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Denim’s Fixation on Price Is Stunting Sustainable Innovation, Experts Say

Scaling sustainable denim may boil down to a simple game of supply and demand.

At Kingpins Transformers in Amsterdam last week, experts from the denim supply chain hashed out the financial impact of sustainable innovations and why after years of BCI cotton, organic cotton, laser technologies and more, it still costs brands more to make and sell environmentally-friendly jeans.

The cost of sustainability garment to garment is minimal, but for mass producers making millions of garments, Miguel Sanchez, founder of Gavilan AD, said the cost to go green is nominal.

“Increasing a cent is nothing, but multiply it by three million like some brands and retailers and it becomes a lot,” Sanchez said.

However, the reason why some good innovations are still relatively expensive is because critical mass hasn’t yet been reached.

“The moment that the critical mass is increased, this cost is divided and the huge number automatically decreases,” Sanchez said. “The moment that we produce more garments, more articles using sustainable technologies and products, the cost will come down immediately. It is in the hands of demand.”

Brands show interest in sustainable alternatives, but cost is always a concern, said Tricia Carey, director of global business development for Lenzing’s denim market.

Lenzing teamed with Alvanon to examine how fiber impacts wholesale and retail costs and found that fiber represents just 3-5 percent of garments’ total retail cost. And in denim, compared to a knit, Carey reported that fiber actually costs less because there is more garment processing involved in making of a pair of jeans.

“That’s when I get really hung up when I’m working with companies and they’re just focused on the price of the fiber instead of looking at the total garment price,” Carey said. “This micromanaging of pricing at each step makes it very hard.”

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The only way to get around the issue of price, she said, is for all of the links in the supply chain to come together and “really try to build the right price that’s fair to start accelerating change.”

Kingpins Transformers founder and advocate for sustainability, Andrew Olah, urged industry-wide collaboration, too. “As long as the brands are all doing their own thing, we’re never going to have a consensus,” he said. “And as long as we don’t have a consensus, we’re never going to have anything happen.”

G-Star Raw’s “Most Sustainable Jeans” made with the first Cradle to Cradle Certified Gold denim fabric by Artistic Milliners is a recent example of how collaboration can generate change. The Dutch brand worked with Artistic Milliners, DyStar and Saitex to develop the collection.

Adriana Galijasevic, G-Star Raw’s denim and sustainability expert, said the brand kept the jeans cost neutral for consumers, though the project required investments by G-Star and its supply chain partners.

In some ways by educating the consumer about the innovation, and making it available at a price they’re already comfortable with paying, Galijasevic said that may make it easier to sell sustainable denim at a higher price down the road. “In the future, if a brand needs to increase the price, then [consumers] will understand why,” she said.

And price can’t be a reason for consumers to tune out a brand’s educational efforts. “There are so many different kinds of innovations going into the making of a pair of jeans and consumers have no idea,” said Ebru Debbag, Soorty executive director of global sales and marketing. “They don’t even have the basic idea of how their jeans are being made, let alone the innovation that’s going into it.”

Sanchez doesn’t see the tides changing in sustainability’s favor until the denim industry improves its communication with the end user—and it’s going to take some tough love.

Many consumers are already expecting the industry to manufacture responsibly. Rather than fixate on cost, Ralph Tharpe, founder of Indigo Mills Designs, said the industry needs to shift its message to focus on value.

“Price is associated with value and if we provide the right value, consumers will pay the price,” Tharpe said. “So we need to figure out ways that we can give them what they want and at the same time give them a good value. We always ask the question, what is the cost? We should stay focused on reducing the cost, eliminating processes and eliminating redundant testing. And then we can save money on costs and give more value and be sustainable all at the same time.”

“If you want to do things right, this is going to be the cost,” Tharpe said. Once this message is understood, Tharpe thinks consumers will pay more for eco-friendly denim.

But whether consumers will actually fork up the funds remains up for debate.

For Wrangler, selling sustainability depends on which consumer the brand is talking to.

“There is a subset,” Roian Atwood, VF Group director of sustainability, said. “There’s a willingness to pay for those sustainable attributes. But when you get into a room full of consumers and you talk about indigo…there’s a fundamental disconnect with their understanding of our industry, the impacts and the attributes.”

While the next innovations in denim need to meet the criteria for better water impact and better chemistry, they’ll also need to be less costly.

“That is one of the elements that is necessary from a business lens in order to reach adoption. And maybe it’s not less expensive right out of the gate, but on scale it must reach that threshold to reach the masses. There is a significant large volume of consumers out there that will never have that willingness to pay for those additional sustainable attributes. At the end of the day, everyone just wants to look good on Instagram,” Atwood said, adding that for a majority of consumers, “sustainability is not in their consideration set.”