The denim industry has not been spared from the global economic crunch, but has still managed to stay afloat with a growth index that points upwards. The industry has maintained an average annual growth rate from US $ 42 billion in 2014 to US $ 48.1 billion in 2018, and according to the Analytical Research Cognizance, the global denim jeans market is expected to touch US $ 57.6 billion by 2023.
The staple category is back in the game; Euromonitor forecasts a 5 per cent US revenue increase to US $ 17.5 billion for jeans by 2023, and an 11 per cent global increase to US $ 111.6 billion, in the same period. Today, the denim market serves as a gold mine for brands, retailers and manufacturers.
US sales of jeans saw a decline of 11 per cent in the past five years even as overall apparel sales, driven by athleisure, rose by 10 per cent; globally too, denim sales fell by 2.3 per cent, as revealed by Euromonitor. But Levi’s and Madewell announced strong sales in the Q1 of 2019, and it is only getting bigger.
Validating the same, Sharad Jaipuria, Chairman and Managing Director at Gini Denims said, “The denim industry is growing at the rate of 10 per cent and the growth is likely to be even more in the coming years. Denim is a fabric which is consumed by all age groups and all sectors and is noticing a strong pick up in Tier-2 and Tier-3 cities.”
Commenting upon the opportunity presented to manufacturers, Sharad said, “Brands today are looking for sustainable fabrics and Indian manufactures are gearing themselves to make sustainable fabrics available. This can happen by consuming less water; being more eco-friendly and by opting for raw materials that are also eco-friendly. A lot of work is happening and the brands in mills would like that in the next 10 years, the world should move towards sustainable and reprocessed materials.”
The 2018 data by Lyst shows a 30 per cent uptick in denim sales. Searches surrounding the denim category have increased by 11 per cent Y-o-Y, with shoppers looking for hundreds of different combinations of styles, colours, shapes and fits. In such a scenario, the demand for eco-friendly denim is leading the comeback strategy for a category that has witnessed dwindling sales for quite some time now.
“There’s a huge push from our side on sustainability. We firmly believe that sustainability is a growth pillar in this industry to move forward. With the new generation coming up, a lot of people are getting conscious about where their clothes are coming from, what impact do they cast on the environment and what they can do to lower that impact,” Rajesh Lakhanpal, Commercial Director (Apparel & Footwear) – India and Sri Lanka, Madura Coats Pvt. Ltd. said, adding, “Keeping in mind the same, we’ve launched a segment which is recycled. We want to eventually move to a 100 per cent recycled product so as to ensure that all our top brands are also 100 per cent recycled.”
Even traditional denim brands are now implementing more sustainable manufacturing practices and processes in order to compete with newcomers that have embedded sustainability into their DNA and market themselves as eco-friendly entities.
Levi’s, (the world’s top-selling jeans brand by retail value), aims to make 80 per cent of its products using techniques that reduce water usage by up to 96 per cent by 2020. To maximise these efforts, Levi’s gives its key suppliers individual water use targets based on local levels of water scarcity.
For example, according to the World Resources Institute, manufacturing hubs such as India and Pakistan are ranked amongst the countries most at risk of water crisis. Levi’s plans to reduce the cumulative water usage in such ‘waterstressed areas’ by 50 per cent by 2025.
Nishant Giri, Head of Exports, Jindal Worldwide Ltd., one of the largest textile majors from India, making around 200 million metres of fabric per annum, said, “We need to take care of our coming generations. Jindal’s denim plant has got a zero discharge facility where we are treating water, adding more sustainable practices, and more eco-friendly chemicals which use less water, and the treatment of such chemicals is easy. We also conserve rainwater, and are following up on rainwater harvesting as well as rigorously planting trees in our premises.”
Agreeing further on the growing relevance of sustainability, Jayanta Sanyal, General Manager at Nahar Oswal Denims (Prop. Oswal Woollen Mills Ltd.) said, “We are not only looking for procurement of fibres and yarns which are produced in sustainable ways like BCI, polyester etc., but are also thinking of sustainable ways of processing. For example, whatever colours we make are done on a denim concept which utilises 60 per cent less water than the conventional running of the machine, and in turn, also brings down the energy consumption. But even with sustainability, we have to keep the fashion attractiveness of the product intact.”
But with sustainability comes the bearing of a huge price tag.
Since the concept is relatively new, the cost of setting up new infrastructure, plants and processes, cannot be ruled out. Though the cost is slowly meeting the demand in the market, the category is still priced more than mass fashion – a cost that the industry will have to bear if it actually wants to practise what it preaches.
Rajesh further added, “The capacity for building the supply chain is in the pipeline, and is going to take a while. This is the reason costs are higher for us and therefore the price of the end product is higher. We’re not making more margins on it, if that’s your question. In fact, we’re making a little less margin but we firmly believe that this is the way to go and as volume start selling, the cost will go down and therefore the price will go down. There’s still a huge opportunity to grow and take over the market share.”
Even PVH-owned Tommy Hilfiger, sees eco-friendly initiatives as an investment rather than a cost. Earlier this year, the brand unveiled a permanent line of 100 per cent sustainable denim, which saw an ‘above average sell-out’ over the last two seasons.
“At Suryalakshmi, we stress towards understanding the customers’ need-based products. Customers today are asking for more sustainable products; sustainability is the key word. So our efforts have always been to make sustainable denim products using different eco-friendly processes, be it in terms of yarns, dyes, finishes,” Merchandisers at Suryalakshmi Cotton Mills Ltd. told Apparel Resources.
It is the right time to enter the denim market, which is poised to be the next big thing for the target consumers in question – the millennials and the Gen Z community. If brands, retailers and manufacturers can look at the cost as an asset, then long-term gains are assured.