The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — In 2010, archaeologists digging in a cave complex in Armenia discovered what they believed to be the world's oldest surviving example of leather footwear. Dating back to approximately 3500 BC, the simple cowhide shoe was made long before Stonehenge or the Great Pyramids of Giza. But it's safe to say that humans have worn clothing made from animal skins for hundreds of thousands of years.
Today, the global leather goods business is worth over $100 billion a year and produces everything from car seats to luxury handbags. But the process of creating leather is still dependent on animal skins. Leather is unique for its strength and stretch, not to mention its aesthetic appeal and links to powerful cultural archetypes from cowboys and aviators to bikers and rockers. And yet raising and slaughtering the billions of animals whose skins feed the leather supply chain each year is inefficient, cruel and comes with huge environmental impact.
It doesn’t need to be this way. A venture-backed biotech start-up called Modern Meadow has managed to “biofabricate” leather without animals. As it turns out, the essential biological component of leather is not animal skin, but a fibrous structural protein called collagen. The traditional process of making leather essentially amounts to removing everything from animal skin that isn’t collagen. In the early days, Modern Meadow grew skin cells to create leather, but the company has since refined its approach and now uses a fermentation process to brew collagen directly. Indeed, its scientists have bio-engineered a strain of yeast that, when fed sugar, produces collagen, which is then purified, assembled and tanned to create a material that is biologically — and perceptibly — almost indistinguishable from animal leather.
A close up of Modern Meadow’s biofabricated leather | Source: Courtesy
Modern Meadow has attracted the interest of luxury goods and sportswear players and the start-up says it will soon announce two still-secret collaborations. But Modern Meadow wasn’t always focused on the fashion and luxury sector. The company began life in 2011 with the aim of biofabricating hamburgers as well as handbags, but soon realized these were two vastly different markets and, in 2013, pivoted away from food, which came with higher technological, regulatory and cultural hurdles.
"At the beginning, the idea of Modern Meadow was animal products without the animal," explains Andras Forgacs, the company's co-founder and chief executive, sitting in a sparse office in a nondescript low-rise building on a campus in Nutley, New Jersey, about a 35-minute Uber ride from Manhattan. Modern Meadow has just moved here from the Brooklyn Army Terminal, enticed by a combination of more space, tax incentives and a facility already outfitted with the infrastructure required for biosciences by its previous occupant, the pharmaceutical giant Roche.
Forgacs’ interest in biology goes back a long way. In high school, he was a self-described “science nerd” whose mother was a paediatrician and whose father was a physicist. Forgacs did pre-med and international relations at Harvard and jokes that he “fell in with the wrong crowd and ended up on Wall Street.” After earning his MBA, he joined McKinsey, but never lost sight of his passion for science.
“My father had been integrating physics and biology and had filed some patents on bio-printing,” Forgacs recalls. This research and a flair for entrepreneurship led him to team up with his father, along with Keith Murphy and Eric David, to launch Organovo, a biotech start-up that fabricated human tissue and organs for the testing of new pharmaceutical products with the long-term goal of growing fully-fledged replacement organs. The company, which is now publicly-traded, also made skin models used for cosmetics testing by the likes of L’Oréal, which triggered a question for Forgacs: “If you could make skin, could you not make leather?”
At the time, a revolution was transforming biotechnology, enabling scientists to synthesise new organisms faster and at lower cost. Back in 1965, Intel co-founder Gordon Moore had famously observed that microchips were becoming exponentially smaller, faster and cheaper. What became known as Moore’s Law essentially underwrote the software revolution, unleashing an explosion of digital innovation that gave birth to transformative consumer products like the iPhone. Four decades later, the Carlson Curves — named after Rob Carlson, managing director of Bioeconomy Capital and the author of “Biology is Technology: The Promise, Peril and New Business of Engineering Life” — have outlined a similar trajectory for the building blocks of biotech. “I have published different versions of these curves over the years and I tend to focus on how quickly the cost of reading and writing of DNA is decreasing,” says Carlson. “If we continue at the current pace, in principle in ten years it will be possible to write genetic code from scratch in quantities large enough to write entire synthetic genomes.”
“Biology has undergone a huge revolution,” explains Forgacs. “Digital has been coming to biology. It’s gone from being this artisanal industry, where we were slicing from one organism to another, to being able to put things together like Lego blocks — being able to not just read DNA, but edit and write DNA in larger and larger chunks.” Costs have also fallen dramatically. “The toolkit around synthetic biology and biofabrication is becoming so much more powerful, and so much more accessible and affordable, which allows us to tackle consumer challenges beyond medicine.”
Andras Forgacs, co-founder of Modern Meadow, with a colleague | Source: Courtesy
To date, Modern Meadow has raised $53.5 million in funding, including a $40 million Series B round, in June 2016, led by Horizons Ventures and Iconiq Capital. The company has also attracted a further $33.9 million in grants and tax credits. But it’s a relatively small sum when compared to the amounts invested in new pharmaceutical products. “Like the mainframe era in computing, where your customers were like the Department of Defense or NASA, biotech was previously in the ‘big pharma’ era. It takes $1.5 billion dollars to develop a new drug, but consumer companies, for the most part, can’t pay $1.5 billion dollars to develop a new technology — or wait 15 years,” explains Forgacs. “The fact that we can now read and write DNA faster and cheaper is giving rise to a whole new set of applications.”
Leather offered a huge addressable market that was ripe for disruption. “I was getting phone calls from large buyers of leather and they would tell me about all the problems they were having with the supply chain, with the fallibility of the material, with waste, with volatility, with prices,” recalls Forgacs. Indeed, traditional leather supply chains can be long and difficult to manage. The irregular shape of animal hides, coupled with scars and insect bites, can mean 20 to 30 percent of animal skins regularly go to waste. Unpredictable weather can also lead to price volatility. “With biofabrication, you’re dealing with reliable quality material in a reliable shape and size — and that is beneficial for business,” says Forgacs. Modern Meadow’s technology also allows customers to bring processes like dyeing and finishing into the formation of the material, unlocking additional efficiencies.
But while Modern Meadow plans to bring a finished good to market within two years and might one day compete with traditional leather suppliers on cost, its product — still in the research and development phase — is currently far more expensive to create than traditional leather. “I don’t think we’ll ever look to compete with the commodity end of the spectrum. This is not about price competition,” explains Forgacs. “I think our materials in the near-term will be competitive at the luxury end of the market.”
“Luxury brands are really important because they tend to be the ones most focused on quality and creating things that are truly differentiated in terms of design and performance and bringing novelty and enduring value to consumers,” he continues. “Plus, the margins are high, so they can underwrite innovation. And they have a mindset for innovation.”
To this end, Modern Meadow has recruited luxury veterans Anna Bakst, Mimma Viglezio and François Kress as advisors. So far, the reception from the sector has been positive. “We’ve been approached by everybody,” says Forgacs. Though the company is tight-lipped about its partners, it says at least one major luxury player has committed significant resources to research and development. “It’s not like we’re vendors and they’re just buying the material. We’re innovation partners with these brands. We have a joint development agreement and they actually resource development.”
The fact that we can now read and write DNA faster and cheaper is giving rise to a whole new set of applications.
When compared to traditional leather production — which contributes to climate change, land devastation, pollution and water contamination — biofabrication is far better for the environment, something that is increasingly important to luxury brands. "Look at what Kering is doing, look at what LVMH is doing. They are really making a point of saying the environment matters. These companies will welcome working with people who support their values," says Bakst, who stepped down as group president of accessories and footwear at Michael Kors in January after 13 years at the company.
"These brands know the value of PR," adds Viglezio, who previously worked in communications at what was then known as Gucci Group. "There is immediate benefit in publicity from doing something good and being first. In a world that is going down the drain, people will ask, 'So why am I buying Prada instead of Gucci when it looks exactly the same and is the same price?' Because one is better for the world."
Critically, luxury brands are also looking for new platforms for product innovation. With fewer virgin markets left to tap, existing consumers who often already own classic items are increasingly driving luxury demand, putting pressure on brands to deliver greater novelty. "Established consumers expect novelty and innovation if they are to part with their money. This holds true at a wide range of price points, certainly for megabrands like Louis Vuitton and Gucci, but also at the high end, as the issues at Bottega Veneta and Chanel illustrate," explains Luca Solca, head of luxury goods at BNP Exane Paribas. "For all luxury brands the challenge is to innovate."
“There’s an incredible appetite for innovation, just to be able to do something that brings something delightful to the consumer in terms of new functionality, design or performance,” agrees Forgacs, who says Modern Meadow opens up radical new creative possibilities for luxury brands.
Suzanne Lee, chief creative officer of Modern Meadow | Source: Courtesy
In 2014, Forgacs hired Suzanne Lee — a graduate of London’s Central Saint Martins with over 15 years of experience at the intersection of fashion and technology — to be Modern Meadow’s chief creative officer, an unusual position for a biotech company. “As a designer, the most exciting part is the creativity that this technology enables,” says Lee. “It enables you to create things in completely new ways. Textures, weights, strength, elasticity, breathability — all of these are now tunable knobs of creativity that we didn’t have to this extent before. Whether linked to performance or aesthetic, they are incredibly exciting because they open up more bandwidth for design.”
Lee says she understands fashion’s trend-driven mindset and has been careful to seek partnerships with luxury players who think long-term. “We’re looking for people with a deep and genuine desire to bring something new to the world — not this season, because the true innovation and development timeline of this technology is measured in years, not weeks.”
That’s not to say that spinning up new materials on a seasonal basis is impossible. “There’s a lot of foundational technology that goes into this,” explains Forgacs. “New design variations or performance variations are a function of time and resource. If you want something fundamentally new, that’s going to take more time. But there are some changes to design and performance that will be lower hanging fruit.”
"A lot of the design innovation won't just be inherent in the material, but what designers can do with the material," adds Bakst. "For example, if it's lighter now, how can you drape it? Or once upon a time, skins could only be so big, so you had to piece things together; now, you don't have to piece things together. I think designers are going to get inspiration initially from things like weight and size that are going to give them whole new ways to work."
In luxury, signature materials that are unique to a brand are also highly valuable. "Having worked in accessories for so many years, it's important to remember that some of these brands have some classic leathers that are worth not changing," says Bakst. "I would say to designers: 'Let's come up with something new that we can really own.'"
We will wind up with materials from Gucci and Hermès, where the brands are literally incorporated into the genomes of the cells that make the materials.
Rob Carlson sees it similarly: “It is hard to say where this is going to go, but you could easily imagine bespoke fabrics and materials that are grown for fashion houses and that are only available from those sources. I expect that we will wind up with further product differentiation with materials from Gucci and Hermès, where the brands are literally incorporated into the genomes of the cells that make the materials.”
At Modern Meadow, Lee has assembled a small team of unicorns with a rare combination of experience in both fashion design and bioscience. They have been conducting experiments to explore the creative potential that biofabrication unlocks. “Our end customer is someone that’s buying a shoe or a bag or a jacket, so you need people in-house who really understand the needs of the market. What do these materials need to look and feel like? What is going to be exciting to other designers? We need to really understand what the technology can do in terms of creative potential.”
Because Modern Meadow brews collagen in liquid form, the resulting leather can be applied in a range of unusual ways. On the wall of the design studio at the Nutley office are swatches that have been spray-painted with liquid leather. On a large work table is a graphic t-shirt made of various kinds of white fabric — from basic cotton to mesh — that have been bonded together with black leather. "The t-shirt demonstrates that instead of stitching stuff together, we can use liquid leather. It's about playing with perceptions and challenging people to think: 'I didn't know leather could do that, or be that, or feel like that, or perform like that.'"
Modern Meadow’s t-shirt prototype appearing at The Museum of Modern Art | Source: Courtesy
The t-shirt is a prototype that’s set to appear alongside 110 classic style pieces — from Nike’s Air Force 1 sneakers to a black leather biker jacket — in The Museum of Modern Art’s upcoming “Items: Is Fashion Modern?” exhibition, which opens on October 1st. The decision to participate in the show is part of Modern Meadow’s drive to boost awareness of its materials platform and educate the design community about its creative potential.
"Very importantly, the t-shirt being shown at MoMA is not a product that is going to be sold. It's about showcasing a new way working with materials," explains Forgacs. "The t-shirt offered us a blank canvas. This doesn't mean we're dropping in retail with t-shirts. We're categorically not doing that."
While Modern Meadow plans to make the vast majority of its revenues by supplying other businesses, it has also developed its own consumer-facing brand for its materials: Zoa. "From the outset, the intention was to create a branded materials company," explains Lee. "Zoa is going to show up next to other brands in a way that is recognisable to the end customer. We want to start seeding something so people can ask for this by name."
"Zoa means life, it derives from the Greek term zoi. Protozoa, Hydrozoa, Metazoa. Zoo. Zoologist," says Forgacs. "It's also this idea that this is not just life, but it's a little creature that is going to evolve."
Forgacs and Lee both resist the comparison to Gore Tex. "What we didn't want to do was ingredient branding like Gore Tex," says Lee. "For us, Gore Tex was very old fashioned: it represents one material and it's solving one problem. We see this as a wider revolution in how we create things. You're going to see a whole spectrum of materials and products."
There's the benefit to the consumer, there's benefit to the manufacturer, no animals were harmed and you get to keep your planet!
“The design space is vast,” adds Forgacs. “It’s not just one material. It’s generationally improving many, many types of materials. I like to use the metaphor of a tree. We’re focused on the trunk right now — and we’re running off these branches that are the applications of our materials: luxury, sports, what have you. Over time, the tree will have a lush canopy.”
Alongside the MoMA exhibition, Modern Meadow is staging a pop-up on Crosby Street in the SoHo neighbourhood of New York that is also aimed at engaging, educating and eliciting feedback from the design community. “We want to have conversations with designers. What’s exciting? What are the features that you’d love to see in materials that are leather-like but could go somewhere else? What would you make from this?” says Lee.
So far, there are no plans to develop products sold solely under the Zoa brand. “There are many ways that we could continue to evolve as a company, but our main focus is going to be B2B2C,” says Forgacs. “We do want to have lines of communication to consumers and the creative community. But our real focus is going to be working with world-class brands that can leverage biofabrication to enhance their products.”
“There’s the benefit to the consumer, there’s benefit to the manufacturer — oh and, by the way, no animals were harmed and you get to keep your planet!”
Andras Forgacs, co-founder and chief executive of Modern Meadow, will speak at VOICES, BoF’s annual gathering for big thinkers, which will take place from November 29 to December 1, 2017 in Oxfordshire in partnership with QIC GRE.