Fashion for Good & BCG: Demand for next-gen materials could outpace supply by 2030

“Materials lie at the heart of the fashion industry. They form the foundation of every garment, shaping the design, feel and functionality of the product. They also define the brand’s narrative and its appeal to consumers,” starts a new report published today and created by global sustainability initiative Fashion for Good together with the Boston Consulting Group (BCG).

But materials go beyond aesthetics, given that they (and their treatments) are largely responsible for the fashion industry’s environmental footprint: According to “Next-Gen Materials in Fashion. An Executive Guide,” they account for 92 percent of the industry’s total emissions through their extraction, processing and production. “When it comes to the cost structure of garments, materials represent around 30 percent of cost of goods sold (COGS)—ranging from 15–25 percent in luxury to up to 60 percent in the mass market,” so the report.

Next-gen materials to transform fashion’s environmental impact

Next-generation materials, that is “novel and innovative fibres and materials with desired improved environmental and/or social outcomes when compared with conventional options” present the opportunity to transform the industry’s environmental impact. By 2030, there is a potential for nearly 13 million tons of next-gen materials to enter the market, representing around 8 percent of the total fibre market. Textile-to-textile recycling solutions are expected to drive the bulk of this growth across man-made cellulosic fibres (MMCFs), natural fibres and synthetics.

“Although a vast improvement from today’s almost 1 percent of the total fibre market, this progress will be barely sufficient to meet the industry’s broader needs. Without a strong, coordinated effort, access to these materials will remain limited to some brands, benefiting only a small fraction of the market while leaving the majority struggling to pivot,” finds the report.

Coordinated efforts needed

Given that many brands lack guidance and are either unprepared for a material transition or how to drive adoption to unlock the benefits of next-gen materials, the new report wants to provide brands with a structured framework to act on key areas and show them a pathway for addressing key challenges while driving measurable results. It is based on industry best practices and the successes of early movers like Infinited Fiber Company, Grasim Industries Limited and the Textile Exchange.

The report is divided into five chapters: While the first two look at scaling next-gen materials and seizing their advantages, chapters three and four explore what brands can do individually and collectively. “With demand for these materials projected to outstrip supply by 2030, the need for bold, coordinated industry action has never been more urgent. Without this, access to next-gen materials will remain limited and concentrated among a select few, leaving most brands struggling to adapt in a fast-evolving landscape,” cautions the concluding last chapter.

Three key areas: demand, cost, capital

The unified, strategic approach that is needed for scaling next-gen materials should focus on three critical areas: demand, cost and capital. “By bending the cost curve, the industry can unlock broader market access to next-gen materials and create a pathway to a sustainable and competitive future,” suggest the authors.

They caution to accelerate the pace of change to utilise this “unprecedented opportunity to lead”. While brands individually can drive next-gen material strategies that align with their business goals, collectively, they can pool demand, harmonise sourcing strategies and consolidate resources to mitigate risks and achieve economies of scale.

“Brands that adopt next-gen materials today will not only unlock financial benefits and drive long-term value but also position themselves as leaders in an evolving landscape,” assure the authors, concluding that “together, we can weave a legacy of innovation, sustainability and resilience to inspire generations to come”.

The complete report can be downloaded from the Fashion for Good website.