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SustainabilityistheNewPremiumJeans:AnAnalysisoftheDenimSupplyChainandHowThatRelatesto

CustomerDemandBothPresentandExpected

TylerMichaelColeManageratOlahInc.

HistoryofPremiumDenim

AveragepriceofPremiumJean$200USD

PremiumDenimreacheditspeakin2005/06byofferingPremiumproductatmultiplepricepoints.

96%ofU.S.Consumersown7pairsofDenimJeans

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PremiumDenim&ManufacturingOrigin

JeansweremanufacturedusingJapanese&ItalianfabricatfirstandthenTurkish.

DenimJeansrepresentsanestimated$60Billionglobalmarketforretailers

k ll PremiumMarket$2Billion

PremiumJeanswerepredominatelyManufacturedinCalifornia

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MarketingInfluenceonPremiumIndustry

HeavyMarketingofGarmentManufacturing&Fabricoriginresultedinanewmeaningofhighendjeansmarket

GlobalRecessionsimpactonPremiumDenim

2008FinancialCollapse&RecessionwasdemiseofTopTierDenimMarket

RapidchangesintheeconomyforcedDenimCompaniestoreconsiderproductofferingwhichultimatelymeantdevelopingbasedoncostofgoodsandservices.

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CurrentIndustrySentiment

Massconsumptionindicatesthatpriceisthemajorcomponentinthecustomersdecisionmakingprocess.Whatoncedrovepremiumsaleshasnowbeenremovedbycost.

TheDenimindustryisimprovingassuppliersofferdifferentiatedproducts: Performance Price DiversityofProduct

Millennialsarechangingthelandscapeanddemandingavalidstoryoftransparencyintheprocurementofdenim

Millennialsareforcingcompaniestopromotethecomponentsofthemanufacturingprocessthatsupporthealthenvironmentalpractices

WhoaretheMillennials?

Generationofindividualsbornbetween19802000 FastestGrowingGenerationinBusinessSector

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Youth&EnvironmentalInfluence

GenerationYarenotnecessarilyenvironmentalisty

TheDemographicofMillennialconsumers(2011PewSurvey)aremoresupportiveofstricterenvironmentallaws.

Millennialsattributeglobalwarmingtohumanactivity,andmorelikelytofavorenvironmentalpoliciessuchasgreenenergydevelopmentandgovernmentaltaxincentivizedprograms.

Millennialemploymentcurrentvs.future

Asof2016Millennialsmakeup1/3oftheglobalworkforce

By2020thissamegenerationwillrepresentoftheglobalworkforce

SurveyaftersurveyshowsthatMillennialswanttoworkforcompaniesthatplaceapremiumonemployeewelfare,offerflexibleschedulingand,aboveall,bestowasenseofpurpose

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MillennialConsumers

AverageIncomeperCollegeGraduate $34,500(Loweststartingpaysince1998)1998)

AverageDebtPostCollegeGraduation $30,000

Millennialsareatechsavvydemographicwhichiscreatingnewsellingchallengesformanytraditionalbrickandmortardenimcompanies.

ofMillennialsdoonlineresearchbeforebuyingproduct.

MillennialBuyingHabits&Demands

BuyOnline

SocialMedialInfluence

OnlineCustomerInteraction&Reviews

KickStarterBrands I.e.Gustin

ShopInStore,ShipToHome

R l M k ResaleMarket

VirtualFittingRoom

Necessityforfit

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Howdoesthetextileindustryimpactthegloballandscape?

GlobalCottonSources G Di ib i

GlobalFashionIndustry $1.2TrillionUnitedStatesFashionIndustry $250Billion

GlobalCottonSources UnitedStates India Brazil Pakistan China

Spinning,Weaving,Dyeing Vietnam China Pakistan USA India

GarmentDistribution UnitedStates Europe(Spain,France,London) Asia(Japan,China)

SalesAvenues Wholesale ECommerce Retail

GarmentManufacturingChinaMexicoHaitiEgyptTurkey

Bangladesh

LCA&ManufacturingProcess

Cotton Fabric GarmentProduction Production Manufacturing

TransportationDistributionConsumption

ConsumerMaintenance

PostConsumption EndofLifeCycle

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DenimManufacturingToday

Dyeing,Finishing,Extrusion,Spinning,Weaving TextileProduction

HarshChemicalsUsedinTheManufacturing Process

SecondQualityinManufacturing

HighestEnvironmentalImpactinManufacturing

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CottonanditsimpactonWaterandEnergyUse

Consumermaintenanceanditsimpactontheenvironment

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ConsumerMaintenanceContinued..

ProcessesWithMostSignificanceonEnvironment

Cottonproductionhasthemostsignificantimpactondenimmanufacturingincomparisontotheothermajorcomponentsaslistedbelow

23%

6% 2% 1%

WaterConsumptionByManufacturingProcess

FiberConsumerCareF b i P d i68% FabricProductionPackagingOther

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Sustainability=Ambiguity

51%ofshopperssaysustainablereferstothedurabilityorlongevityofapparel51%ofshopperssaysustainablereferstothedurabilityorlongevityofapparel

14%areunclearofsustainability'smeaning

50%ofconsumersthinkclothingimportedfromothercountriesislessecofriendlythanclothingmadeintheUSA

ConsumerConcernVS.ConsumerActivism

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FutureofPremiumDenim?

PremiumRedefined

Marketingcreatedtheperceivedvaluethatmanufacturingoriginmeantpremiuminthedenimindustry NEVERAGAIN

Millennialsexposuretoandabundanceofproductinformationwillcreatedemandforrapid,accurateandaccountableinformation

Millennialsdemandvalid&transparentinformationinordertofullysupportcompaniespracticingsustainabilitywithinproductmanufacturingoraproductslifecycle

SustainableComponentsofPremiumDenimSupplyChainTransparency

LaserWashingReductionInWaterConsumption

SustainableDyeMethodsRecyclingofFibers

SupportingLocalEconomies

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Sustainability,FiberDemands&CottonAlternatives

2010 MarketshareofCottontoPolyesterwas50/50

2020 Marketshareestimates35%Cottonand65%Polyester

ManmadeCellulosicFibers Approx.7%

Consumersaredemandingsofterdenimwithmorestretch

Tencel,Modal,ProModal arebecomingincreasinglymorerelevant

T400,Celliant,Sorona,Dyneema aretrendinginperformance denims

MarketingForaNewGeneration

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SustainableDenimManufacturingFuture

NaturalFiberProduction DyeStuffs Machinery

FiberRegeneration

CellulosicFiberTencelPromdal

BuyBackP

ConsumerEd i

g y

BluesignArchromaNatural

VegetableDyes

LasersG2Waterless

WashingMachine

BionicYarnsSonoraReprieve

OrganicF i

Loyalty&SupplyPrograms Education

A.P.CMadewell

EileenFisher

BCIGreenpeace

FairTradePrograms

Farming

OrganicCottonPesticide&

HerbicideReduction

TransparencyatinceptiontoavoidGreenwashing

SupplyTransparency

Consumerperceptionsthatsustainabilityrelatestothelifespanoftheirclothingpointstoconcernsthattheyhaveaboutapparelqualityanda

HowwillFastFashioncompetewithaneducatedconsumer?

g p y pp q ypossiblediminishingattractiontodisposableinexpensiveclothing.Embracingsustainabilityintermsofclothinglongevityfromaconsumersperspectiveandenvironmentalresponsibilityfromanindustrystandpointcouldbegainingheadway

Thelongtermfinancialcostsoffastfashionforconsumers,coupledwiththepotentialdetrimentalenvironmentalimpacts,couldacceleratetheexpansionofsustainableapparelofferings.Connectingwithconsumerstohelpreducetheenvironmentalfootprintofapparelcanbeaidedbycommunicatinganddemonstratingclearfinancialsavingsandsustainabilityadvantages

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Whoisdoingtherightthing?