Portugal, the green Eldorado of fashion

Designers, and even more consumers, are far removed from the idea of raw materials and manufacturing; what goes into making our clothes, where it has been made and by whom. While China has been playing a major role in globalisation in the last twenty to thirty years, and Western brands were turning a blind eye on the detrimental social and environmental impact of mass manufacturing in developing countries, the fashion industry is now looking at bringing its production closer to home. And this nearshoring comes with major advantages, in terms of costs, speed and most importantly sustainability, that are yet to be acknowledged.

For already ten years, businesses have tried to break free from a co-dependent relationship with Chinese manufacturing that has not only been dangerous but also difficult to walk away from. So when Covid-19 spread all over the world at the beginning of the year, supply chains were completely disrupted, orders were cancelled in bulk and suppliers were left with piles of unwanted garments accumulating in empty warehouses.

The pandemic has only accelerated the need for shorter supply chains with faster reactivity and better codes of conduct. A study conducted by McKinsey in 2018 showed that 79 per cent of manufacturing experts believe that a shift towards nearshoring is likely by 2025, and one of the countries in Europe that will most benefit from this change is Portugal.

The Iberian country detains an incredible tradition in leather, textile and footwear manufacturing, and has grown into a powerful industry with great capacities, ambitions and opportunities. In 2020 the apparel market’s revenue amounts to $5,5 billion and is expected to expand annually by 6.2%. As this year’s European Green Capital, Lisbon hosted the Sustainable Fashion Business Conference last October highlighting how the country known for its flexibility, quick response, know-how and innovation can lead the way towards a more sustainable fashion industry.

Many fashion labels from small independents to large luxury brands have already taken advantage of the high-quality products and sustainable innovations Portuguese factories have to offer, and can already witness the shift in customers’ shopping behaviours. While this market was only a niche a couple years ago, sustainability will become a major purchasing factor in the next five years according to McKinsey and businesses are already increasingly adopting circular economy models in response.

In one of the conference’s panel discussions, Mafalda Mota Pinto, CEO of production agency SCOOP, highlighted the importance of collaboration with suppliers to implement sustainable practices and fight textile waste. “Portuguese factories are eager to be part of the change in the fashion industry and it’s the right moment for brands to challenge manufacturers to be closer to the design and development stages but to also be involved in the process of selling differently, through pre-order or even direct-to-consumer,” she told us.

If Portuguese factories don’t have the capacities to produce volumes that could compete with Asian markets, they do however have the flexibility to manufacture small, tailored quantities with shorter lead times. While labour costs in China are rising to almost $4 an hour but stay relatively low, Portuguese factory workers are earning an hourly rate of $8 which is about 1.5 times higher or almost equivalent to some Eastern European countries. However, companies such as SCOOP are complying with strict ethical standards (ISO 9001, SA 8000, GUIA SA 8000) to take responsibility for preserving the environment and providing superior health and safety conditions for all its employees. Plus, the unique craftsmanship and artisanal flair of these factories combined with an innovative and creative approach enable the production of premium garments that are instantly recognisable.

Production company Valérius is already equipped with the latest technologies to respond to the needs of the sustainable fashion market. By co-working with its 150 brand partners, the company offers integrated innovative solutions to combat waste and invest in a circular business model. It is now working on a new project called Valérius 360 to recycle clothing waste from its internal productions and external partners to produce recycled yarn and recycled cotton paper and give leftover textiles a new life.

“We work to be perceived not only as a manufacturing partner but as a key player on each business strategy,” says Elsa Parente, CEO of RDD Textiles at Grupo Valérius. “Brands need an agile sustainable supply chain and we make this possible by integrating our customers and long-term partners in all of the green projects we are working on.”

By also working hand-in-hand with his suppliers, French designer Mats Rombaut is taking sustainability to the next level by exploring new and creative ways of using materials and plant-based textiles. He started working with factories in Guimaraes seven years ago for his eponymous brand because of the production’s accessibility, its approach to sustainability and its willingness to experiment. Last season, the designer introduced his first biodegradable sole made of apinat, a new biodegradable polymer.

“Collaboration and partnership are essential to learn and progress,” explains Rombaut. “We recently started working with a research lab in Portugal to develop new interesting sustainable techniques and applications, and we’re excited about what’s coming.”

With their new label VIRÓN launched in August, Rombaut and partner Julian Romer are creating shoes in a closed-loop system – each shoe is made with a recycled rubber outsole that can be recycled over and over again. Sold at a more accessible price point than its sister brand, VIRÓN shoes are proudly carrying the ‘Made in Portugal’ label which adds value to the product because of its environmental significance and its support to local traditional craftsmanship. This, the designer believes, is what his young customers are looking for and are really concerned about.

This shift of mindset towards sustainable products coming from the new generation of consumers has also been noticed by luxury e-commerce platform Farfetch. “Consumers do increasingly care about these issues, and the provenance of a product is often built into perceptions of quality and brand image, which definitely impact buying decisions,” says Thomas Berry, Director of Sustainable Business at Farfetch.

To help and educate customers about making positive shopping choices, the platform has set up the Fashion Footprint Tool in partnership with ethical rating agency Good On You. Brands and products are assessed against a broad set of social and environmental criteria and certifications, which include where and how clothes are made, but also what kind of labour standards the people who make those clothes are working under.

There is then a case for brands to start building partnerships with textile manufacturers in Europe on many levels. Portuguese production already has the tool to make it happen and grow even more through a completely different approach focused on high-end, low volume businesses, while building on innovation and sustainable production. ‘Made in Portugal’ is a symbol of quality and reliability, but it also means the product was made in an environment that is socially and ecologically responsible, which sets an example for the fashion industry to clean up its supply chains and enable change for the better.