NOPSA Members

Ostrich leather in an uncertain luxury market

3 March 2009

The well being of ostrich leather is greatly determined by the worldwide luxury market. It would therefore be advisable to analyze the luxury market and try and determine the picture they have of business for the next 6 to 12 months.

At least 30% of ostrich leather is sold to luxury brands. This market requires absolute quality and is therefore a sought-after market where quality matters more than the price.

In late 2008 several economic and stock market researchers indicated that, with the global economic downturn, the luxury market would be negatively affected although less than the rest of the retail market. According to one researcher the luxury market is the slowest to be affected by an economic downturn, but when it comes to an upturn in the economy the luxury markets lead the way.

For the ostrich industry there is the benefit that three by-products are obtained from an ostrich. Other than the leather, meat and feathers are currently enjoy high demand with prices to the farmers at an all time peak. This situation is also the result of a drop in production volumes with a substantial number of smaller farmers withdrawing from the industry all together.

The market for ostrich meat is mostly in Europe where the product is highly appreciated as an alternative to other red meat because, with its low cholesterol content, it is considered the healthy choice. In the early nineties the contribution to the total income of ostrich meat was only 20% compared with the 50% of today. Various market and product development strategies helped to achieve this industry-saving contribution. The future challenge is maintaining the high level of biosecurity currently in place as well as meeting the stringent import requirements of the EU.

The immediate challenge for ostrich leather is to get through the current market turmoil in the following ways:

  • Develop new finishes.
  • Focus more on the specific needs of customers.
  • Maintain price integrity of the product.
  • Generic marketing on an industry base. The recent supplement of 20 pages in ARPEL is an example.
  • The industry should emphasize its association with the top luxury brands.

Source: Frik Kriek, SAOBC Leather Committee

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