Osaka-based PEEL Lab introduces sustainable leather production

Ecological fashion enters our wardrobes

PEEL Lab wants to help save the world and make everyone look fashionable.

At first glance, the Osaka startup’s utopian vision sounds downright audacious: creating leather products from fruit peels discarded in juice factories, ultimately reducing waste, emissions and other pollution. If successful, the company expects to replace 1% of the current $100 billion global market for animal and synthetic leather by 2030.

The two-year-old green technology company is making plant-based leather with a business-to-business model in an effort to appeal to eco-conscious millennials and Gen Z consumers looking for affordable leather.

“Our environmental footprint is huge compared to the traditional leather industry, and we are looking at ways to build a green supply chain and biodegradable products,” PEEL Lab co-founder and CEO Jim Huang told TechNode Global in 2022.

Huang, who previously headed two other startups, envisions a socially conscious company that reduces its carbon footprint while preventing animal cruelty.

Greenwashing society

He’s not alone. The corporate sprint toward eco-friendly policies—partly government-mandated but mostly driven by consumer choice and social activism—has upended the fashion industry, with more designers seeking alternatives to animal leather. The trend toward creating fabrics from orange peel fibers, algae and the invasive skin of the scorpionfish, a nod to the industry’s notorious waste of resources, was highlighted earlier in May at the Met Gala in New York. This year’s dress code required guests to wear clothes for “The Garden of Time.”

PEEL Lab has plenty of competition. Vegan leather has blossomed from a niche alternative to a viable, even thriving, part of a greenwashing wave that’s embracing meat alternatives (Beyond Meat, Impossible Foods) and other verticals to combat climate change.

Using only low-impact materials from manufacturers with eco-friendly and sustainable credentials, PEEL Lab draws comparisons between its product and conventional leather. Its material comes from pineapple, recycled polyurethane (PU) leather and recycled resin, while animal leather (bovine) comes from cows and synthetic leather is polyurethane leather. Equally important, the cost of PEEL Lab Pineapple Leather products (bags and wallets, table mats, yoga mats and furniture) can be less than half the price of animal leather, PEEL claims.

Vegetable leather products are waterproof and scratch-resistant and last up to ten years without treatment. Animal leather, on the other hand, is not 100% waterproof or scratch-resistant and requires regular oiling to last up to 30 years.

But the icing on the cake is that the product is climate-friendly: PEEL products emit just 2.75 kilograms (kg) of carbon dioxide, while comparable animal leather products emit 110 kg.

The development of sustainable fashion

Socially conscious young consumers seem to be as motivated by that last statistic as they are by the product’s price and durability. The vegan leather market is expected to grow to an estimated $74.5 billion in the U.S. by 2030, according to Vantage Market Research.

The appeal of vegan leather is largely due to its smaller carbon footprint. Synthetic leather imitates animal skin (cows, pigs, snakes, sheep, horses) by using synthetic materials or plant fibers, such as pineapple leaves, cacti, cork, and apple peels, to achieve a similar texture. However, most vegan leather is made from petroleum-based plastics, such as PU and polyvinyl chloride (PVC).

The most visible gadget on the market is probably Kylie Jenner’s brand Khy, which uses vegan leather. But an eclectic group of retailers, like PEEL, are pursuing vegan options with different approaches.

Desserto (Mexico) turns nopal cacti into vegan leather rich in color and texture. Banofi Leather (India) recycles waste from banana crops. Ananas Anam (London), which uses waste from pineapple leaves, has partnered with Hugo Boss, H&M, and Bohema Clothing. Mylo Unleather (California) relies on mycelium, the root-like structures of fungi. Malai Eco (southern India) uses bacterial cellulose that grows in coconut water.

Meanwhile, high-end fashion brands like John Galliano, Prada and Christian Dior are experimenting with fish skin materials.

The trend isn’t entirely new. In 2021, Stella McCartney, Hermès, and Adidas all released products ranging from shoes to handbags made from mushroom materials.

Saving the planet

A key selling point for vegan leather products is the growing number of consumers who, in the face of climate change, are adopting a vegan lifestyle and choosing more eco-friendly options.

The environmental risks associated with leather are well-documented. According to PETA, the production system needed to raise animals for leather (and food) requires a disproportionate amount of pastureland cleared of trees, water, feed, and fossil fuels—leading to serious collateral damage. In fact, the Environmental Protection Agency warns that pollution from livestock is the biggest threat to waterways.

According to the United Nations, the apparel industry is responsible for 10% of global greenhouse gas emissions from its supply chain and production.

In particular, tannery waste is contaminated with high levels of pollutants such as salt, limescale, sulphides and acids, environmentalists point out. And tannery workers are 35% more likely to develop cancer from exposure to toxic chemicals used to treat and dye leather, such as arsenic.

For example, according to the Centers for Disease Control and Prevention, the rate of leukemia among residents of Kentucky tannery areas was five times higher than the U.S. average.

Vegetable tanning typically avoids harmful chemicals and instead uses natural materials like tree bark. There is a downside, though: This form of leather is typically more expensive and not as durable as animal leather. Vegan leather products typically have a short lifespan, just two to five years, a fraction of the decades of life that real leather can provide.

Because of that, and because of the many competitors in the vegan leather space, the path to success won’t be easy. But when asked to rank his company’s three biggest challenges, Huang was direct. “Pricing, pricing, pricing,” Huang told TechNode Global. “We want to break away from the stereotype that innovation is expensive, so we’re constantly reviewing our business model to stay competitive and relevant.”

However, he firmly believes that sustainability is “the most important component of a for-profit organization” in today’s renewable energy-driven world.

(This profile is part of our series of short reviews of late-stage startups that are part of Hypergrowth, a late-stage scaling program run in partnership with the Tokyo government)