Summary of the context and overall objectives of the project
The themes of sustainability, circular economy, respect for the environment have today assumed a centrality in the fashion and luxury sector. Since 2015, Santori Pellami SpA has been in the search for more sustainable materials, to obtain a leather product that could meet the needs of a transforming market. Nowadays the path taken has led Santori to be among the first companies to have experimented a method of tanning with the lowest level of heavy metals, and Chromium free. This was possible thanks to the uniqueness that since the company’s foundation in 1890, has led Santori to be one of the market leaders in the tanning sector: the attention to the developments of the whole society and the consequent evolution of trends and technologies in leather and high-fashion segments. Today, on the basis of the experience gained from generation to generation, Santori is specialized in the production and sale of different leather products from veal, goat, sheep, pig among other. Santori operates in national and international markets and even if it is a small size company of 8 employees, it achieves about € 20 Million annual turnover, covering the 0.4 % of the Italian market and 0.2 % in Europe.
In April 2017, after several tests, Santori developed an innovative process to obtain a 77% biodegradable leather, named Naturella®. Naturella® is a high quality leather tanned using biodegradable, organic ingredients, with low use of heavy metals (Cadmium, Cobalt, Nickel and Lead) and without Chromium. This leather has passed the standard requirements for abrasion resistance, colour fastness, grab strength, and dry and wet crocking for footwear and fashion needs. More substantial, Naturella® has passed the most important test that is the satisfaction of the early customers in the fashion industries, who have appreciated the first specimens and are increasing their demand. Technical effects of biodegradability for Naturella® have been proved on 27/09/2017 by University of Bologna. In summary, today Naturella® is an excellent product for fashion, accessories and footwear, and can guarantee the following positive effects:
- higher reduction of water consumptions than the traditional tanning process;
- waters of the production process are free from heavy metals (toxic and allergenic);
- more surface of the leather is worked, that means less wastes, less disposal costs, less pollution;
- the wastes are biodegradable;
- higher quality of the leather which is more resistant to tears and breakages;
- the leather tanned in this new way absorbs better the colours, reducing their use.
The aim of the project financed through SME Instrument Phase 1 was to study the Technical and Economic Feasibility of an innovative “short-chain” business model for Naturella® leather in the main European markets, in particular in Italy, Portugal, Spain, Bulgaria, Germany and Serbia.
As for the Technical Feasibility and Environmental Sustainability, a Life Cycle Assessment (LCA) in compliance with European PEFCR (Product Environmental Footprint Category Rules for Leather) and a Durability Analysis have been carried out.
The LCA, carried out by Polytechnic of Milan, has evidenced that Naturella® is an innovative leather product designed to accomplish the most refined customers, coupling its elevated quality with a low environmental footprint. In order to quantify this last characteristics, Santori decided to perform the evaluation of the environmental impacts of Naturella® in the common context of the European Market for Green Products with the Product Environmental Footprint (PEF) tool. In the development of the PEF for Naturella® leather, it is necessary to work in compliance with the PEFCR for leather, valid from April 25th, 2018 to December 31st, 2020.
PEF tool is a specific methodology that helps carry out a Life Cycle Assessment of products in a comparable and reproducible way. As such, this analysis requires EF-compliant datasets tendered by the European Commission and available on the different data provider nodes. However, the datasets are currently available in a form that is not fully exploitable by the general public. Notwithstanding this delay, Santori has pursued his original goal and has realised a PEF-compliant analysis for what concerns every methodological aspect.
In accordance with the PEF Category Rules, Naturella® belongs to class RP2 of the Representative Products based upon the evaluation of the European market share of different kinds of leather. In particular, class RP2 is defined as leather for upper footwear and leather goods (e.g. bags, belts, wallets, …) and this description perfectly fits with the Naturella® profile. According to the characteristics of the RP2 class, 75% of footwear and leather goods available on the market are chrome-tanned, 22% are vegetable tanned and only 3% are free-of-chrome, thus increasing the particularity of the studied product.
As for all the Product Environmental Footprint studies in compliance with the Leather PEFCR, the Declared Unit is uniquely defined as a square meter (m2) of finished leather, measured according to ISO 11646 or EN ISO 19076 standards. As a consequence of that, the reference flow is defined in the same documentation as the amount of product needed to fulfil the defined function, thus measured in kg of raw hide or skin/m2. Once it has been stated, all the inputs and outputs to the whole process and to the single unit processes shall be calculated in correlation to this reference flow. In case of unavailability of primary data on the reference flow, the PEFCR indicates default values depending both on the Representative Product and on the animal origin of the leather. Naturella® natural leather treatment can be applied to hides of whatever animal origin, but the studied case refers to bovine leather. For bovine products belonging to RP2 class, a ratio of 7.41 kg raw hides or skins/m2 of finished leather is indicated. In this case, however, company specific data relative to the Naturella production are available: 5.263 kg of pickled hides is needed to produce 1 m2 of finished leather under the assumption of products with constant area along the production process. Assuming that fresh hides at slaughterhouse have a weight double with respect to the one of the pickled leather, the reference flow is 10.526 kg raw hides or skins/m2 of finished leather.
The system boundaries for the Life Cycle Assessment are also defined in the PEF Category Rules for leather. The leather production is analysed in a cradle-to-gate scenario and, since leather is considered as an intermediate product, no downstream processes can be included in a PEF-compliant life cycle analysis: this regards B2B – Business to Business distribution, further manufacturing into finished consumer products, distribution to customers, use phase and end-of-life treatments. These prescriptions are particularly limiting for the study case of Naturella®, since the biodegradability of the leather (which represents its most peculiar and innovative characteristics) cannot be considered in its potential to reduce the environmental footprint of the product.
The PEFCR-compliant system boundaries include five specific life cycle stages for the leather production: farming, slaughtering, transport, preservation and tanning. Moreover, the leather production process is subdivided into an upstream and a core process: no downstream phases are considered. In particular, while farming, slaughtering and preservation are classified as upstream processes, the tanning phase is considered as a core element. This subdivision is functional to the realization of the LCA related to the Product Environmental Footprint since the PEFCR states that no foreground data are needed for the upstream processes except for the transportation of raw hides and skins to the tannery. Instead, for the tanning process only foreground company-specific data can be used. The system boundary terminates after the production of the studied Naturella® leather, since no downstream phases are considered.
As for the impact assessment, the PEFCR for leather lists the impact categories to be assessed and correlates to them the impact category indicator, its unit of measure and the recommended default Life Cycle Impact Assessment methods to be used to quantify them. Moreover, the most relevant impact categories and corresponding life cycle stages and processes are reported for each Representative Product. In the Naturella® case, the most relevant impact categories for RP2 class are climate change, climate change-biogenic, particulate matter, resource use – fossil and water use for both farming and slaughtering and tanning processes, while acidification and terrestrial eutrophication are related just to the farming and slaughtering phases. In the PEF study of Naturella® the full list of impact categories suggested by the PEFCR have been evaluated.
The Durability Analysis, carried out by Innovhub – Stazioni Sperimentali per l’Industria (Milan), had the objective to study and compare the effect of microorganisms and weathering aging treatments on two leather samples: Naturella® and classic calf leather tanned with the traditional Chromium and metals process.
The two leather samples, cut in stripes, have been submitted to tensile tests according to UNI EN ISO 13934‐1 before and after the exposition to the following treatments: soil burial test, artificial light fastness aging and heat aging.
The results of fungal resistance tests have evidenced that the classic calf sample is more sensible to surface fungal growth, while Naturella® only has showed growth of microorganisms different from those inoculated. It has been evidenced that the climatic chamber treatments (light and heat aging) and soil burial treatments do not influence tensile properties of both leather samples. Nevertheless, a higher microbial attack has been evidenced for sample classic calf after soil burial treatments. In summary the Durability Analysis has evidenced that the different tanning treatments for the production of the two leather samples do not result in significant different performances of the leathers after soil burial and climatic aging treatments. This is an important result, as the biodegradability characteristic of Naturella® leaves the leather similar – regarding the performances – to the traditionally tanned leather.
As for Economic Feasibility, carried out by Larix Italia, Naturella® business model has been assessed with the estimation of the financial profitability and with regards of the economic and commercial viability. In particular the focus has been made on Italy, Portugal, Spain, Bulgaria, Germany and Serbia. For each Country it has been studied the overall tanning industry, the tanning districts, with particular evidence of the sustainability key factor. Then for each target Country one or more companies for the production of Naturella® have been looked for and selected. Then the production costs have been analyzed in order to assess the profitability to adopt a short-chain business model. From these results a business plan has been carried out and it has been evidenced that it is possible and profitable to sustain a “short-chain” production model of Naturella®, so as to strengthen the enormous environmental benefits of the product.
Regarding the pricing policy, Naturella®’s sale price is currently 30% to 60% higher than traditional leather. The higher sale price of Naturella® is mainly determined by the willingness-to-pay of the customers. From one side there is a high request from the luxury and fashion brands for environmentally friendly products; on the other side, a leather with such characteristics (Chromium free, low use of heavy metals and biodegradability) does not exist at the moment. So, the uniqueness of Naturella® is a remarkable competitive advantage, that Santori is fully exploiting commercially.
A Freedom-To-Operate analysis in the selected Countries has been carried out, availing the support of a consulting firm specialized in IP management. As for Intellectual Property Right (IPR), Naturella® recipe has been filed in 2017 by Santori at a notary’s office, to protect the tanning process against the possibility that other subjects can achieve the same results, trying to prevent the company from continuing to use it. Then Santori made a sound prior art search showing that all the patents describe the use of aliphatic aldehyde in the tanning process, but not in the leather tanning phase, differently from Santori’s procedure. So, on 30 August 2018 Santori filed the national Patent application N.102018000008252 – “Improved metal-free tanning process”. In May 2019 Santori received the Search Report and Written Opinion from the UIBM (Ufficio Italiano Brevetti e Marchi which is the Italian Patent Office), in which it is said that “the matter-subject is regarded as novel”.
In the Freedom-to-operate analysis the modality through which it is possible to produce Naturella® in the other Countries outside Italy (in particular in: Spain, Portugal, Serbia and Bulgaria) has been analyzed.
Progress beyond the state of the art
This study was important for Santori in order to properly answer to the compelling needs of the fashion industry for environmental sustainability and Naturella® is a brand-new alternative business model throughout the leather tanning value chain. The targeted users of Santori’s leather products are shoe manufacturers, the accessory industry, the furniture industry, the car upholstery industry and the clothing industry.
Overall, fashion plays a major role in the global economy, with annual worldwide revenues of well over €1.14 trillion, supporting hundreds of millions of jobs around the world. Today we observe consumer trends, new technologies and innovative business models helping to lead the future of fashion towards a more sustainable runway. In particular, the shift to sustainable materials, the attention to design for longevity, the adoption of circular economy principles, the use of smart technologies in manufacturing and above all the will to drive innovation and value by integrating sustainability across the entire value chain. This also because the “Millennials” generation has become a growing consumer market in industrialized economies.
After this study the aim of Santori is to scale-up the Naturella® business model in European target countries (with the exception of Germany) and beyond, and to disseminate the technical uniqueness of the Naturella®, based on performance, sustainability and durability test results. Currently Naturella® clients are located in Italy, Europe and extra Europe and they are some big brands of luxury and fashion industry. This study has given an important contribution to Santori’s strategy to enlarge their customers base availing the production partnership with licensed tanneries in selected countries.
As for the dissemination of the project some actions have been already done and other ones are in the works. On 1st April 2019 Naturella® was showcased in “Sustainability and innovative products” course at Polytechnic of Milan, class of Fashion Design.
Furthermore, Naturella® project will be presented at “Salone della CSR e dell’Innovazione Sociale”, that will take place 1st – 2nd October 2019 at Bocconi University in Milan (www.csreinnovazionesociale.it/csr_gallery/santori-pellami-2019).