Author / Bella Webb
Translation / Junjie Wang
Edited by / Yiling Pan
In the past two weeks, two more fashion brands, Moncler and Dolce & Gabbana, have made high-profile announcements to join the "Zero Fur" campaign. The fashion industry's emphasis on animal welfare has increased in recent years, and in addition to rare materials such as fur, the development of leather, another more common animal raw material, has also ushered in a major turning point from the technical level to the capital level.
Plant-based "vegan leather", which can replace leather, is receiving widespread attention from fashion brands and has also attracted the interest of many investment funds. When capital and brands enter the market, is this new sustainable and environmentally friendly raw material about to usher in a round of explosive growth?
Not long ago, Mycoworks, a San Francisco-based startup that has worked with Hermès, said it would expand production of its iconic product, "mushroom leather." The company has just completed a $125 million Series C funding round led by Prime Movers Lab and funded by Mirabaud Lifestyle Impact & Innovation Fund, a French fund founded by SK Networks and Chanel's fifth-generation heir, David Wertheimer.
Mycoworks will use the funds to build the first Fine Mycelium full-scale production facility in South Carolina, USA, which will help it produce a large number of core products each year, mycelium material called Reishi. The company produced 10,000 plates of Fine Mycelium material last year at a pilot facility in Emoryville, California, which is equivalent to half a sheet of animal leather.
Mycoworks, which works with Hermès, recently said it will expand the production of "mushroom leather". Image credit: Mycoworks
The new factory can make "mushroom leather" more popular, but it still needs to deal with the challenge of industry competition and consumers' low awareness of "mushroom leather".
For example, Stella McCartney, a leading sustainable fashion brand, has previously partnered exclusively with Mycoworks rival Bolt Thread, using its emerging biomaterial Mylo, which is also developed using mycelium; another biomaterials company, Ecovative, has formed a partnership with Danish affordable fashion retailer Bestseller and Tommy Hilfiger's parent company PVH. This helped its developed fabrics reach the mass market, while French luxury brand Gucci developed its own vegan leather called Demetra, which is already used in three sneakers, including the brand's Gucci New Ace released in June 2021.
Stella McCartney launches the world's first "leather coat" derived from "mushroom hyphae".
Ecovative has partnered with Bestseller and PVH.
Vegan leather Demetra has been used in Gucci New Ace. Image credit: Gucci
Mycoworks has set its sights on high-end luxury goods, with Hermès being its first partner. The first collaboration was made in 2021, with Mycoworks applying Sylvania, a leather-like material based on mushroom hyphae, to Hermès Victoria's classic handbags, after which former Hermès CEO Patrick Thomas joined Mycoworks' board of directors.
Mycoworks has applied Sylvania, a leather-like material based on mushroom hyphae, to hermès Victoria's classic handbag. Image source: Hermes
"We have a limited supply at the moment, but it is not a good opportunity." Scullin said. "We can only meet a fraction of the overall market demand and partners at our current scale."
However, Mycoworks' new plant is already under contract and is expected to be operational by 2023. Scullin also said the company has a "rough plan" to open a new facility each year to meet market demand in the U.S. and overseas.
Mycoworks' patented technology Fine Mycelium leverages the fungus's renewable root structure to generate usable materials from discarded biomass and use these materials to "replicate" the feel, durability and quality of animal leather.
Before completing its latest funding round, Mycoworks also received $62 million in funding from singer John Legend and actress Natalie Portman. The company recently used the investment to develop a new product library and streamline the customization process with new partners. At the same time, Mycoworks can further make the material thinner or thicker, and enhance its performance by embedding other materials to make the feel closer to the texture of sheepskin. Orders can be completed in a matter of weeks, which is more cost-competitive than high-quality animal leather.
Mycoworks can also further make the material thinner or thicker, and enhance its performance by embedding other materials to make the feel closer to the texture of sheepskin. Image credit: Lindsey Filowitz
"We are seeing a surge in demand for animal leather alternatives." Nina Marenzi, founder and director of the nonprofit The Sustainable Angle and one of the founders of the Future Fabrics Expo in London, said Nina Marenzi. She also noted that many new materials are now more functional and easier to utilize than animal leather.
However, these alternatives to animal leather are not completely sustainable, as a large part still relies on plastic. "The demand for high-quality vegan leather has not yet emerged." Kathryn Parker, an equity analyst at investment bank Jefferett, said. "And we think that cowhide is still recognized [by the market], because most cattle are eaten by humans compared to fur and other animal leather." Of course, the impact on profits of vegan leather instead of cowhide is difficult to determine, because the production of vegan leather is too small. ”
Many new materials are now more functional and easier to utilize than animal leather. Image credit: Mycoworks
Nina Marenzi, founder of The Sustainable Angle, further points out that the main challenge for animal leather alternatives is how to address end-of-life – especially if other materials( such as synthetics) are added to mycelial materials. "These materials are indeed an effective alternative to the heavily polluting materials in the fashion industry, but it would be a mistake to expect to produce more products instead of solving the problem of overconsumption."
Mycoworks declined to respond to how to address the end-of-life issue for partners, but a spokesperson said the company was researching the best use of Fine Mycelium technology and helping partners understand the material's lifecycle. Asked how scaling up would affect the company's overall environmental footprint, Scullin was open and honest about noting that it wouldn't be a carbon footprint friendly process because there would be carbon emissions during transportation and manufacturing.
Too low consumer perception is another developmental obstacle (of leather substitutes). According to the Boston Consulting Group, 38 percent of U.S. consumers claim not to know what animal leather alternatives are, while 37 percent say they don't know which products are and which are not.
Consumers are willing to pay a premium of up to 10% for more sustainable leather alternatives, but it depends on whether these alternatives offer the ability and scratch resistance of traditional animal leathers to cope with weather changes that traditional animal leathers do not have.
As more brands join, Scullin believes consumer perception will no longer be a conundrum. "We have many partners who want to work with us to develop products, and the biggest difficulty at present is to expand as soon as possible to meet the market demand."
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