What are tanneries for? In owning and running a tannery many skills are developed over the years. Working with collagen, the technology of the non-woven material that we call suede splits, surface coating, complex waste management related to liquids, solids and gaseous emissions along with a wide variety of more specialist technologies that might depend on locality, market sector, staff skills or history.
Should we employ those skills exclusively for making leather or should tanners consider using them elsewhere? One business tool used by companies considering their future development is called Ansoff’s Matrix. This is not a new tool but one that goes back to 1965 when first suggested by Igor Ansoff.
There are two questions which are attached to this both of which are pertinent to the leather industry today. These are how can we defend our market share and how can we grow our market? Answering this mostly focuses on the existing market where market development is the easiest and least risky route. It is about doing more of the same. If you have never gone in search of more customers, or have never measured what percentage you have of your existing customers’ purchase this is where you start. It is classed as Market Penetration.
Making more of the same product for what is essentially the same market area is also the least risky strategy that a company can adopt, but anyone looking around the buyers of leather from Nike to Nissan will know that to survive and prosper they have had to move not only into new geographies but also different segments.
So if you are doing as well as you think you can in your sector, or if it is shrinking for some reason that is beyond your control, then you have three choices. The simplest two routes, in terms of risk, is either to sell your existing product into a new market (Market Development) or to sell new products into your existing markets (Product Development).
Selling leather into a new market has historically been found to be quite difficult, although attitudes are evolving. We have a long history of tanneries specialising and finding it hard to manage small skins and bovines hides I the same plant, or to jump from upholstery leather to footwear. Historically the move away from vegetable tanning to chrome tanning, which roughly coincided with a move from equine and industrial leathers to footwear and more modern upholstery was a period when many tanneries shut and whole tanning districts closed. Thus while the term Market Development might sound simple both the market and the product characteristics require a great deal of work in the leather industry.
The most risky route is to do something completely new (Diversification). In the USA Fortune Brands decided to sell all its tobacco interests, out of which its history had been developed and push into the golf interest. It successfully combined the small brands of Titleist (golf balls and clubs) with FootJoy (footwear and gloves) into one business under the name Acushnet which did well for 25 years and now continues as an independent business on the NY Stock Exchange. Also one could say that VF Corp, so famous for its ownership of Timberland, North Face, Vans, Icebreaker and many others, has been expert at this having adapted many times since it started as a glove and mitten factory in 1899. It expanded into silk lingerie in 1914 and changed its name to Vanity Fair Silk Mills Inc. in 1919. In 1951, Vanity Fair Mills went public. It then started to acquire other brands and slowly evolve into the current position where it builds groups of brands in various sectors, in which it attempts to retain the brand essence and consumers profile, while massively reorganising the “back office” for maximum efficiency. Today their Outdoor and Action Sports sector is over half of the business.
Perfecting alternative materials for the leather market.
These changes were achieved by companies with relatively deep pockets and well managed. It is harder for a tannery, usually and SME with low margins, to make such moves. So this brings us back to Product Development - selling new products into existing markets. Such a discussion is likely to raise the thought of using the tanner’s technical skills to perfect alternative materials for the leather market. It has been shown for a couple of decades that taking non-woven materials and putting them in retaining vessels where the action is better than in some of the textile industry pressure pots to dye and finish creates a better material. Some of the better non-wovens of the 1990s and 2000s are Asian substrates that benefitted from working in Italy with Italian tanning equipment and technology. No industry has better knowledge of the processing and adjustment needed with non-woven material for multiple end uses than the leather industry.
Equally Zoa, the Modern Meadow test tube collagen built from smashing yeasts, does actually require processing in the tannery to make it saleable. Is this something tanners should not do, because it competes with leather.
My argument today is that we should embrace these materials and not be afraid to use our tannery skills with these products. Our issue is not with competition but with false or deliberately misleading nomenclature. If we are involved in the processing and the marketing then we will have a greater say in this area to ensure that leather gets properly recognised.
I would hope that the industry will put more effort into getting a precise definition for leather agreed across the globe within the industry and issue a clear instruction to all tanners that they should not get involved in any promotion that can mislead consumers about what they are buying.