Materials lie at the heart of the fashion industry. They account for 91% of the industry’s total emissions through their extraction, processing, and production, and around 30% of cost of goods sold (COGS).
Next-generation materials present the opportunity to transform the industry’s environmental impact. However, many brands lack guidance and are unprepared for a material transition, and how to drive adoption to unlock the benefits of these new materials.
A new report, Scaling Next-Gen Materials in Fashion: An Executive Guide, reveals that next-gen materials could represent 8% of the total fibre market by 2030, equivalent to approximately 13 million tonnes.
Although a vast improvement from just 1% of the fibre market today, this growth may still fall short of industry demand due to mounting regulatory pressures, climate-related supply chain disruptions, and evolving consumer preferences.
"There are parallels to be drawn between the transition to next-generation materials and the shift to renewable energy. This change will not happen overnight, as traditional fashion materials, like conventional energy sources, are deeply embedded in global supply chains, linked to the livelihoods of many, and currently more affordable. However, with 91% of the industry's emissions attributed to these materials, both brands and consumers must drive this acceleration," says Vishakha Chopra, project leader at BCG Johannesburg.
She adds, "An initial push is necessary to overcome inertia and ensure price competitiveness, which will exponentially drive adoption. Brands that act swiftly, form partnerships with next-gen material innovators, and build sustainable supply chains will gain a significant advantage in the long run."
The strategic adoption of next-gen materials could lead to an approximate 4% reduction in COGS over five years, compared to inaction. This proves the importance of transitioning to these materials for brands aiming to maintain their competitive edge.
“The fashion industry stands at a critical juncture where next-generation materials are no longer just an opportunity but a business imperative,” said Katrin Ley, managing director at Fashion for Good.
“The opportunity is there, but requires individual and collective action across demand, cost, and capital levers to bend the adoption curve.”
Scaling with three levers
The scaling of next-generation materials is hindered by financial, technical, and operational obstacles. This report provides a strategic plan for industry leaders to navigate these challenges, emphasising the need for both individual brand action and industry-wide collaboration.
Three primary levers are identified for scaling next-gen materials and reducing the cost of transition:
- Demand: Consistent demand signals stabilize markets; demand pooling and transition financing can overcome adoption barriers.
- Cost: Cost engineering and process optimization across the supply chain unlock economies of scale, driving affordability and adoption.
- Capital: Strategic financing aligned with each phase of the adoption curve ensures sustained growth and scaling potential.
Successful implementation necessitates the integration of next-gen materials into core business strategies, aligning with financial goals to secure resources and drive accountability.
This requires a comprehensive understanding of the current material mix, supply chain, and external ecosystem to mitigate risks and capitalize on opportunities for long-term resilience.
“Scaling next-generation materials isn’t just about sustainability—it’s about staying relevant in a changing market,” said Sebastian Boger, global leader of BCG’s Fashion & Luxury sector.
“But these materials won’t scale on their own—industry-wide action is key.”
“The transition to next-generation materials is both a challenge and an opportunity for the fashion industry,” said Catharina Martinez-Pardo, a BCG managing director and partner.
“Brands that act now to embed these materials into their core strategy will win the next era of fashion.”
Download the publication here.
