Fashion for Good and BCG Release New Report: Executive Guide to Scaling Next-Gen Materials Industry Leaders Are Told to Pull Both Individual and Collective Levers Throughout the Supply Chain
The foundation of the fashion industry is materials. Through their extraction, processing, and manufacture, they are responsible for approximately 30% of the cost of goods sold (COGS) and 92% of the industry’s overall emissions. The environmental effect of the sector has the potential to change thanks to next-generation materials. But a lot of brands don’t know how to drive adoption to unlock the benefits of these new materials, and they’re not ready for a material transition.
According to a recent paper titled Scaling Next-Gen Materials in Fashion: An Executive Guide, by 2030, next-gen materials may account for 8% of the global fiber market, or about 13 million tons. Even though this is a significant improvement over the current 1% of the fiber market, growing regulatory pressures, supply chain disruptions brought on by climate change, and changing consumer tastes might still cause this expansion to fall short of industry need.
Using next-generation materials strategically could result in a 4% decrease in COGS during a 5-year period, as opposed to doing nothing. This illustrates the significance of Turn to these resources for companies looking to stay ahead of the competition.
“Next-generation materials are no longer just an opportunity but a business imperative in the fashion industry at this critical juncture,” stated Katrin Ley, Managing Director of Fashion for Good. “The opportunity exists, but in order to bend the adoption curve, individual and group action across demand, cost, and capital levers is needed.”
SCALING WITH THREE LEVERS
The scaling of next-generation materials is hindered by financial, technical, and operational. This report provides a strategic plan for industry leaders to navigate these challenges, emphasizing the need for both individual brand action and industry-wide collaboration. Three primary levers are identified for scaling next-gen materials and reducing the cost of transition:
● Demand. Consistent demand signals stabilize markets; demand pooling and transition financing can overcome adoption barriers.
● Cost. Cost engineering and process optimization across the supply chain unlock economies of scale, driving affordability and adoption.
● Capital. Strategic financing aligned with each phase of the adoption curve ensures sustained growth and scaling potential.
In order to secure resources and promote accountability, successful implementation requires integrating next-generation materials into fundamental corporate objectives and linking them with financial goals. To reduce risks and take advantage of opportunities for long-term resilience, a thorough understanding of the present material mix, supply chain, and external ecosystem is necessary.
Sebastian Boger, global leader of BCG’s Fashion & Luxury division, stated that scaling next-generation materials is about more than just sustainability; it’s about remaining relevant in a market that is changing. “However, industry-wide action is essential—these materials won’t scale on their own.”
“The shift to next-generation materials presents opportunities as well as challenges for the Catharina Martinez-Pardo, a managing director and partner at BCG, stated, “fashion industry.” “The next era will be won by brands that take immediate action to incorporate these materials into their core strategy.” of style.
For more information about the report, please visit the report page.
