Companies that make products from leather are facing tough times: the supply of leather is dwindling as fewer people eat meat, with the US cattle population dropping by 32% in the last few decades. Meanwhile, demand for leather hasn’t followed suit. The global luggage and leather goods industry is predicted to grow at a compounded rate of 4.5% annually through 2018, in part as a result of growth in the travel industry and increasing consumer wealth.

Modern Meadow, a New York startup, is hoping it can find the solution to this problem at the bottom of a petri dish.

The company is experimenting with cultured animal cells and tissues to create an alternative biomaterial to traditional leather. This lab-grown leather could offer a more sustainable alternative and even a possible longterm bridge for the gap in supply and demand.

Suzanne Lee, Modern Meadow’s creative director, claims the leather also could eliminate defects generally seen in leather, such as scars and inconsistency in quality and color. It could also offer a new frontier of material and design development – properties such as durability, elasticity, strength and water resistance can be controlled and altered – resulting in options that aren’t possible with leather from cows, she says.

Alternatives to farm-grown leather already exist, but so far, they have been inorganic – not biodegradable – and heavy contributors to environmental pollution.

Charles Margulis, media director at the Center for Environmental Health, a group that tests accessories for toxins, says the production of PVC – such as that used in ‘pleather’ – has been linked to cancer, while other petroleum-based plastics used in fake leather contribute to climate change. This is often compounded by the use of dyes that contain toxins, including lead. “In 2014, about one out of every five fake leather items we tested contained lead,”Margulis says.

Modern Meadow aims to create an organic alternative that doesn’t harm animals or the planet. It plans to begin limited pilot production on lab-grown leather as early as next year.

But it’s a long way from the lab to the market. And despite the shrinking supply, the industry may not be ready for lab-grown leather.

One issue, according to UK Leather Federation director Kerry Senior, is that there have been many occasions in which companies have misrepresented lower-quality synthetics – or materials made from leather waste – as leather. That could make it a harder sell for alternative materials claiming to be leather.

Senior points to a case where the Australian Competition & Consumer Commission found Toyota to be misleading and deceptive in describing their car interiors as leather, in advertising and promotional materials, when they were only partially made of leather. “Terms such as faux leather, synthetic leather, leatherette, vegan leather and bonded leather are misleading to consumers and damaging to the leather industry, particularly when those products fail to perform as well as leather.”

Ben Wurgaft, a historian based at MIT who is writing a book about laboratory-grown meat, applauds Modern Meadow’s ambitions but says that, given the speed at which fashion changes, the company’s success depends on whether it can scale up quickly.

Continual funding, he says, is not a certainty, which means that the company is racing against the clock to develop product and hit a widespread market. “If their loop of production and profit doesn’t hum within a certain number of years, it may have implications for their ability to achieve some of their longer-range goals, including more sophisticated types of materials research and development.”

Even though environmentalists and animal activists often criticize the leather industry for its pollution – especially of tannery effluent – and the killing of animals, the demand for the material has not diminished. Automotive leather is the most notable sector for growth, currently the fastest growing sector for leather use, Senior says, who also notes that the value of global exports of finished bovine leather, far and away the largest sub-sector of leather, grew by 33% between 2010 and 2014. Although demand for leather is high, he says, large increases in the cost of hides and skins following the global economic crash in 2008 has meant that tanners have seen their margins severely squeezed.

Suzanne Lee, creative director at Modern Meadow, says there are fewer hides to go around and quality is unpredictable. Across the board, from low-end to high-end luxury, Lee says, designers and brands are looking for an assured supply of high-quality leather and it just isn’t there. She hopes to fill this niche.

At a TED talk two years ago, Modern Meadow CEO Andras Forgacs held up a transparent material cultured entirely from bovine cells. Samples like that one will be part of a material library portfolio Modern Meadow plans to share with designers and brands. The company can then tune these capabilities to meet the designers’ preferences.

Last year, Senior attended a Forgacs presentation in the UK and was able to touch the samples. “It felt like cling film,” he says. “I don’t think they have anything that would be a useful substitute for leather.”

One of the biggest challenges, though, is that lab-grown leather does not meet any of the acceptable definitions of leather, which is typically described as “hide or skin with its original fibrous structure more or less intact, tanned to be imputrescible”, Senior says.

Lee admits that the company still has a long way to go in terms of research and development, producing the leather, and being able to provide product samples. She also says the research and development samples shown at presentations in no way reflect the finished product that would be available once the company reaches commercial production, or even pilot testing.

The startup got its big break last year when Horizons Ventures, the venture fund of Hong Kong billionaire Li Ka-shing, funded it to the tune of $10m. Today, Modern Meadow shares its Brooklyn space with the Gates Foundation-funded International AIDS Vaccine Initiative, which is developing two AIDS vaccines.

Lee and her colleagues see their materials program as much more than replicating leather. What she and colleagues find exciting, she says, is that they can produce something that is leaning in the direction of bio-mimicry or a completely new material. “We plan to also create composites that looks nothing like an animal product at all and are high-performance biomaterial.”

Their primary aim, through their materials and foods programs, is to benefit the environment and animals. Unlike with traditional leather processes, there is no hair, flesh or fat to remove. The material can also be scaled to size, significantly reducing or eliminating waste. The result, Lee says, will be an incredibly light footprint. “We are constantly looking for efficiencies along the way and in every process we currently do.” This includes challenging themselves to use less packaging, less water and to shorten timeframes at the research and development level.

But there can be a big difference between theory and reality, and Senior remains skeptical. Even if the technology has advanced since he last saw samples and even if it could be usable as an alternative to leather, Senior doesn’t think it will be made in sufficient quantity or at a cost to be a viable option for most brands. It is interesting work, and the technology that is being developed could very well be the future for many products, Senior says.

He adds, though: “I suspect it will be a distant future.”