A new report out today by Sustainabelle Advisory Services, backed by Kering and the Laudes Foundation, offers an in-depth look at the current and future landscape of material innovations in the fashion industry.
The report, titled "Next Gen to This Gen: Scaling Material Innovations in the Fashion Sector," leverages insights from 62 expert interviews and feedback from 157 stakeholders to provide a thorough overview of the sector’s challenges and advancements.
"Next Gen" material innovations are defined as renewable materials and processes that are not yet scaled but have the potential to transform the fashion industry. These innovations aim to reduce dependence on finite resources such as petroleum, land, and water while minimizing risks to human health, human rights, and animal welfare. Additionally, they promote more circular production methods, fostering a sustainable and ethical approach to fashion manufacturing.
Despite significant investments, some of these material innovators have encountered major obstacles. Bolt Threads, a pioneer in biomaterials, ceased production of its Mylo mycelium material in June 2023, despite raising over $380 million over 15 years. Renewcell, a leader in cellulosic recycling, faced a 70% stock price decline in October 2023 and declared bankruptcy in February 2024, marking a significant setback for Next Gen materials.
However, there have been notable advancements signaling forward momentum. Infinited Fiber Company secured over $40 million in financing in March 2024 from strategic investors like H&M and Fast Retailing. H&M also launched Syre, a new recycled synthetics venture, in collaboration with engineering firm Vargas and backed by a $600 million offtake agreement. Renewcell, now rebranded as Circulose under Swedish investment firm Altor, marks a positive turnaround. Additionally, 2023 saw several significant product launches, including LanzaTech's collaboration with Adidas, Levi Strauss & Co.'s partnership with Nature Coatings, and Karl Lagerfeld's introduction of NFW’s 100% plastic-free MIRUM material.
Powerful drivers such as regulation and ambitious impact targets are pushing the fashion sector towards the adoption of Next Gen materials. Insights from other climate tech sectors, like solar and electric vehicles, suggest a similar growth trajectory for the fashion industry. Technologies needed for this transformation are already available, with hundreds of innovators providing proven solutions. Stakeholders are actively investing, recognizing that Next Gen materials are essential for achieving both impact and business objectives.
The adoption of Next Gen material innovations faces several well-documented challenges, including high costs, performance issues, and implementation difficulties. There is also perceived resistance to changing the status quo. Brands often struggle to meet performance specifications and aesthetic standards, while material innovators report difficulties in securing long-term contracts and convincing brands to accept higher price points. Investors and suppliers cite the high costs of new materials as a significant barrier, and supporters of sustainable fashion highlight the challenge of justifying the premium costs associated with innovative materials.
To overcome these obstacles, stakeholders suggest several concrete actions. These include considering the product life cycle costs rather than focusing solely on procurement costs and using internal carbon taxes to incentivize better decisions. Decoupling the premium from procurement and incorporating it into the net zero or marketing budget are also recommended strategies. By addressing these challenges with targeted solutions, the fashion industry can make significant strides towards integrating Next Gen materials into mainstream production.
The necessary technologies for advancing Next Gen material innovations are available and rapidly growing. According to Fashion for Good, there are over 650 innovations in materials and recycling, a significant increase from 130 in 2017. The survey shows that 70% of brands have sustainability teams focused on innovative materials, and 63% have dedicated R&D teams with the resources to support these innovations, demonstrating the industry's readiness to adopt sustainable practices and technologies.
The report identifies three critical "unlocks" to accelerate the adoption of Next Gen materials: relationships, incentives, and policy. Strong relationships within brands and supplier partners are essential, as success hinges on the commitment of these champions. Redefining key performance indicators (KPIs) for middle and senior management and aligning business models with appropriate incentives can address the challenge of high costs. Communicating industry needs to policymakers through group statements, campaigns, and trade associations is also crucial.
The following priority areas are highlighted to create a scalable pathway for Next Gen material innovations, requiring minimal time or financial investments:
Information Creation and Standardization: Developing open-source resources such as codes of practice, specifications libraries, and template agreements through industry cooperation and transparency.
Optimizing Research & Development: Accelerating the innovation process through partnerships with suppliers and shared resources, leveraging supplier knowledge and facilities, and fostering triangulated relationships for shorter R&D timelines and faster economies of scale.
Addressing Funding Challenges: Focusing on catalytic funding options from both public and private resources, lobbying for government support, developing pre-collaborative R&D funding from brands, and creating incentives through prizes and competitions.
As sustainability-linked legislation comes into effect globally and consumers increasingly seek sustainable products, Next Gen materials will be critical for brands to meet their environmental goals. With an estimated 80% of a product's environmental impact determined at the design phase, integrating innovative materials and dyes will be key to achieving sustainability targets.
Sustainabelle's report offers comprehensive insights and detailed recommendations in its 150+ page findings, aiming to guide the fashion industry towards sustainable innovation and broader adoption of Next Gen materials.
