The $40 Billion Fur Market May Not Be What You Think

Is the fur trade really as "sinful" as animal rights activists claim? Not necessarily.

Fendi sent out 36 fur garments, among them a fur coat worth 1 million euros, said to be the most expensive ever made. That was the spectacle at Fendi's haute couture show in Paris on July 8. As always, when the music stopped and the crowd left, two opposite verdicts remained: breathtaking, or, what a sin.

Designer Karl Lagerfeld, speaking to WWD, struck the usual "politically correct" note, though he also looked back on the industry's glory days: "I remember 30 years ago, we made the last 20 sable pieces. If you wanted something like that now (which might be hard), these animals aren't hunted anymore, so you could find one, two, at most three pieces of the raw material. It's hard for haute couture now, because the old rules of this business are changing. So now we have to invent new techniques to blend them with feathers. It's not the 1980s anymore"...

It sounds like an industry in steep decline, clinging on. Don't be fooled by Lagerfeld. Animal rights activists have been at it for more than 30 years, moving from animal welfare to animal rights and then raising the banner of "fair trade." Fur may seem to have become something everyone loves to attack, but in fact it has not.

Fur production and consumption have both been growing for years

Over the past few years, global fur sales have more than doubled: from US$15.6 billion in 2011 to US$35.8 billion in 2013.

According to Saga Furs, the Finnish auction house, 73% of the 436 shows held this year in New York, Paris, Milan and London featured fur. Last year, 70% of the runway shows at New York Fashion Week involved fur, and 60% in London.

Designers are increasingly interested in fur, too. In 1985, only 42 designers in the United States worked with fur; today there are 400. For autumn 2015, 500 brands worldwide used fur in their collections.

People easily remember the graffiti protest at Calvin Klein's offices. After PETA (People for the Ethical Treatment of Animals) successfully applied pressure, the brand announced it would never design with fur again. That, mind you, was in 1994. People also remember Ralph Lauren, Tommy Hilfiger and H&M, which announced one after another that they were done with fur. These brands made their exits with great fanfare, never missing the chance to cast themselves as having evolved from barbarism into modern civilization. But as the figures above show, more brands have since taken up fur, and luxury houses are not about to pass up such a chance to show off opulence and craftsmanship at their peak.

Take Fendi. Founded in 1825, the brand made its name with leather goods, and fur is a point of pride for it. Just before this couture show, it staged an exhibition called "Un Art Autre" in Hong Kong, one of the world's most important fur trading hubs, to celebrate its achievements in fur craftsmanship.

Animal rights activists must be getting anxious.

How "sinful" is it, really? And would a ban end it all?

Today the market is a little bigger than it was in 2013: it has reached US$40 billion.

So the first question is: is the fur trade really as "sinful" as animal rights activists claim?

The guilt usually comes from what springs to mind when fur is mentioned: hunting, killing, one grim scene after another...

But the reality may differ from what you imagine. Only 20% of the raw material in today's global fur market comes from wild animals. The other 80% comes from fur farming.

At this point you may still picture something apocalyptic: sweatshops in developing countries. Again, the reality is different. In this US$7.8 billion fur-farming segment, the European Union is the main player. 63% of the world's mink pelts and 70% of its fox pelts come from the EU.

The country that produces the most mink in the world is Denmark, with 28% of the global total.

Denmark may not be what you think, either. You may picture a country that turns out Nordic-design chairs, whose designers dream up fresh ideas, that tops rankings of the world's most creative countries and wears labels like "the world's happiest country." In fact Denmark is more of an agricultural country, and its three big export weapons are pork, cheese and mink. Since the government began backing mink farming in earnest in 1930, Denmark has been the world's most important mink exporter.

Kopenhagen Fur, with annual revenue of US$1 billion, is also the world's largest mink auction house. More than 1,700 Danish mink farms supply it, and in 2015 it will put 27.4 million mink pelts up for sale. Over the past 10 years, fur dealers from mainland China and Hong Kong have become important buyers at its auctions.

As with pork, fur is a by-product of the meat industry. Generally, once the pelt is taken, the animal's meat does not end up on the dinner table. It becomes pet food, organic fertilizer, chemical fertilizer, pigment, even tires. Carcasses may become feed for zoos, or bait for crabs. Mink droppings are processed into organic fertilizer, and the fat is made into soap, face cream, cosmetics or leather-care products.

It is not as bloody as it is usually made out to be.

One more thing worth noting: Denmark's neighbor Finland, another country that is both green and remarkably creative, is the largest supplier of fox pelts to the United States. One mink, one fox: between them, these two countries hold up nearly half of the fur industry.

The second question concerns the other 20%: can those wild animals still be saved? Would a ban put an end to all this?

Here, besides US$40 billion, there is another number you need to know: 1 million people work directly in this industry. They include breeders, hunters, auction houses, middlemen, tanners and dyers, garment makers, marketing agencies...

1 million people is not that many. Take the workers at places like Denmark's "meat-processing plants": you could easily end their jobs simply by paying them compensation. But for some other people, it is not so simple. A frequently cited example is the Inuit.

From the 1820s to the 1870s, the Arctic fox fur trade was the Inuit's main source of income. Throughout that long half century, the Inuit carried Arctic fox pelts to Hudson Bay and traded them for necessities such as soap, sewing cloth, rifles and ammunition.

Ethnographic records show that during that period, the Arctic fox was the only resource the Inuit could trade with the outside world. Every Inuit family spent the whole winter hunting foxes. They set traps for Arctic foxes along the winding coastline and took their dogs out to hunt seals. The Arctic fox was their commodity; the seal was food, a gift of nature.

Even in the 1860s, when the Inuit had settled down, the fur trade remained the economic engine the people lived on. To this day, older Inuit hunters still hunt in winter, and it is the only way the Inuit keep their traditions alive. It is fair to say the fur trade fed the Inuit.

Are the Inuit killing wild animals? For a people who have lived by hunting for generations, hunting wild animals is an essential survival skill and, above all, a way of life.

A ban might end all this, but the ultimate cost would be the diversity of human civilization. The Inuit today survive without depending on hunting. But that is what the loss of diversity looks like: given the choice between the disappearance of wild animals and the disappearance of a distinctive human culture, the world chose the latter.

The global maritime fur trade system, 1790-1840

Besides, a perfectly correct slogan is not the same as the truth

Yes, we have to bring up that famous slogan, the animal rights activists' favorite: "When the buying stops, the killing can too." We should take it for what it is, a slogan. A correct slogan, but not necessarily the best way to solve the problem. PETA's position is that all fur trade should be banned outright. But if the part that can be controlled, fur farming, were shut down entirely, would the 20% of fur that comes from killing wild animals be any better protected?

More level-headed economists see it differently from animal rights activists. The whole world bans the ivory trade, they say, yet neither the trade in ivory nor the harm done to elephants has declined. Farming, on the other hand, has actually kept animal populations alive and prevented extinction.

In fact, the fur-farming industry, which supplies 80% of the world's fur, helps wild animals survive. Large-scale farming is itself a way to keep species from dying out. (Think about it: how has the chicken, which cannot fly, cannot run fast and sits at the bottom of the food chain, survived in a harsh natural world?)

In North Carolina, an organization called the Livestock Conservancy works to preserve rare breeds. Its approach is to get consumers and farmers interested in these animals so they don't die out. Red Wattle hogs, prized for their tender meat, and Randall cattle are two of its successes.

Fur producers now have a new weapon: the argument that fur is renewable

The Fur Council of Canada promotes the theory that fur sustainably produced from farmed mink and wild beaver is a renewable resource. The real target of this claim is not fur itself. What it means to say is that faux fur, one of fur's main substitutes, is a sham and not renewable: it is made from petrochemicals, and oil is not renewable.

And sustainability is not only about comparing fur with faux fur, that sham product. Fabrics regarded as ordinary get caught in the crossfire too. A chemically treated fabric carries a considerable environmental cost to produce, and it lasts at most 1-2 years. Fur is expensive, but nobody throws it away lightly; it gets worn for at least 10 years, even 20.

The fur industry is also working to change the perception that "fur is unnecessary, self-indulgent, an offense against nature."

The last question: with fur consumption up so sharply, who is buying it?

Broadly speaking, fur spending follows the world's hot money.

Russian energy tycoons were once the most important buyers. Sales have fallen since the ruble crisis, but given the bitter cold, demand is understandable: Russia and the Far East remain the strongest markets.

Even Dubai's heat is no obstacle. The fashion outlet BoF interviewed Mark Oaten of the International Fur Federation, who said that although summer temperatures in Dubai now reach 41 degrees Celsius, 400 fur shops there still sell fur, because new techniques combine fur with textiles to produce a lightweight fabric suited to summer.

And of course, China is part of the story.

According to figures released by the China Leather Association, Chinese consumers bought half of the world's fur in 2010.

China is not only the largest consumer of fur but also the largest producer and exporter. According to the International Fur Federation, China has become a major source of fur: in 2014, China alone supplied 35 million mink pelts. Chinese fur is plentiful but of relatively low quality, which has pushed Chinese fur makers to turn to high-end fur from abroad. In 2012, China imported nearly US$126 million worth of mink pelts from the United States alone.

The last contradiction about fur is that young people do not love it as much as their parents' generation did. Animal rights activists usually pin their hopes on this.

But for now, at least, the evidence does not bear it out. According to the Fur Information Council of America, 55% of fur buyers are under 44, and 1 in 5 American women owns a fur. Men's spending on fur is also rising year by year and now accounts for 5% of all fur spending in the United States.

You could even credit young people with the net growth of recent years. There is no "young people turning away from fur" here. If they are staying away, it is only because their spending power has not yet caught up: they may simply not yet be able to afford to "get close."