sourcing. For professionals in the sector, fostering adaptability in your operations and maintaining adaptability will be essential as we navigate this uncertain future.
With the leather industry facing unprecedented challenges, insights from experts like Marc Brunel are invaluable.As consumers and businesses alike adapt, staying ahead of market trends will be critical for success.