Is Denim Becoming Scarcer?

The denim industry faces numerous challenges, including economic pressures and talent deficits. Despite the collapse of commodity prices during the pandemic, cotton prices have since returned to their pre-pandemic value. The global market for denim jeans, estimated at US$63.5 billion in 2020, is projected to reach a revised size of US$87.4 billion in 2021.

American shoppers are increasingly turning to high-waisted, loose-fitting jeans, which companies believe will become a hallmark of the post-pandemic world. Denim has long been at the top of US consumers’ shopping lists, but experienced a double-digit decline in 2020 due to the pandemic. However, strong recovery in 2021 has seen growth estimates for the industry.

The global surge in denim demand is good news for Levi Strauss rival Kontoor Brands, with shares of Lee and Wrangler brands owner Lee and Wrangler up more than 35 this year. Coresight Research estimates that denim will hold a 4.5 share of the overall U.S. apparel market in 2023, down from a previous 5.5 share.

In 2023, the denim industry faced a supply shortage due to manufacturers downsizing and investing outside their home countries. However, experts express optimism for innovation and implementation of solutions to alleviate ecological and social issues. The biggest denim-supply-chain challenge is the lack of vertical integration and localized sourcing, which fragments the industry.

The lack of consistent sizing in the fashion industry contributes to demoralizing jeans shopping. International denim insiders share their thoughts on 2022 and what they expect to encounter in 2023. Other factors that have led to a “broken denim supply chain” include brands refusing to own their liabilities.

Despite these challenges, the denim jeans market is expected to experience robust growth, with forecasts indicating a substantial compound annual growth rate (CAGR).