Nonprofit Material Innovation Initiative released its annual state of the industry report Tuesday — showcasing a steady $2.3 billion invested in next-gen materials since 2015.
The buzzy phrase, next-gen materials, means innovative inputs like non-animal, non-plastic alternatives to leather, fur, silk, viscose, polyester and the like. Despite only a small replacement potential being realized today, a lot of money is pouring into the space.
In 2021, $980 million was raised across 187 investors and 95 companies for next-gen materials, which is double the amount raised in 2020, at $426 million, by MII reports. Giving a “conservative” estimate, MII puts the global wholesale market for next-gen materials at approximately $2.2 billion by 2026.
The report catalogs the state of next-gen materials, outlining the innovators (at this point, familiar faces like now-public Spinnova, Pangaia, Natural Fiber Welding or Bolt Threads), investors and industry brands with a vested interest in the latest cohort of next-gen replacements. A series of case studies and consumer insights from North Mountain Consulting shape the study, alongside MII’s own evolving database.
And even despite the pandemic, financing remained unaffected.
“The fundamental ‘why’ of moving to these replacements is climate change [or that] industrial animal agriculture is not working,” Elaine Siu, chief innovation officer at Mii, said in an interview with WWD. “That is not affected by [COVID-19], because COVID[-19] almost made it even clearer that ‘this is really not working.’ We really need these replacements faster.”
Of the 95 companies analyzed, the majority (or 49 companies) use plant-derived materials as their main inputs. From there, processes rank by microbe-derived materials, blends, mycelium, recycled material and finally, cultivated animal cells.
While mycelium (mimicking a mushroom’s root-like growth) leather alternatives have been all the rage, the report identified another up-and-coming trend: microbe-derived materials. These materials utilize cellular engineering approaches such as cell culture or fermentation.
Siu made a callout to the microbe-derived kombucha cohort, including companies like Bucha Bio, ScobyTec and Kombucha Couture that employ the bacterial nanocellulose in Kombucha — a natural polymer created by bacteria strains like Gluconacetobacter xylinus. The process uses a smaller footprint to make leather and silk replacements with high-performance capabilities.
Huntington Beach-based Newlight Technology — behind “AirCarbon,” a material derived by essentially capturing carbon in the air — was another highlighted mention. The company saw its first commercialized accessories drop with its owned label Covalent, in September 2020.
While the material innovators are hard at work improving qualities like drape, malleability, tensile strength and water resistance, Siu dubbed the brands “gatekeepers,” for the increasingly competitive next-gen material landscape where a brand “spending time and resources is basically placing their bets.”
If that’s the case, then celebs like Natalie Portman and John Legend (both investors to MycoWorks), and luxury houses like Hermès have already placed bets on MycoWorks, as noted in the investor breakout chart in the report. Per MII’s findings, Adidas, Ikea and Bentley are the biggest buyers and users of next-gen materials.
MycoWorks recently held its press and client preview at its “Freedom of Creation” exhibit in New York City last week.
There, amid an exhibit complete with a tower of mycelium trays, a bio-leather craftsman studio and gallery-style swatch displays, Sophia Wang, cofounder of MycoWorks, artist and dancer, described the luxury hook.
“Well, fashion brands really appreciate our story — that we were founded by artists because they recognize we value craft and aesthetics and excellence in the materials we’re working with and bringing a creative eye in bringing out the potential in these natural materials,” MycoWorks’ Wang told WWD. “So in that sense we really share our values with luxury fashion brands.”
The material innovator is expecting to announce more partnerships this year.
As storied craftspeople and tanneries familiarize themselves with their next-gen material counterparts, tanneries also arise as a point of contention as to whether customers may use their own tanneries for finishing or employ the biotech firm’s tannery partners.
In the processes therein, the MII report called out sustainability white spaces regarding innovation needed for finishes, resins and binders which may not be all-natural.
On what identifies a good brand partner, Siu described a certain scenario: “I think it’s very difficult to put a [criteria] like you have to work together for how many years, because sometimes if it’s not a good fit — it’s not a good fit. I also think that’s not just the requirement of the materials — but also the people. You choose to work with people who have the same kind of vision you have.”
“I would say it’s brands that are almost ‘dating around’ with many different material innovators that show material commitment because it takes a lot of time and energy and resources to engage with the start-ups, or these material innovators,” Siu said.
With this investment money, scaling up material innovations is the goal as both Siu and Wang noted.
End products offer proof to success if the now-nascent industry is to grow quickly to take up 3 percent of the $70 billion leather materials market by 2026, as MII projects.