Technology companies that have been down the traceability path before with the seafood sector have now launched an initiative for leather.

An initiative called Better Food Future has become part of the global effort to increase transparency in the leather and beef value chain. It is setting up what it calls an interoperable traceability data framework and has launched pilot testing. It hopes this will lead to formal standards for capturing and sharing data and for implementation across the industries concerned.

A provider of blockchain-based supply chain traceability technology called Wholechain is at the core of Better Food Future. It launched the initiative in March, with the aim of bringing industry players and policy-makers together to work together on the task of collecting and sharing accurate data on what happens in the leather supply chain.

Wholechain has a track-record of achieving success in similar projects involving other parts of the food industry, namely the seafood sector. But it accepts that traceability in beef and leather is a challenge owing to “the fragmented nature of the supply chain”, involving cattle farmers, meat companies, tanners and finished product manufacturers.

Because these diverse operators have no standardised way of capturing and sharing data about the products they bring to market and materials they use in their processes, the result has been data silos. These have made it difficult for brands and consumers to verify sustainability claims, including messages about good practice in managing deforestation, carbon footprint and labour issues. A well conceived and properly set up data framework will be a means of overcoming all of this, it says. 

The senior director for beef and leather supply chains at campaign group World Wildlife Fund (WWF), Fernando Bellese, has had a role in working with Wholechain on Better Food Future. He agrees about the barriers: various operators have taken their own approaches and these now need to be better aligned. “If we are able to establish a global traceability framework for beef and leather,” he says, “we will be able to set ourselves up to meet regulatory requirements, including those of the European Union Deforestation Regulation (EUDR).”

Problem hair

Another active participant in the Better Food Future discussions is accessories group Tapestry. Its senior manager for traceability, Earl Shank, says there are unique factors in the leather supply chain that will have to be overcome if there is to be a global data standard. “Hides are a by-product,” he says. “Ranchers are not raising cattle for leather; that means the leverage that leather-focused organisations can have is limited.” At the same time, many animals move around quite a bit between their birth farm and the abattoir, making the data picture more complicated. Mr Shank also mentions the complexities of grading hides, which usually come in batches of mixed quality; even hair is a challenge because it makes immediate assessment of the quality of each hide more difficult.

“There are particular challenges in this market,” he explains, “because these are things we don’t see in other supply chains.” He says that, on the one hand, it is “exciting to see” a large number of initiatives with the word ‘traceability’ in their titles. This suggests that traceability is now perceived as “a key enabler”. But concerns remain. He explains: “We span a number of countries at Tapestry and we are dealing with different ideas of what traceability is. There are key stages in the supply chain at which we still have little information.”

Supply crisis

There is still some confusion, a little over half a year from its coming into application, over exactly what EUDR’s demands of leather supply chain players will be. In May this year, senior representatives of the leather industry in Europe held a meeting with a counterpart from the European Commission’s directorate general (DG) for the environment. The focus of the discussion was EUDR.

The president and vice-president of industry body COTANCE, Manuel Ríos and Fabrizio Nutti, met the international relations officer of DG Environment, Emanuele Pitto. COTANCE secretary general, Gustavo González-Quijano, also took part in the discussion. Afterwards, COTANCE said that Mr Ríos and Mr Nutti had made it clear to the European Commission official that, as things stand, leather manufacturers in Europe “face a supply crisis”.

They said only the livestock and meat sectors can provide the detailed information required for cattle hides to meet EUDR requirements. So far, they said, there has been no clear signal from hide suppliers about when and how the necessary information will become available. 

Earl Shank says data is already being captured, but he concedes that where this is happening it is in an inconsistent, unstructured way. He points to establishing agreed definitions of what the key events in the supply chain are and how to describe them as important steps for moving forward. From there, progress will involve having usable data for these key events, seeing how they connect and identifying where the gaps are.

Seafood starter

Better Food Future’s suggested solution will work in a similar way to the one it has already worked on for the seafood sector. Working with the seafood industry, with governments and other groups, it set up the Global Dialogue on Seafood Traceability (GDST) in 2017. By 2020, it had released its initial global data standard, which has since gone through a number of updates and continues to evolve.

Wholechain and some of its partners, including independent standards body GS1 and a specialist São Paulo-based sustainability consultancy called Rever, began work on a data framework for deforestation-free cattle in Brazil in 2022. The launch of Better Food Future builds on this and will benefit from being able to apply immediately what the data specialists learned from the earlier projects. The technology provider says pilots are already under way in Brazil and Australia, and early-adopter brands are working with it “to test real-world implementation”.

One of Wholechain’s co-founders, Jayson Berryhill, said these tests should help those behind the initiative work out how to make the data flow effectively. Abattoirs, tanneries and others may be using different systems, but this does not mean they cannot share their data with others in the supply chain. “It will be like sending email,” he explains. “If I want to send an email to a group of contacts, I don’t have to ask beforehand if they can all receive Gmail and ask them to open Gmail so that they can read the message.”

Time is short

COTANCE continues to argue that the leather industry in Europe is being unfairly impacted by regulations that have “no real connection to the [leather] sector”. As things stand, though, the list of seven commodities to which EUDR applies still includes cattle. The list of “derived products” that have to comply with the regulation still includes bovine leather. And time is running out. EUDR comes into application for larger companies at the end of 2025 and for smaller operators in mid-2026.

The industry body said after its meeting with the European Commission in May that there is already uncertainty among European leather manufacturers over securing EUDR-compliant raw materials in the volumes they need in the months ahead. It said it was grateful for the opportunity to engage with a senior person from the Commission, but insisted that if hides and leather remain among the products that come within EUDR’s scope, serious supply problems could lie ahead. How can tanneries give detailed information on batches of hides to the European Commission if their suppliers are not in possession of the data to pass to them?

Earl Shank sounds a note of optimism. What he takes from engaging with Better Food Future is that, thanks to the seafood experience, it should be possible to scale up quickly. The technology providers have spoken of being able to boil ten years’ work down to 18 months. He also likes that the initiative’s focus is “birth-forward rather than handbag-backwards”. He explains: “This is where we hope things are heading. It will help companies meet the requirements of EUDR, address animal welfare concerns and a variety of other challenges.” His view is that this will reward and promote good practice, an objective well worth pursuing.

Left to right: COTANCE president, Manuel Ríos; international relations officer at the European Commission’s DG Environment, Emanuele Pitto; COTANCE vice-president, Fabrizio Nutti; and COTANCE secretary-general, Gustavo González-Quijano. COTANCE has warned the European Commission that the imminent European Union Deforestation Regulation could cause  a supply crisis for the leather industry.
Credit: COTANCE

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