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International Market News

http://www.tdctrade.com/imn/imn190/textiles04.htm

4 July 2002

Going for green: US cotton market in an ecological revolution

America's Organic Trade Association (OTA) reports a 22% annual growth in the organic fibre industry over the last five years. Biggest winners were linens, household furnishings, and personal care products, but the clothing industry also experienced a highly respectable 11% growth rate. Moreover, OTA says that organic manufacturers anticipate an annual growth rate of 44% over the next five years, with clothing increasing by 58% in 2002/2003. While organic still only accounts for a tiny fraction of global cotton production, the sector believes that as textile companies face increasing price pressures, the drive to differentiate products and add competitive value will lead to the further "greening" of textile offers.

Turkey and the US are currently the largest producers of organic cotton, followed by India, Peru, Uganda, Egypt, Senegal and Tanzania. The OTA forecasts that production in China and Pakistan is set to increase - not surprisingly, as both countries are among the "big six" conventional cotton growers. Several brands express interest in sourcing from China, and word is that large companies which already manufacture there are introducing organic cotton programmes, as they need to source raw material close to production facilities. Some buyers say that many small farms in China are still essentially organic, but the expense of certification is prohibitive.

Two growers and processors which received certification in 2001 are Oceanic Growth Investment Limited and Hong Kong based Esquel Enterprise Limited. The argument for organic production is based on the fact that cotton accounts for about 25% of the global insecticides market by value and about 10% of the pesticides market. The Sustainable Cotton Project (SCP) observes that one pound of chemical fertilizer and pesticide is needed to produce the three pounds of cotton in a T-shirt and a pair of jeans. These chemicals severely impact health and the environment, but the cotton issue is not solely limited to apparel. Its relationship to food is increasingly under scrutiny. "78% of the US cotton crop in 2001 was genetically modified," says Lynda Grose, an independent designer and researcher, who works with clients including SCP and Patagonia and who spearheaded Esprit's Ecollection in the early '90s.

This seed goes into the food chain as cattle feed or as cottonseed oil in crackers and fast foods. America's interest in all things organic is evident in the new Organic Style magazine, launched last September, which has a circulation of 500,000. Organic Style's Susan Lietz reports that 63% of Americans buy organic foods and beverages, and households with annual incomes of US$75,000 or more make the largest number of organic purchases. That wave of ecologically minded affluence is clearly rippling out to apparel products too.

"The perception of organic fibres is slowly changing from being clothes made from 'twigs and bushes with bland colours' and 'baggy designs', as consumers see new colours, soft fabrics, and fashionable designs being introduced," says Michelle Barry, director of Qualitative Research for The Hartman Group. "Issues of availability and price become less pronounced, as consumers become more involved in organics - they are willing to go out of their way to find it and pay a little more." Nevertheless, customers don't necessarily buy because an item is environmentally sound, says Anne Gillespie, active wear buyer for Canada's Mountain Equipment Co-Op, which sourced 120,000 pounds of organic cotton in 2001, selling 73,000 garment units. "What succeeds is what looks good. But when they know it's organic, it makes them feel better.

All of the adult MEC range is 100% organic cotton," adds Gillespie. "Next year our childrenswear will be organic too." Nike began blending 3% organic cotton into T-shirts in 1998 and, in 2001, the company delivered nearly 31 million units containing organic cotton. For the 2002 Holiday season, 100% organic and 95% organic cotton with 5% Lycra products will be introduced to womenswear. Mountain Equipment Co-Op women's shirt. "We made the switch from 3% to 5.7% organic blends in the US in the middle of our Fall [Autumn] 2001 season," says Nike's Jill Zanger.

"For 2002, our estimated usage will be somewhere between 1 and 1.2 million pounds globally. We are currently at work on roll out plans for US men's and US kid's apparel products for Spring 2003 and Fall 2003." The brand will soon start to feature a hangtag to educate consumers about its organic cotton programme. Currently there is insufficient organic cotton production to meet Nike's total cotton needs, so the company is investing in partnerships to grow the market sustainably over the long term. Pricing is the other major issue. "We've had some negotiation room due to our volumes, and this has made the blended programme cost neutral at this point," says Zanger. Patagonia is another major pioneer, having switched to 100% organic cotton across all its sportswear ranges in 1996.

Cutter and Buck, Norm Thompson Outfitters and Hanna Andersson are also involved in organic lines, as well as specialist businesses such as Maggie's Organics and Smith Center. Timberland will be introducing an organic offer in Spring 2003. "Our plans include blending in T's, and introducing a 100% collection for sale through select distribution channels," says Timberland's Terry Kellogg. Farmers must observe a three-year chemical-free period on their cotton acreage before the product can be labeled "organic", so many manufacturers are blending these "transitional" yields with conventional cotton to keep costs down and guarantee future organic supply.

The Organic Consumers Association (OCA) plans to open up the market even further this Autumn, with its 'Clothes for a Change' campaign aimed at pressuring retailers to stop using non-organic cotton, start blending organic cotton into their products and stop using sweatshop labour. "Organic food is a US$9 billion industry," says Simon Harris, campaign director for OCA. "We want to bring that awareness to clothing." Independent designer Lynda Grose emphasizes that the conventional cotton industry has no long-term sustainability plan, unlike other industries, and would therefore be highly vulnerable to a widespread consumer boycott. "This year is going to represent an explosion in the use of organics. More and more companies are contacting us for sourcing information," says the OTA's Sandra Marquardt. "The outdoor retail industry is already surging ahead." The OTA's All Things Organic Conference and Trade Show in Austin, Texas in May 2002 showcased organic products and presentations from Nike, Cutter and Buck and Patagonia about the development of their organic fiber lines. from special correspondent Tania Casselle, New York

 
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