Can This Tiny Midwestern Startup Become the Beyond Meat of Leather?
Fashion designers, environmentalists, and car companies are desperate for someone to invent animal-free leather. This Peoria, Illinois upstart thinks it can.
In September, Luke Haverhals, a 41-year-old former chemistry professor from Peoria, Illinois, found himself at London Fashion Week, strolling through the exhibition halls while dressed in his go-to power outfit: a white dress shirt, blue pants, a brown belt, and a two-year-old sports jacket selected by his wife, Noelle. Very presentable, he thought. He passed by a collection of eco-friendly couture — dresses made from discarded can tabs, bags crafted from landfill waste, swimwear constructed out of ocean plastic — before stopping at an exhibit by Felder & Felder, the British fashion label best known for its distressed leather jackets, laser cut dresses, and daringly sheer shirts.
Like a tourist arriving at the Eiffel Tower, this was the singular thing he had traveled thousands of miles to see: a mannequin draped in a sleek, shimmering gold evening gown. Under the spotlights, the material looked glossy, almost latex-like, but it’s about as far from latex as chemically possible. The dress — and Haverhals’s brown belt — were both made from Mirum, a plant-based leather substitute cooked up by Haverhals’s company, Natural Fiber Welding.
Haverhals’s company is one of several startups competing to solve the fashion industry’s big sustainability problem. Fashion’s constant churn has created massive amounts of waste, accounting for 8% of greenhouse gas emissions and 20% of industrial water pollution globally, according to sustainability organization, Global Fashion Agenda. If nothing changes, it’s on track to consume 25% of the world’s carbon budget by 2050.
As animal-free meat companies like Beyond Meat and Impossible Foods tear through the food industry, taking consumers along with them, there’s been growing interest for animal-free leather. The market for leather alternatives is set to be worth anywhere from $45 billion to $85 billion by 2025, according to a report by Grand View Research. (For comparison, in 2018, the global leather goods market was estimated at $95.4 billion.) “It’s becoming essential for fashion retailers to cater to vegans shopping for alternatives to leather, wool, and skins,” says analyst Kayla Marci from retail data company, Edited, noting the 41% growth of vegan apparel in the U.S. since 2017. The demand for leather alternatives goes well beyond fashion, too. Although the auto industry still uses some $30 billion of leather globally, more car makers are shifting to faux interiors. (This June, Elon Musk pledged that Tesla cars would become 100% leather-free by 2020.) And the auto industry now consumes nearly 48% of all faux leather.
But most faux leather has a dirty little secret — it’s an environmental nightmare. PVC, polyester, and polyurethane leather are made from petroleum, transformed into fibers through a process that spits carbon dioxide into the air. The materials can take hundreds of years to decompose and clog the oceans with small plastic particles. The animal-free holy grail? A faux leather that isn’t terrible for the planet.
Over the past five years, several startups have jumped into the race to create a plant-based leather, fueled by hundreds of millions of dollars in venture capital. Each one is working on its own version of animal-free leather — ranging from converting mushrooms and pineapples to fermented yeast. But so far, one company has shown the most potential for scaling, and that’s the unlikely player in Peoria. Its secret ingredient: agricultural waste.
Peoria would seem an improbable home for the future of fashion. A three-hour drive south of Chicago, the city has a declining, aging population and is a graveyard of industry. Once the whiskey capital of America, its wealth dried up after prohibition. Since then, Peoria’s big claims to fame include being home to the largest USDA lab in the country (you can thank it for mass produced penicillin, disposable diapers developed from their “Super Slurper” starch polymer, and Xanthan gum) and for some 90 years, the headquarters of Caterpillar. That is until 2017, when the tractor company relocated north of Chicago, leaving behind an estimated 12,000 workers with skills in manufacturing and distribution.
On a sweltering September day inside a nondescript building in North Peoria, Haverhals is stationed at a conference table with his creations: a thick spongy material designed for yoga mats, a car door panel lined with butter-soft Mirum leather, sheets of leather-like substances of various colors and thicknesses, some embossed with elegant swirling designs (good for wallpaper!), and some thicker, tougher pieces, designed for patches on jeans and jackets. There’s also a belt that matches the one at Haverhals’s waist.
The walls of the room are bare. The company moved into this space a few months ago, but this is a lab, not a fashion company. Decorating is low-priority; apart from some mannequins in the hallways, it’s easy to imagine it vacant. Haverhals eyes my Gatorade bottle (I’m dehydrated from my travels) with disdain. He’s not a fan of plastic. “Take your Gatorade and fill it roughly a third of the way full with petroleum — that’s what needed to be taken from the ground to make it,” he says.
He then passes me his wallet, still warm from his pocket. The light brown Mirum leather is soft to the touch, and flexible under my fingers. I give it a sniff, inhaling a woodsy, pine-y fragrance. “That’s the essential oils,” he says, explaining that each batch is infused with a unique scent formula. That is, except for the materials Mirum is creating for the auto industry, which specifically requested zero odors. “You know that new car smell people like?” he asks. “The car companies spend a lot of money to eliminate that.”
Born into an Iowa farming family, Haverhals grew up around cattle and watched his father harvest corn and soybeans each season. Fascinated by the science behind farming, he studied chemistry at the University of Iowa, and in 2008, he was hired by the U.S. Naval Academy in Maryland to investigate ways to imbue plant fibers with the properties of synthetics. “The core idea is that petroleum is limiting in some profound ways,” says Haverhals. Extracting it causes environmental damage, burning it increases greenhouse gases, and plastic products made from it can take eons to degrade. One of his projects was developing a way to strengthen silk so that it could replace petroleum-derived nylon in aircraft parts. He ended up creating a proprietary solvent that could weld the natural fibers together. “If you confuse fibers with chemistry, you can use natural fibers as if they were plastic,” he says.
In 2013, Haverhals moved back to the Midwest, taking a tenure-track position at Bradley University in Peoria so his three daughters could be closer to their grandparents. (“He is hot, but very confusing,” commented a student on RateMyProfessors.com.) Meanwhile, he continued research at the local USDA lab, obsessed with creating alternatives to petroleum-based products. There, he developed a technology to produce a cotton fabric that was stronger and more durable than petroleum-made polyester.
After he shared this discovery at a university demo night, it caught the eye of Steve Zika, a local venture capitalist with a background in engineering in textiles. Zika’s resume includes 14 years at Advanced Micro Devices and helping his daughter found KidKnits, a nonprofit that sells yarn from developing countries.
Impressed, Zika became Haverhals’s first investor — “a small sum,” he says — and eventual co-founder and COO. They named their company Natural Fiber Welding, a no-nonsense Midwest name that told it like it was. But supercharged cotton was a hard sell. They could make the yarn, but to scale it, they needed buy-in from textile mills that were willing to invest in specialized equipment and training. And they were running out of cash. Haverhals felt boxed in; he knew his work could have a huge environmental impact, but he hadn’t reached the tipping point yet. So in the summer of 2018, the founders had a tough conversation: Zika emphasized that they had to switch up their business model or be forced to scale down. They began working on plant-based leather. With so many startups working to create the stuff, Haverhals thought he could do it better and cheaper.
There are about as many ways to make plant-based leather as there are plant-based leather startups. One of Natural Fiber Welding’s biggest competitors, New Jersey-based Modern Meadow, uses fermented yeast to manufacture collagen proteins, which is then dyed and assembled. It takes the company two weeks to make each “lab-grown” leather sample, and although the company has customers lined up, the product is not yet commercially available. German startup ZVNDER’s been making vegan leather from tree mushrooms since 2017; each handmade batch takes up to a year to create. Bay Area-based Bolt Threads is also going the fungus route: The company partnered with Evocative to grow their mycelium in 3D grids and compresses the resulting material into a biodegradable leather, “in days, versus years.” (Although, lately there’s been trouble in mushroom-land: In March, Evocative hit Bold Threads with a $20 million lawsuit for a contract breach, causing Bolt to change its delivery dates from 2019 to 2020.)
Then, there’s the fruit-based leather: London-based startup Piñatex strips and processes pineapple leaf fiber into an unwoven mesh, to create a supple leather that can be customized by color and texture. A number of boutique fashion brands have partnered with the company (although Piñatex uses a synthetic material to “finish” the product, so not all of it is biodegradable.)
To make Mirum — named from the Latin word, miraculum, for miracle — Haverhals’s team combines agricultural waste such as cork powder (the dust leftover from cork processing), coconut fiber (harvested from the outer husk), and rubber. Then comes the chemistry — the addition of what Haverhals describes as a salt-based “magic pixie dust” solution. The reaction glues the fibers together, creating a composite that uses zero synthetic materials. (Sometimes they’ll add mineral pigments and plant dyes at this point, which is how they achieved the vivid gold for the fashion company, Felder & Felder.) The slim stretchy material is then pressed into molds, which help set qualities like thickness, style, and texture. Finally, it’s baked, and cut into sheets or rolled, ready to ship. “We’re thousands of times faster than how fast mushrooms grow,” says Haverhals. Mirum can also be reused; Haverhals claims that in tests, they’ve recycled it 12 times with no degradation.
So far, Haverhals says Natural Fiber Welding has licensed Mirum to 20 companies, including the small sustainable fashion brand Toad&Co and Felder & Felder, which specifically requested something “shiny and modern.” According to him, another 171 brands are also sampling Mirum under NDAs.
One area where Natural Fiber Welding lags behind the competition is money. To date, the company has raised only $13 million, much of it in research grants from the Department of Defense, which is interested in R&D offshoots (a side project Haverhals is exploring is making yarn that stores electricity). It’s pocket change next to the $213 million raised by Bolt Threads and the more than $53 million raised by Modern Meadow.
Fortunately for Haverhals and Zika, space, labor, and equipment come cheap in Peoria. One of Haverhals’ three mills, a towering hulk of burnished metal, dates back to 1952. “We got this for less than $200,000,” he says. (Someone knew someone who knew someone who had it mothballed in a warehouse.) Walking around the factory, I saw buckets and buckets of raw materials — agricultural waste — much of which they get for free. “We asked the factories for one bag and they sent hundreds,” says Haverhals.
“There’s a bunch of economic rules that just operate differently here,” says Zika. “It’s just really, really, efficient to do business — what you can get for your money versus doing this in Silicon Valley.” Still, their lack of capital has hampered their growth, he admits, and has forced them to be selective about how they spend their money; no flashy marketing campaign or New York PR agency for them. “The Midwest is good at figuring out how to achieve a lot of things that VCs on the coast might think is an unrealistic amount of money,” says Zika. But they know they’ll need to raise more, soon, to scale up; without another $10 million, production will slow.
The other hurdle for the company is self-imposed: its branding. Natural Fiber Welding’s industrial-sounding name isn’t exactly catchy. “Everyone is looking for sustainable alternatives, from Gap to Burberry,” says Stephanie Downs, co-founder of the Material Innovation Initiative, a think tank exploring the emergence of vegan materials. “The companies that build their brand could really rise to the top — the way Beyond Meat has in the vegan food market.” Manufacturers have moved from white labelling their products to promoting themselves. “A Gucci bag doesn’t say made from Tyson’s cow leather!” she says.
“To change the world, you have to have price points that are relevant to the masses.”
Ultimately, says Downs, the winner will largely be determined by quality and pricing. “The look and feel of real leather is crucial,” she says. That’s because plant-based leather isn’t just competing against real leather — it’s also competing against plastic leather, which has gotten much better at imitating the original. “It’s not the pleather of the ‘80s any more,” Downs says. “The materials aren’t good for the environment, but from a quality standpoint, synthetic leathers today are amazing.” Downs says Natural Fiber Welding’s product shows promise: “There is a really nice look to it,” she says.
All the animal-free leather startups claim to be price competitive with both leather and pleather, but the reality is, they still have a long way to go. For example, London-based Piñatex is the only one of these companies that discloses the price of its leather — pineapple leather — selling for about $40 to $55 a yard. That’s less expensive than high-quality leather, which can run up to a couple hundred dollars for an equivalent amount of material. But it’s certainly a leap from high-end synthetic leather, which can go for about $13 to $30 a yard.
Haverhals and Zika won’t reveal their prices, but they admit that the first Mirum products are “on the luxury end.” “The cynical truth is that you can’t be sustainable if your stuff costs a lot more,” says Zika. “If you’re even 20% more, the industry won’t support it.” If they can’t get large scale adoption, they can’t have a large scale impact on the environment, concedes Haverhals. “To change the world, you have to have price points that are relevant to the masses.”
The founders maintain that once production ramps up and they have scale, their prices will come down. Right now, Natural Fiber Welding has 25 full-time employees, a number they plan to double by the end of the year. “We aren’t trying to create a vegan thing for the sake of veganism, we’re creating this because it’s the most scalable technology humanity can access,” Haverhals says. Experts estimate that over the next 30 years, the world’s reserves of petroleum will be exhausted, and long before that, price hikes will make petroleum too expensive for mass-produced clothing. “Other companies might have a nice material, but we’re scaling up to produce the first million square feet of Mirum, then tens of millions, then billions…” he says. “Other startups will never scale to anything that petroleum notices.”
That’s the best case scenario — one that Haverhals has a lot riding on personally. He abandoned his tenure track position at the university, and his fixer-upper house still remains unfixed. “I’ve risked so much,” he confides. For now, all he can do is work the phones, go to industry trade shows, and have faith that his science and Midwestern can-do spirit is enough for his startup to change the fabric of an entire industry.
Update: An earlier version of this piece mischaracterized the creation of Natural Fiber Welding’s leather. The technology was developed by a member of company’s R&D team.