For the last two years, Ganni’s founders have been trying to solve a tricky puzzle: the Danish cool-girl brand had committed to slashing its environmental impact, and leather was standing in its way.

The material accounted for the bulk of the company’s associated emissions, according to the brand’s analysis. But leather goods was also a rapidly growing category that accounted for about 20 percent of sales last year.

Alternatives were expensive, experimental and often a let-down in terms of quality and durability.

“In the beginning, we were really frustrated,” said Ganni’s creative director Ditte Reffstrup. But the company’s climate ambitions, shifting attitudes towards materials like fur and improvements in leather alternatives convinced the brand to act. “It kind of made me a little bit embarrassed, you know, that we hadn’t started this [earlier],” Reffstrup said.

The company went public with its commitment to go virgin leather-free in October, setting a two-year deadline to find alternatives.

The decision plays into growing consumer appetite for products that are environmentally and socially responsible, particularly at Ganni’s contemporary price point. Industrial cattle farming and leather tanning are big polluters and a growing pool of shoppers are seeking out alternatives. Searches for “vegan leather” nearly tripled between 2020 and 2021, according to online fashion marketplace Lyst. Meanwhile, brands like Stella McCartney and Nanushka have proven it’s possible to build a consumer base and command a luxury price point by appealing to consumers who want animal-free products.

But while many big fashion players have denounced the use of animal products like fur and exotic skins in recent years, leather is far more deeply entrenched in the industry’s product offering. Advocates for the leather industry argue that replacements are often filled with plastics and point to regenerative and ethical farming as a means to address the material’s negative environmental impact. And though industry leaders like Gucci and Hermès are experimenting with innovative leather alternatives, leather goods — from keychains to handbags — remain a huge revenue driver for luxury brands and a crucial entry point for aspiring customers.

Ganni’s decision to largely eliminate leather (it will still use recycled leather, ideally from post-consumer waste, as a “last resort”) is a risk and an opportunity.

To succeed, the brand will need to develop better alternatives and convert customers to new materials. But the move is also likely to help it remain ahead of the competition with its base of young, engaged and social-media savvy customers.

“I think they will be onto a winner,” said Ida Petersson, buying director at London-based luxury retailer Browns. “And I think it would be really important to lead that debate.”

Testing the Market

In late October, Ganni released a campaign for a line of black, burgundy and pastel-hued sandals and loafers made with Vegea, a leather-like material predominantly made from grape waste left over from wine production.

The shoes, which go on sale next year, are the brand’s first step towards its leather-free future.

It’s a little bit like chicken-and-egg... For [new materials] to scale and grow and get investment, they need brands... to work with them.

More products are set to drop in the coming year, including two wallets and a bag made with Mylo, another imitation leather grown from mycelium, the root structure of mushrooms. Securing a contract to use Mylo is a coup for a relatively small brand like Ganni; up until recently, the fabric was only available to a handful of exclusive partners including Stella McCartney, Kering, Adidas and Lululemon.

None of those brands has released products made from the material to consumers yet, making Ganni one of the first in the world to test the market.

“I’m not worried about alienating any [customers],” said founder Nicolaj Reffstrup. “But I’m super worried about being able to deliver the same kind of blockbuster products that we’ve been doing hitherto — it’s a huge concern.”

No Easy Fixes

Realising the company’s ambitions remains a challenge. Ganni’s new line of Vegea shoes took 18 months to develop as the design team cycled through samples and stress-tested the material’s durability. Other leather-like innovations are much further behind, and even securing swatches can take anywhere between six weeks and six months, said Lauren Bartley, Ganni’s head of sustainability.

Meanwhile, some options just don’t meet the brand’s standards for look and feel. One cactus-based leather “almost looked like plastic,” Ditte Reffstrup said. That’s in contrast to real leather, where “the right product, it will just look rich instantly,” she added.

Internally, Ganni employees commonly refer to the tension between balancing strong design and commercial appeal with sustainability goals as “the beautiful struggle.”

Even when the aesthetics and quality requirements are met, plant-based materials don’t provide perfect solutions to the environmental challenges Ganni is trying to solve. Products like Vegea and Mylo typically also contain plastics that are needed to ensure performance, texture and durability are up to scratch.

Bartley said she is hopeful about recent progress in the space, which has seen companies like Vegea reduce the synthetic content in their materials while remaining transparent about their shortcomings. Meanwhile Mylo’s creator, Bolt threads, has a roadmap for improving the material’s sustainability profile, CEO Dan Widmaier said.

Part of the challenge is waiting for innovation to catch up with the brand’s ambition. New fabrics saw record investment last year, but even frontrunners in the space are still only beginning to bridge the gap between proof-of-concept and commercial-scale production.

“It’s a little bit like chicken-and-egg,” said Bartley. “For [new materials] to scale and grow and get investment, they need brands...to work with them. So, you’re having to place bets and take risks sometimes on a partner that you really feel has potential.”

The Business Case

Ganni’s bid to go leather-free hasn’t come cheap. The leather alternatives it’s experimenting with come at a premium to traditional materials and have required a time investment to discover and develop into products.

“No matter how you twist and turn it, this is going be an added cost for us,” said Nicolaj Reffstrup. “You need to anchor this with your shareholders because otherwise, you’re not going to make real change.”

So far, Ganni has funded its pivot to plant-based leather alternatives from money set aside through an internal carbon tax. And it’s in a position to subsidise any pressure on margins thanks to healthy international growth and supportive backers, CEO Andrea Baldo said.

Ganni’s investors include LVMH-backed L Catterton, which acquired a 51 percent stake for an undisclosed sum in 2017. The company is profitable and reported revenue of €76 million ($90 million) in 2020 — growth of 1.3 percent amid a period of industry-wide contraction. This year, the company said it expects to see annual growth of 35 to 50 percent.

But the company must still tread the line between balancing innovation with commercial viability.

“We are not a research and development company. We are a fashion company,” Baldo said.