Global Market Report on Sustainable Textiles: Executive Summary

2010

EXECUTIVE SUMMARY
Introduction

Global Market Report on Sustainable Textiles ExEcutivE Summary

2010

As a result of its change in name and focus, Textile Exchange for the first time is providing an overview of both the organic cotton and sustainable fibers markets. We address each sector separately below.

Key Findings
Global Organic Cotton Market Climbs Despite the recession, during which the majority of brands remained staunchly committed to their sustainability strategies and programs, global retail sales of organic cotton apparel, home, and personal care products increased 20 percent to just over $5.16 billion from 2009-2010, an increase from $4.3 billion in 2009 (the figure actually exceeded TEs 2010 projection of $5.1 billion for 2010). The rate was comparable to the 15 percent growth rate in organic fiber production, with the bulk of the market growth centered on companies in the United States and Europe. The Top Ten Users of Organic Cotton According to the results of Textile Exchange surveys and interviews, the Top Ten organic cotton-using brands and retailers globally in 2010 were (in order by rank): H&M (Sweden), C&A (Belgium), Nike, Inc. (Oregon, USA), Zara (Inditex) (Spain), adidas (Germany), Greensource (Washington, USA), Anvil Knitwear (New York, USA),Target (Minnesota, USA), Disney Consumer Products, (California, USA), and the Otto Group (Germany).

2005
1. Nike, Inc. 2. Coop Switzerland 3. Patagonia 4. Otto Group 5. Walmart/Sams Club

2006
1. Walmart/Sams Club 2. Nike, Inc. 3. Coop Switzerland 4. Patagonia 5. Otto Group

2007
1. Walmart/Sams Club 2. Nike, Inc. 3. Coop Switzerland 4. C&A 5. Woolsworths South Africa

2008
1. Walmart/Sams Club 2. C&A 3. Nike, Inc. 4. H&M 5. Zara 6. Anvil Knitwear 7. Coop Switzerland 8. Pottery Barn 9. Greensource 10. hess natur

2009
1. C&A 2. Nike, Inc. 3. Walmart/Sams Club
4. Williams-Sonoma, Inc.

2010
1. H&M 2. C&A 3. Nike, Inc. 4. Inditex (Zara) 5. adidas 6. Greensource 7. Anvil Knitwear 8. Target 9. Disney Consumer Products 10. Otto Group

5. H&M 6. Anvil Knitwear 7. Coop Switzerland 8. Greensource 9. Levi Strauss & Co. 10. Target 11. adidas 12. Nordstrom

Certain companies had exceptional programs that resulted in a major reshuffling of the rankings from previous years. For example, H&Ms ambitious program launched past former front-runner C&A (which itself had an outstanding year) to take the lead and adidas leaped past competitors to go from 11th to 5th place. Greensource and Target both increased two positions, Zara stepped up from 2008 and Disney Consumer Products ranked for the first time with robust sales of Anvils private label Ts to several in the Top Ten, the only reason for it to decrease. (Walmart did not submit data.) Overviews of each of the companies organic cotton programs are included in the full report. Several brands increased their volumes by 125 percent or more, knocking several loyal users of organic cotton out of the Top Ten, including Nordstrom and Williams-Sonoma.

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Possible Market and Fiber Production Scenarios - Organic Cotton If organic cotton market growth continues at the current rate of 20 percent per year, a conservative rate, retail sales of organic cotton products will likely grow to an estimated $6.2 billion in 2011 and $7.4 billion in 2012. Chart 1 Global Retail Sales of Organic Cotton Products 2006-2012

Global markEt rEport on SuStainablE tExtilES ExEcutivE Summary

Global Retail Sales of Organic Global Retail Sales of Organic Cotton Products Cotton Market
8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 0 06 07 08 09 10 11 12 Global Retail Sales of Organic Cotton Products

If there is an increase in levels of commitment from brands and retailers to farming projects, as has been seen with C&A and Anvil, among others, and annual growth rates return to the 34 percent seen in 2008, retail sales of organic cotton products could grow to an estimated $6.9 billion in 2011 and $9.3 billion in 2012. The economic recession, in large part, led to declining product sales across the board. This has led to a subsequent dip in organic fiber production, leaving little if no excess inventory. TE urgently recommends that brands and retailers contract with producer groups and textile mills to ensure the right type and amount of fiber is available. For the 2011/12 harvest, TE expects some improvement, but the lack of communication between the market, producer groups, and mills remains a significant barrier to sustainable growth. More details are provided in Textile Exchanges first Mid-Year Farm and Fiber Predictions Report, available free of charge on the TE Farm Hub at www.farmhub.textileexchange.org. Note that fiber production is projected to return to 2009/10 levels in the 2011/12 season and continue increasing. Chart 2 Global Organic Cotton Fiber Production 2005/06 2011/12

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What About the Other 95 Percent?

Global Market Report on Sustainable Textiles ExEcutivE Summary

2010

Despite the recession, in which the majority of brands remained staunchly committed to their sustainability strategies and programs, the most significant factor in the organic cotton market has been the increase in brand interest in cotton from Better Cotton Initiative (BCI) and other initiatives. TE believes in the need to focus on improving conventional agricultural practices, and organizations such as BCI are doing a tremendous job at identifying and communicating different methodologies for mitigating environmental and social issues at the cotton farm gate level and collecting metrics on potential solution paths. Many brands are thrilled at discovering ways of improving whats commonly referred to as the other 95 percent, but Textile Exchange firmly believes that organic cotton sets the bar. However, both methods are needed to change cotton production for the better.

Key Findings - Sustainable Textiles

Sustainable Textiles Market Looks Bright 2010 was the first year that TE requested data regarding industry use of sustainable fibers including recycled and cellulosic fibers. While some would argue whether any textile production can be sustainable, TE has chosen to use a basic definition as a process that both minimizes the negative impacts of the textile industry while maximizing its positive effects, acting in favor of the future instead of at its detriment. Given that 2010 was the first year TE requested data from its members and the textile industry, the figures we received were nowhere near as robust as those for organic cotton but will still create a baseline for future research and projections. Why Focus on Sustainable Textiles? Consider the Facts: Textile waste occupies nearly five percent of all landfill space. One million tons of textiles will end up in landfills every year. 20 percent of industrial fresh water pollution comes from textile treatment and dyeing. In 2009, the world used three trillion gallons of fresh water to produce 60 billion kilograms of fabric. It takes 700 gallons of fresh water to make one cotton T-shirt. One trillion kilowatt hours are used every year by the global textile industry, which equates to 10 percent of global carbon impact.

Two fibers, recycled polyester and TENCEL (lyocell) were the two leading fibers in terms of quantity reported by responding companies. Recycled Fibers It should be no surprise that recycled polyester represented the lions share of recycled textiles in the apparel and textile industries. Sports apparel, uniforms, and home furnishings as well as lifestyle products were the leading users of the fiber among respondents. Those companies able to provide forecasts for 2011 and 2012 anticipate steady growth of recycled polyester products and most indicate a high level of interest in other recycled fibers such as nylon and cotton. Cellulosics TENCEL (lyocell) is the most widely used cellulosic material in the environmentally preferred category. Most brands that reported annual usage and forecasts for use of the fiber also indicated steady growth over the next two years.

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Conclusions and Recommendations

Global markEt rEport on SuStainablE tExtilES ExEcutivE Summary

Neither recessions nor unstable economies seem to have put a damper on the fast-growing organic and sustainable textiles industry whether looking at the past few years or into the future. The focus on producing textiles in a more sustainable manner continues to increase, mostly as a result of ingenuity and commitment on the part of caring innovators around the world and in every textile sector and the thirst for all things green on the part of even cash-strapped consumers. To bring commitment and functionality together, Textile Exchange believes the factors outlined below are key for the continued growth of both the organic and sustainable textiles markets. For more descriptive recommendations, see the full report. Manufacturers, Brands, and Retailers Organic fiber supplies are tight, reinforcing the need for forward planning and contracting. Forward planning as an integral part of any sourcing strategy not only ensures that the right fiber types are grown in the right regions, but that global production increases at a pace equal to market growth. Beyond current fiber inventories, developing and committing to a long-term expansion of any organic fiber program that includes fair pricing is imperative to ongoing fiber availability, price stability, and a positive impact on rural communities. A strong commitment to organic cotton, coupled with increased use of more sustainable cotton as a stepping stone to ultimate overall conversion to an organic method of farming, will support cross-pollination of best practices and agricultural innovation. Measurement tools such as eco-indices are evolving and being adopted rapidly. This underscores the need for integrity and transparency from the farm or polymer manufacturer to the retail shelf and beyond. Transparency and integrity need to go hand-in-hand with growth and demand to ensure the markets credibility and retain consumer trust. Existing chain of custody standards include the OE 100 and OE Blended standards for organic cotton content, the Global Recycled Standard (GRS) for recycled materials, and the upcoming Content Claim Standard (CCS) to verify raw material claims. If you are making an organic garment or product claim, utilize processing standards such as the Global Organic Textile Standard (GOTS) to ensure the final garment is as organic as possible. Collaboration between companies and across industries is critical to creating scalable solutions to existing and emerging issues like mulesing, the harvesting of goose and duck feathers, or the detection of chemical residues in product. Non-profit organizations play an increasingly important role as conveners, subject matter experts, and neutral third parties. There are no longer any excuses for not identifying and reducing your companys and your supply chains footprints. There are numerous initiatives underway, such as the Eco Index, Restricted Substance Lists, Global Water Quality Guidelines, Clean by Design, and Pollution Prevention, and organizations to guide you on the path and all are publicly available. Network, Learn, and Get Involved. Industry is rapidly realizing that collaboration is the fastest way to affect positive change. Textile Exchange and others have created safe spaces in which to learn, share best practices, and identify issues. TE has provided over 500 different training sessions to brands, retailers, manufacturers, and producers in a variety of formats including in-house sessions, global and regional conferences, technical seminars, webinars, and workshops while also offering on-line fact sheets, calculators, and other tools to share our collective knowledge and experiences. Connect your sustainability strategy to your marketing and messaging and approach your delivery of sustainability as work in progress. There will always be something more you can do, and there is no finish line!

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Fiber Producers

Global Market Report on Sustainable Textiles ExEcutivE Summary

2010

Farmer groups dedicated to producing cotton organically (or more sustainably) can benefit from increased visibility of their environmental and socio-economic objectives and achievements. Textile Exchange, for example, is committed to raising awareness of the benefits of organic agriculture and creating tools to improve farmer visibility (such as our online Find a Producer and our new Trading Post). Farm group leaders or coordinators of farm projects should hone their business plans, assess market risk carefully, and plan production accordingly, asking for commitments from buyers (and preferably enter into purchase agreements). Work with other farmers, as well as brands, retailers, and other key stakeholders to share research, best practices, and tools that support responsible fiber production. Sustainable businesses need to be knowledge-intensive, not resource-intensive.

Sustainability is a journey that is constantly changing as new materials and production methodologies evolve. Join with us. Together we can make a difference.

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