The Future of Next-Gen Materials: 5 Key Takeaways for 2023 from the MII’s Annual Report

Investments, innovation, and collaboration are shaping the next-gen materials landscape. And despite recent global financial challenges, the industry continues to grow

The Material Innovation Initiative's (MII) 2022 Annual Report highlights the growing demand for next-gen materials, the dominance of alternative leather in the market, and the challenges faced in measuring sustainability. 

Here, we break down our five key takeaways from the report as we look towards a more sustainable future in the materials space. 

Key Insight #1: Continued investment is driving cross-industry adoption

2022 saw a dip in next-gen material investing, thanks to a global “economic downturn”. But that shouldn’t be a cause for alarm, as the MII reports figures from the last decade showing an overall upwards trend. In fact, since 2013, over $3 billion has been invested in the next-gen materials space, with $457 million of that invested during 2022’s difficult economic landscape.

Despite the economic downturn, investment in next-gen materials continues to rise

Source: Material Innovation Initiative

And it’s not just fashion brands that are seeking incumbent alternatives. Investments from the automotive and home goods industries suggest an increasing awareness of the environmental and economic benefits of switching to next-gen materials. 

Notably, our partners, Natural Fiber Welding (NFW), received investments from multiple sources, including car manufacturing giant BMW. This is welcome but not surprising news, as NFW’s low-carbon, leather alternative, MIRUM® is one of few truly plastic-free materials on the market. 

Related reading: Veshin Factory Advances Partnership with NFW to Expand Access of MIRUM®

Key Insight #2: Demand for next-gen materials is high, and supply needs to meet it

Both consumer and brand preferences are shifting rapidly towards more sustainable materials. The problem is that whilst the interest is there, supply at the commercial level is still behind.

Brands are looking for ready-to-market materials; those that “perform well, scale quickly, and are cost competitive”. But many innovators are still in the early stages; they need partners to help them scale up operations, establish supply chains, and increase their product ranges. This can leave both parties in a catch-22 situation, each waiting for the other to take the first step.

Nevertheless, the number of next-gen material innovators continues to increase. What’s needed now is early commitments from investors to scale up material production and meet the demand. And the demand is indeed there. Of all the brands MII spoke to, 90% of them are looking into developing new products made with next-gen materials.

Leading the pack in bringing next-gen materials to market is NFW. Although not mentioned in the report, NFW’s dedication to producing more sustainable, high-quality materials has recently earned them a partnership with major fashion brand and advocate for sustainability, Stella McCartney. This high-profile collaboration should lay out a clear path that others in the industry can follow. To enter the next-gen materials space with confidence, brands can mitigate any investment risks with initial shorter-term commitments, such as seasonal or capsule ranges. They’ll then be able to evaluate customer preferences, make any necessary changes, and increase production with greater confidence.

“Capsule collections…in next-gen materials are becoming the norm. Brands getting in now will have an early advantage by strategically partnering with material companies while ultimately meeting the increasing consumer demand.”
Elissa Rosen Chief Partnerships Officer, Material Innovation Initiative

Key Insight #3: Alternative leather dominates the next-gen materials market

The report states that over 60% of next-gen material innovators are working with alternative leather. This is good news because more hands on deck means more research and production. And this in turn means higher quality materials and increased availability. 

Every new product needs to go through multiple iterations, performance tweaks, and troubleshooting before it’s ready for full-scale market adoption. And that’s exactly what these innovators are doing. The more companies that can get next-gen leather right, the sooner we can replace animal and synthetic leather for good. 

Alternative leather innovators lead the next-gen materials market

Source: Material Innovation Initiative

But where does this leave other materials? Take next-gen silk for example, which is only targeted by 15% of innovators, or wool, with a mere 10%. In actual fact, the lower numbers shouldn’t be discouraging. Instead, these low-competition materials are major opportunities for innovators and investors looking to establish themselves in the industry. 

Key Insight #4: Greenhushing is on the agenda for 2023

With the new, stricter greenwashing regulations, MII expects companies to be less vocal about their sustainability efforts. Instead, 2023 will be a year of reevaluating the tools used to measure sustainability, and the language used to communicate it. This is ultimately a good thing as companies will be held accountable for their sustainability claims. But in the short term, this could lead to increased instances of greenhushing.

Greenhushing happens when a company under-communicates its sustainability efforts, for fear of making a wrong move and ultimately paying a price, either financially or with its reputation. This level of caution is understandable, but it leaves customers and other stakeholders in the dark; not ideal at a time when customer demand for more sustainable products is at an all-time high. 

This is concerning because silence on sustainability can lead to “greencrowding,” which sees businesses moving at the pace of the slowest adopter. If companies aren’t leading the way, progress could slow to a crawl.

At Veshin, we believe in progress over perfection, and that all companies should be publicising their sustainability efforts. To steer clear of inadvertent greenwashing, businesses will need to embrace radical transparency. This can be achieved with reliable life cycle assessments (LCAs), annual impact reports and clear communication with stakeholders.

“Sustainability is always a series of compromises based on priorities, and we need a lot of people doing some things better, rather than a few people doing everything perfectly.” 

Dr. Amanda Parkes, Chief Innovation Officer at Pangaia.

Read more: Veshin Factory’s Impact Report 2022

Key Insight #5: The MII will launch its Environmental Data Coalition

The report reveals that traditional sustainability measurement tools, such as the Higgs Index and LCAs, are flawed. The Higgs Index favours synthetic materials over traditional ones for their “lower” environmental impact, yet we know that synthetic materials have a devastating and long-term effect on the planet. Meanwhile, current LCAs don’t consider the release of micro and nono-plastics, which are a well-known environmental hazard. Supply chain transparency is also vital for accuracy, and LCAs and are only as reliable as the data put into them.

But, flawed as they might be, these tools did give businesses something to work with. In their absence, what can companies use to navigate the (often stormy) sustainability seas? 

In response, the MII is launching its Environmental Data Coalition (EDC). This will unite key stakeholders and facilitate discussions around environmental impact analysis in the next-gen materials sector. They’ll also release a white paper to recommend best practices, along with other sustainability guidance materials.

Not only will the initiative offer support to those in the industry, but it will also increase communication and collaboration between them. It has the potential to speed up the adoption of next-gen materials, paving the way for a more sustainable future.

Shaping tomorrow: the path towards sustainability

As the next-gen materials industry continues to expand and evolve, businesses, innovators, and investors must be adaptive and forward-thinking. Meeting the rising demand for sustainable materials will be vital. And so will ensuring accuracy and transparency in every sustainability effort. 

The Material Innovation Initiative's 2022 Annual Report underscores the importance of communication, cooperation and collaboration. And as proud partners with NFW, we understand just how powerful collaboration is in fusing fashion with a sustainable future.

 View our Veshin x NFW product catalogue here

It's time for businesses to seize the opportunities presented in the next-gen materials space and to take calculated risks in the pursuit of meaningful innovation. Instead of withdrawing, companies must embrace radical transparency and foster open dialogue. As this untrodden path unfolds, we can commit to elevating industry standards, and driving positive change for our planet. Together.

Would you like to know how we can help you switch to next-gen, animal- and plastic-free leather? Get in touch