The Global Leather Industry

The leather industry has been a key player in the global commerce market for millennia, some even claiming that it may be the second oldest profession in the world. Today it is indisputably a major industry of huge economic importance on an international scale; in just one year alone, 23 billion square feet of leather is produced, accounting to around 45 billion dollars* (2007). However, the industry has not been unaffected since its genesis, but rather has experienced many significant and consequential changes, particularly in the last 20 to 30 years.

The Environmental Sustainability of Leather

Due to new environmental legislations being placed on all sectors of the industry in countries across the world, it saw advancements not only for environmental means but for ethical and social sustainability (particularly with regards to animal welfare) and economic (such as a commitment to fair trade) too. Strict, restrictive regulations were enforced in Industry at large and some more specifically to the leather sector to best improve its end products and in every stage that led up to their completion. The farmers, tanners and production units that were able to survive under the new conditions were those that had invested heavily in order to meet high standards and thrive. New technology and machinery was developed to the advantage of leather production and as a result, the industry and its producers found more success and integrity. 

The bedrock of the leather industry is, for the most part, based on the conversion of the food and agriculture industries’ waste into a variety of beneficial, sustainable and covetable end products. By processing and recycling waste byproducts from the meat, dairy and wool industries for leather, huge value is generated and the global economic importance is immense. 

The Value of Leather

Value all begins with the basic material; for the tanner, the raw hides and skins represent 50%-60% of the cost of producing a piece of leather, so their quality and care is priority. Tanners buy on the assurance that the raw skins and hides are suitable for manufacture in order to meet the particular purpose for the leather and their target markets. The quality of these hides and skins will eventually be reflected in the price of the final product, so it really starts with the quality in farming followed by careful handling and maintenance in each stage of the process.

The attributes that are considered when deciding on the quality and in turn price of a piece of leather include strength, flexibility, breathability, friction resistance and the potential to be water or heat resistant. These qualities usually depend on the part of the animal that the piece of hide comes from and will determine its eventual use, e.g. the posterior is the strongest part as the fibres in the hide are more tightly packed while the shoulder is thick and strong but tends to crease more easily. Many companies in the industry, in order to stay competitive and survive, choose to become specialists in a particular type of leather. Furthermore, how much of the end product is leather will determine the pricing too, with some ‘leather’ products containing some non-leather materials as is often the case in fashion garments and smaller leather goods. All these factors mentioned inform the buying and pricing of leather.

The Scale of the Leather Industry

The leather industry could not be described as anything but an international industry, with everything from the raw hides and skins, part processed leather, finished leather, leather components to the whole leather products being extensively imported and exported. Production takes places all over the world and is closely connected to the agriculture industry of each country. With around 65% of global leather production sourced from bovine (cattle), 15% from sheep, 11% from pigs and 9% from goats, areas of production depend heavily on where these animals are raised for food and wool. Most of the leather in the U.S. and Europe comes from China (the world’s leading exporter), India, Brazil, the U.S., and Argentina, all of which make up the majority of the 65% bovine share. While the addition of countries including Australia and New Zealand account for the leather sourced from sheep, and Pakistan, Sudan and Bangladesh in the case of that sourced from goats.

The world’s leading countries for leather goods manufacturing include China, India, Brazil, Vietnam and Italy; some are more important for value-adding and luxury goods and others for sheer volume. The production of leather goods in Europe specifically is in a steady decline, but the countries that export the largest share are Italy, France, Belgium and Spain. 

In an industry such as this one, the consumers inevitably have the control, with their infinite desires, needs and demands for leather. The industry must therefore meet and keep up with these ever-evolving and growing pressures through constant innovation and ingenuity - the simple uses of leather that have been around for millennia are no longer enough. Traditional leather manufacturers are also now made to compete with alternatives in the market. Despite these departures from the age-old uses of leather, the classical uses: footwear, clothing, furniture, and small leather goods remain the most popular. In fact, roughly 50% of the leather produced today is estimated to go into leather footwear, followed by furniture, clothing, leather goods, the automative industry (parts in automobiles and aircrafts) and saddlery; all time-honoured products of the global leather industry.