Time is flying, and it is hard to believe that the first month of the year has already passed. In Europe, Christmas and New Year celebrations are long forgotten, while China, and much of the rest of Asia, is preparing for the Lunar New Year festivities (February 17). According to reports from the region, this will involve a break of at least two weeks, during which people take time off and spend time with their families. The order situation along the leather value chain does not currently require shortened holidays or additional shifts. Exceptions may always prove the rule, but in general this assessment holds true.

In Europe, conditions remain significantly more challenging than in the rest of the world, as we have maintained over recent months. Europe is suffering from extremely high production costs and a shortage of adequate labour. Leather product manufacturers continue to pursue the relocation of production, further distancing themselves from EU tanneries.

The luxury goods industry is facing a decline in sales and is therefore no longer able to serve to the same extent as before as a stabilising pillar of a fully integrated EU production chain. The European automotive industry is undergoing a fundamental crisis, and in addition to lower vehicle production and sales, several premium brands continue to attempt to replace leather with alternative materials.

In Asia, mass leather production is characterised by fierce price competition, further intensified by weak consumer demand and the same under-utilised capacities. The relocation of production sites because of geopolitical developments, combined with the unresolved issue of US trade policy, is leading to unclear and insecure supply chains.

For decades, leather demand was initially driven by the growing share of leather in the furniture industry and by the steady expansion of leather usage in the automotive sector. This compensated for a decline that had begun in the use of leather in the footwear industry.

The Asian real estate crisis, a general post-covid slowdown in consumption within the furniture sector, the increasing shift towards cheaper and easier-to-process materials, and, more recently, US trade policy have significantly burdened leather demand in furniture.

In the automotive sector, the true underlying reasons remain unclear. However, cost considerations and the complexity of leather processing likely encouraged the industry to move away from leather, supported by campaigns against animal-based materials. These decisions continue to have a significant impact.

In the global footwear sector, we may already be at a more advanced stage of development, with leather beginning to show early signs of a successful renaissance. In the luxury goods sector, the radiance of big-name brands is fading. While brand recognition remains strong and exclusivity may still resonate for certain iconic products, it is becoming increasingly difficult to justify high price-premiums for products of only average quality. This is particularly evident in Asian markets, where questions of quality and value for money are now far more prominent than they were only a few years ago, when brand ownership primarily served as a symbol of achieved prosperity.

Not long ago, particularly among some affluent middle-class groups in the West, natural animal-based materials, especially leather, had come to be considered socially unacceptable. Consumers embraced questionable alternative materials, while industries in Europe and the US invested heavily in the development of non-animal substitutes. These efforts were largely unsuccessful, leaving recycled plastics as the main alternative. None of these substitutes, however, have been able to match the properties of leather. Wool was the first material to overcome these challenges, experiencing a remarkable renaissance in recent years.

Is this now the final countdown for leather? No, because there is little doubt that the trend opposing the use of animal-based materials has slowed and may already have stopped. Economic pressures and material choices by consumer goods manufacturers do not yet fully reflect this shift. However, anyone observing major cities will recognise that consumers appear to be ahead of manufacturers. Genuine leather jackets, gloves, and everyday shoes are once again being worn in many places where trends originate. These styles are often being reintroduced under the label of “vintage”.

The year 2026 will determine whether this is merely a brief revival or the beginning of a broader mass-market trend. Media coverage, including streaming services, reinforces the hope that fashion may be the source of this renewed impulse.

Authentic leather jackets in 1980s and 1990s styles are increasingly visible, without even needing to reference Nvidia’s CEO, Jensen Huang. Even in vegan bars and restaurants, leather jackets and leather sneakers are reappearing. When discreetly asked about the material, consumers often justify their choice by referring to durability and sustainability.

An industrial automotive leather manufacturer in Europe is unlikely to benefit significantly from increased demand for leather jackets or footwear. There are currently no signs that the automotive industry is prepared to reconsider its stance on leather in the near future. Although existing structures remain in place, time for decisive action is limited.

In other sectors as well, growth prospects may sound simpler than they actually are. Increases in leather demand will likely be achievable only in specific segments and at specific price points. Attempting to generate volume through destructive price competition, as currently seen among mass producers, is unlikely to offer a sustainable solution. There will always be a competitor willing to offer even lower prices. The core challenge lies in clearly differentiating leather from synthetic alternatives, thereby addressing the recurring question of why consumers should choose the original. The path forward must therefore lead away from price competition and towards emphasis on the material’s quality.

Returning to leather apparel and our hypothesis of an emerging trend, plastic imitations have dominated women’s fashion for years. The aim was to achieve a so-called ‘leather look’ at low prices using inferior materials, which worked at first.

Yet the renewed success of genuine leather among trendsetters suggests that consumers are once again drawn to the original. A similar development might already be observed in footwear.

The statement that we will never be able to supply eight billion consumers worldwide with leather products remains true. However, catering to a portion of that market is sufficient. If the fragile flower of trend-driven fashion can be nurtured and allowed to grow, the overall outlook for leather is not unfavourable.

From our perspective, it is essential that the industry and manufacturers adopt a more honest approach to the product itself. The opportunity to present leather’s properties, functions, durability and naturalness has rarely been better. The sheer number of consumers without ideological objections to leather is already substantial. Leather appeals to the senses, meets functional expectations, and often leaves its users genuinely satisfied. Should sentiment truly shift and manufacturers communicate the material’s strengths with conviction and engagement, there is little reason for concern about the future of leather, even if not all regional and sectoral challenges are resolved.

Numerous changes do not necessarily imply the disappearance of the product. Even though less raw material has been used in recent years and market balance remains disrupted, opportunities and perspectives still exist. It will likely once again be the courage of smaller, committed companies that drives change, while large incumbents appear to have lost much of their capacity for renewal.

A clear strategy for leather would be to move away from industrial, standardised materials and products and being honest about what leather really is and why it is used. This should emphasise that its properties and function are better than those of any alternative. The industry should emphasise the uniqueness of each individual piece. Every piece, no matter how small, has its own story. There should also be a move away from discussions within the industry’s own bubble and a greater focus on building up brand and consumer awareness.

In the coming weeks, Asia will enter its New Year holidays, while attention in Europe will turn to the Lineapelle trade fair in Milan (February 11-13). The exhibition will coincide with the Winter Olympics, which may deter some visitors from travelling to Italy, particularly given high hotel prices. However, this may ultimately enhance the quality of attendance, as those for whom the fair is essential will not be discouraged. In such a scenario, the saying “less is more” may well apply, allowing key decision-makers to spend more time engaging with exhibitors on critical issues. It would not surprise us if the Milan fair ultimately makes a positive impression.

Share this story: