The Rise of Organic Cotton

NADS Blogman, checking in with a post for the entrepreneurs and investors out there.

Last week we talked about how the Global Organic Textile Standard (GOTS) revamped the entire organic textile industry and allowed the market to propel to new heights. This week, we’re taking a closer look at the future economic projections of the organic textile market. While the industry is growing, it is also dealing with a lot of growing pains. If you’re an environmentally-conscious & entrepreneurial-minded individual, now may be a good time to explore what opportunities may be lying in the organic textile industry.

Let’s get one thing straight: organic textiles is a BOOMING industry that is not showing any signs of slowing down in the near future. As covered in last week’s blog, the current global market for organic cotton accounts for nearly USD 7000 Million and is expected to grow by a compound annual growth rate of 40% up through 2032. Every farm, manufacturer, logistics business, retailer, etc., must adhere to the GOTS standard for the finished product to actually carry the “GOTS organic” designation, so the introduction of GOTS has paved the way for the truly organic textile industry (no greenwashing!) to experience rapid economic growth.

Consumer Applications

As the Western world becomes increasingly more focused on products that are eco-friendly, consumer demand for organic textiles will continue to increase. Three main applications of organic textiles are responsible for the high consumer demand: apparel, packaging, and medical supplies.

Apparel is the leading segment driving the economic surge. Companies like Patagonia, Williams-Sonoma, Upusana, and Nino Bambino are some of the more prominent known organic players.

But this is more than just a fashion fad. The positive health benefits of wearing garments made from organic cotton are becoming more well-known. In fact, medical professionals continue to further the push for organic textiles, as the UV protection, antibacterial properties, and rash-free qualities of organic cotton provide an extra advantage for wearers. These qualities have also become quite appealing solutions in the cosmetics industry, for similar reasons.

In addition to this, the growth of e-commerce calls for a higher demand for sustainable packaging. Organic textiles are increasingly being looked to as a viable solution to that demand.

The Developing World

While Western markets (and Western consumers) bernefit (and will continue to benefit) from the organic textile industry, the developing world is expected to see an increase in economic growth as well. The Asia-Pacific region dominates the industry, especially India, which has long been the top global producer of cotton, but has also become the top global producer of organic cotton, producing 38% of the global supply. Increasingly, organic farms in India are producing much higher volume each year, while non-organic farms are converting to organic growth operations. The same phenomenon is witnessed to a lesser degree in neighboring Pakistan, which has likewise seen a huge increase in demand for organic cotton, leading to several new projects that are intended to build manufacturing capacity, some of which are being conducted with direct support from brands and retailers.

Which brings us to . . .

Challenges Ahead

By far, logistics is the primary challenge facing the organic textile industry–namely, the fact that the infrastructure and capabilities of the market must be expanded to accommodate consumer demand. It is a good problem to have, but a problem nonetheless. While governments are doing their part in incentivizing farmers to convert to organic, NGOs and suppliers are driving the efforts to increase capabilities so that organic cotton farms in the developing world will be able to expand production.

Another obstacle the market is facing is lack of access to non-genetically modified seeds. GOTS can create a supply chain that is transparent and traceable all the way from farm to the retailer, but if farmers are growing GMO seeds, it nullifies the ability to qualify for GOTS Certification. This is only scratching the surface of the greater issue with GMO seeds. The use of GMOs in India has been challenging: introduced in the 1970s to combat bollworm outbreaks, GMO seeds are expensive, they must be purchased annually, and they end up producing lesser yields, while remaining susceptible to outbreaks of new pests. Viable alternatives exist, but have been largely unexplored. The use of GMOs in India has made many farmers destitute and has even increased the nation’s suicide rate. Moving away from the GMO model is thus crucial not only for the market, but for the welfare of the farmer.

The Path Forward

The organic textile industry, and specifically the organic cotton market, is an area ripe for innovation, investment, and entrepreneurship. There’s clear demand, and clear obstacles to overcome in order to meet that demand, thus creating an environment that invites critical thinking, careful analysis, and technological advancement. Various organizations are already leading the way to unite the different sectors of the industry and collaborate to solve the issues that are standing in the way of market growth, and we can only expect efforts such as these to increase over time as more and more consumers gain awareness of the health and environmental benefits of organic fibers.

If you’re thinking about getting into organic cotton, making a dent in the industry, creating solutions to the crises, or simply investing in organizations that do, there’s never been a better time than right now.

Just some food (organic of course) for thought! NADS Blogman, out.