There are few tanneries left in Scandinavia. As one of those that remain, Tärnsjö Garveri in Sweden knows it must continue to offer “something unique” to claim its place in a global industry that now carries out almost all of its activity much further south.

Environmental vision

Founded in 1873, the Tärnsjö facility was run by a local family named Aström for almost 100 years. Financial pressures led the family to sell in 1971 and new owner, Nils Nyman, proved to be a visionary. He moved production away from chrome-based tanning (“there is no chrome anywhere in the tannery”, Axel Bodén says) and, ahead of his time, began to promote Tärnsjö Garveri as an environmentally sound producer of leather. Following a short period in the ownership of venture capitalists, Axel Bodén’s father renewed his interest in the leather industry by joining forces with business partner Torbjörn Lundin to take over the tannery in 1993. When his father died in 2003, the current chief executive joined the business and took over the running of it when Mr Lundin retired in 2012.

“My father never pushed me into the business,” Mr Bodén says, “but I was interested in leather because I had heard him talk so much about it. When the opportunity came, I thought I might regret it if I didn’t at least give leather a try. I was 22. I spent time in every department to try to understand how things worked and, in time, took charge of sales and marketing while Torbjörn was chief executive. For the first five years I was super naïve, but I kept learning. I wanted to understand this business.”

The original owners, the Aströms, had their ups and downs, but they built up a good business by taking hides from local cattle farmers and turning them not just into leather but into high-quality harnesses and similar products, which they sold back to the farmers. They were working with high-quality raw material and soon developed a reputation for excellent craftsmanship. The present management team is determined to maintain that reputation. It’s proud of its output, which now includes a range of exclusive bags and leathergoods, part of a move to present its products under the umbrella name ‘House of Leather’. The third floor of the tannery is now devoted to the manufacture of these products, with 15 in the range for now and a further 25 planned. Some have become available to online shoppers through the Mr Porter website (a spin-off from the Net-A-Porter site), as well as in independent boutiques in Stockholm and London. The company also produces finished goods for external customers and its range of vegetable-tanned leathers remains in demand among exclusive brands and manufacturers who make footwear, accessories and equestrian equipment of their own. Tärnsjö has even hosted a school of saddlery, the only one remaining in northern Europe, although this is about to move to a different location nearby because the tannery is expanding its production of finished items and needs the space.

Certified organic leather

The raw material, 99% of the time, is bovine hides from Sweden, with small amounts of deer and horse making up the rest. However, it’s not the special raw material or the commitment to chrome-free tanning processes that make Tärnsjö Garveri stand out, Axel Bodén feels. After all, tanners elsewhere have access to Swedish hides and livestock farmers in other northern European countries can offer hides of similar quality, and vegetable-tanning is widespread. “To survive we need to be niche,” he explains, “and it is part of our niche to use vegetable-tanning processes and to be a bit old-fashioned. But the unique thing is that we offer leather that is certified organic, made from hides that we source from farms and abattoirs that are also certified organic.”

Certification of the hides comes from KRAV, a Swedish organisation that promotes and certifies ecological, sustainable agriculture throughout the country. It is a member of International Federation of Organic Agriculture Movements and has a high level of recognition (it says 98%) among Swedish consumers, used to seeing the KRAV label on their supermarket shelves and used to being asked to pay a little more for the products that display them because the KRAV label, the organisation explains, is a clear indicator of care for the environment, for animals, for health and for social responsibility. The tanner pays more for KRAV hides, too, of course, a premium of around 15% compared to hides from non-organic sources.

Netherlands-based independent network Control Union gives third-party support for this KRAV certification under the Organic Content Standard (OCS), which applies to non-food products; accreditation under OCS means the presence and volume of organic material in the product has undergone thorough verification. The farms and abattoirs tick the right boxes for KRAV and so the tannery ticks the right OCS boxes for Control Union, which insists that it “continually monitors” compliance. Tärnsjö Garveri’s environment director, Torgny Eriksson, says his contacts with Control Union are very regular, because documentation from Control Union, such as transaction certificates, is what the tannery’s customers require to be able to prove that the leather they source from Tärnsjö is certified 100% organic. He’s had the conversation with Control Union, and says: “We are the only tannery in the world that can supply 100% certified organic leather.”

One way

In fiscal year 2015-2016 (July-June), 70% of the hides Tärnsjö Garveri processes will be KRAV hides, and from 2016-2017 onwards, the figure will be 100%. Current production levels are around 22,000 hides per year giving an output of roughly one million square-feet of finished leather but there is capacity to increase this to an annual figure of 40,000 hides, which would constitute a tenth of Sweden’s annual cattle slaughter. Around half of the Tärnsjö Garveri total comes directly from local slaughterhouses and the other half from a Stockholm-based private hide dealer who sources material from a much wider area in the centre and north of the country. Axel Bodén says the Scanhide co-operative in Denmark is currently taking 70% of all of the hides Sweden produces, but he still insists the sources he has in place can provide all the material he and his 50 employees need.

In the old-fashioned way

Sourcing certified local hides directly is already working well. Some come from specialist abattoirs that are within 50 kilometres of the tannery. One of these, Lövsta Kött, is just outside the city of Uppsala. It is small, slaughtering just 150 head of cattle per week on average (it handles sheep and pigs too), but it is an enthusiastic supporter of Tärnsjö Garveri’s ambition to use only KRAV-certified hides. The same goes for the Faringe abattoir in the village of Huddungeby, just 20 kilometres from Tärnsjö. The system in place includes steps to make traceability possible back to the farm, and even back to individual cows; if customers require this much information, it is available. KRAV’s criteria for the livestock farmers include strict rules about the space the cattle enjoy inside and out, on using antibiotics or pesticides on the cattle or fertiliser on the pastureland. One farm close to the tannery, Grellsbo Hereford, has pure-bred Hereford cattle. It’s been organic since 2001 and no longer has anything to do with supermarkets. Its cattle go for slaughter to local abattoirs and then farmers Bo Larsson and his brother Mats sell the meat directly to discerning consumers. “Consumers want to buy our meat,” Bo Larsson says, “because they can buy a product that they can’t find in a store. It’s only 20 kilometres from here to the city [Uppsala], but it strikes me that the distance is becoming greater all the time because people in the city tend to have such poor understanding of where food comes from. There is no big secret to it; we just do things in the old-fashioned way.”

Add more value

“This is not a volume market,” Axel Bodén explains. “It’s all about quality. KRAV is our niche; KRAV is what we want and we can get that raw material in Sweden. It’s growing and may already be approaching 20% of all the cattle in Sweden. This is the way for us to add more value.” He says he knows it works. Since 2014, Swedish fashion retail group H&M has been using Tärnsjö leather along with organic silk and other exclusive materials in a special capsule collection it calls Conscious (much to the delight of Control Union). “It’s small and niche, like us,” Axel Bodén says (of the Conscious collection, not of H&M), “but it will get bigger. The products sold really quickly.” H&M is among a group of new customers who found their way to Tärnsjö thanks to pioneering work by Magnus Ericson, a Swedish footwear entrepreneur who has, since 2010, been helping a famous local children’s shoe brand, Kavat, capture new customers among parents prepared to pay a premium for certified organic chrome-free leather in the shoes they buy for their children.

“Our main customers today are high-end brands in fashion, furniture, shoes, saddles (for horses and for bicycles),” Mr Bodén says, “and our first and second selections are good for them. Of course, we need to find buyers for our third selections too and we believe that here, too, our environmentally friendly strategy can help us; the third-selection material does not really stand out on its own, but the way we produce it does stand out. The key point is that story-telling and transparency are now very important for brands and we are finding that, more and more, they want to make the way they source their leather part of their stories. This is good for us. We want them to say, ‘We buy Tärnsjö’. We want them to think of us as the House of Leather.”

Demand stands up

In good times, large numbers of consumers say they want sustainable products, Mr Bodén acknowledges, even if they can appear less enthusiastic about this subject when economies go down again. “The volume market is always going to be people for whom price is everything,” the Tärnsjö chief executive says. “People always want to look after their wallets. I understand. However, there will always be customers who want to look after the planet too. It may be a smaller market, but small is the future for us. We have our traditions and we have been doing this for a long time and we want our customers to trust us and to believe in what we are producing. What we tell them is that if they put Tärnsjö leather in their products, it will help them stand out. We will never move away from being as natural as possible because we believe there will always be a market for that, with the raw material as the key.”

For him and his business, he says this means it is essential to take a long-term view, with the aim of growing a little bit year on year without taking any big risks, without having to find lots of new people (Tärnsjö is in a rural area) and without having to move production. Mr Bodén asks: “Where would we move to? If we moved production to an area with lots of leather production, we would not be unique. Now we are unique.” He is proud of the company’s commitment to being small and different and says the death of the leather industry in Europe will be when all the entrepreneurs are driven out by large groups.

How to spruce up veg tanning

Today, the tanning system that underpins Tärnsjö Garveri’s operations is TFL’s White Line System, whose technical solutions for chromium-free leathers suit the Swedish tannery’s needs well. Mimosa is in use extensively, with some quebracho and tara too. None of these plants are native to Sweden and another strand of the tannery’s sustainability strategy is to substitute them all for extracts from native spruce bark. Trials have shown this can be a successful method for tanning leather on an industrial scale. The powerful timber companies that grow the spruce use much of the bark for fuel at the moment, but Tärnsjö Garveri says there is backing from the Swedish government now to encourage them to harvest the extracts first and then use the bark as they wish. To use a tanning agent extracted from local raw material would complete the picture, the leather producer says.

In terms of machinery, Axel Bodén says he prefers technology from Italian machinery manufacturers but points out that, with relatively small production volumes, he has to manage his machinery budget carefully. “We don’t have too much money for new investment,” he explains, “but we’ve often been able to pick up machinery from other tanners. For example, we bought a new splitting machine two years ago and it was a reconditioned, second-hand machine; it still represented a big investment for us. We want good, solid, reliable machinery, but the latest inventions are sometimes too big a change for us. Roller-coaters are a good example because a more efficient way of hiding defects is not for us. We don’t want to hide them.” One change that has occurred over the last ten years or so is that wooden drums in the tannery are gradually giving way to plastic ones. Plastic, therefore, isn’t always a negative for Mr Bodén; however he does not like the push he says has come from the automotive industry to make leather look more and more like plastic. “Automotive brands don’t want any claims,” he continues, “and the consumer these days expects a smooth surface in a car interior, with no defects and no scars. Tanners have had to use tricks to make their product look more and more ‘perfect’ and as a result they, the tanners, have painted themselves into a corner in which it seems that using these tricks is the only way to make leather acceptable. We are pushing away from that. Leather is a natural product and a scar, far from being something awful, just showed that the animal the hide came from had freedom and lived a bit.”

High standards

Conditions in Sweden regarding workers’ rights, terms and conditions are widely recognised as being among the best in the world. The standard of living is high and breaks and holidays are generous; labour costs are expensive. Compared to most Swedes, who work (in front of a computer) in the knowledge economy, the workers at Tärnsjö Garveri do a tough job, according to their chief executive. But salaries are good and the relationships between the management team and the workforce and between the company and the trade unions that represent the workers are good. One of the things Mr Bodén introduced when he took over as chief executive was to give 20% of profits each year to the workers as a bonus payment. How much individuals receive depends on their salary levels and on the number of hours they have worked, but for some this has been the equivalent of an extra month’s salary, and one spin-off for the business was a notable decrease in absenteeism. “What I wanted was to raise people’s level of ambition and for them to show me they care about the product,” the chief executive says. “I’ve put a lot of thought into the question of what we need to do to be able to survive here, in a very small town in a very expensive country. This conversation with the workforce is part of it. We put the name Tärnsjö Garveri, Sweden, on everything and I want the workers to be proud of it, to tell their friends that this is where they work. I want them to hold their heads up high. So we have put videos onto the company website showing the workers carrying out their work and interviewing them. This is a bit of a cultural change because Swedes, in general, are very modest. The idea is to show people that their work counts.”

The local authorities in the municipality of Heby and, one tier up, in Uppsala County, have responded favourably to these developments. Debate continues on a number of issues, but Axel Bodén describes relationships as very good. “I think they are quite proud of us,” he says modestly; “they certainly try to help us.” He mentions that this is an area in which many of the companies that used to operate have suffered because of changes in the wider economy. He mentions, almost as an afterthought, that he was named as the municipality’s and then the county’s entrepreneur of the year in 2014, going on to take third place for the whole of Sweden as the competition escalated. “It’s exotic and strange to make leather in Sweden today. That wasn’t the case 70 years ago, but it is now.”

And yet Tärnsjö Garveri is still there, producing leather in the most environmentally friendly way it can, addressing the sustainability of its material from the start of the supply chain to the end, processing a sustainable material in a sustainable way.

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