The problem with overproduction, explained

Each year somewhere between 80 and 150 billion garments are produced by the fashion industry, depending on what researcher you rely on. The clothing that gets manufactured, shipped, bought, and returned has skyrocketed since the turn of the millennium, and while the environmental and social damage is spiraling out of hand, the industry is struggling to track and trace its overproduction.

Why does overproduction happen?

Overproduction means that companies produce more than they can sell. For the fashion industry, excess production is not born out of miscalculations — quite the opposite —  it’s a precise calculation of profits and losses.

The main culprit for the industry is the escalating rise of fast fashion. According to the Transparency Fashion Index 2022, the fashion industry doubled its production of garments between 2000 and 2014, and goes through a 2.7 per cent increase in volumes annually. Up until the mid-twentieth century, the fashion industry was much slower with two to four collections per year. Designers would also plan ahead for months to plan and predict trends. Today the industry’s biggest players produce weekly collections, or ”micro-seasons”, to stay relevant and meet consumers’ ever changing demands.

If time is money, the fashion industry wants to pinch every penny. The design process needs to be fast, and the sourcing and making of the clothes even faster. Bad quality is compromised for cheaper and faster.

This affects the whole industry — from producers, to brands, retailers, and the end-consumer. It is built up on the idea that it’s easier, and cheaper, to just get rid of excess clothing. Reselling and donating clothes come with logistical and administrative costs. In France companies can recover the value-added tax for products they destroy, but not for those they donate, for example.

It is less expensive and logistically easier for retailers to order too much clothing than the opposite way round. Furthermore, manufacturers might have a minimum threshold on order quantities. This means that brands, and also retailers, are forced to resort to overproduction and purchase more than they plan to sell.

This is proven in data on retailer’s sell-through rate (STR). Accelerated Analytics reports that apparel retailers don't reach a STR above 68 per cent until a year after getting the garments through the door. A half year after receiving their ordered clothes the STR is at 45,5 per cent, and after two months only 24,3 per cent of the garments are sold.

Additionally, the individual end-consumer also purchases large quantities of clothes from e-tailers because of free shipping and to-good-to-be-true deals that reach them daily via social media. Bloomberg reports that the modern piece of clothing is worn on average seven to ten times, and according to Columbia Climate School, 50 per cent of all clothing that reaches the UK is never even worn. When every cog in the fashion machine has to move on to a new collection and trend, the already produced and purchased clothes are thrown away.

The environmental and social impact of overproduction

To start with, the fashion industry has a hugely harmful environmental and social impact when clothes are produced, even if the clothes are actually worn and torn. Fashion accounts for up to 10 per cent of global carbon dioxide output according to the United Nations Environment Programme. This is more than international flights and shipping combined. The fashion industry also accounts for 20 per cent of the 300 million tons of plastic produced each year. Cheap garments made from polyester and other synthetic fibers cause microplastic pollution, especially harmful to marine life.

On top of this, fashion’s challenges of overproduction literally adds fuel to the fire. In the UK, 80 per cent of the 300,000 tonnes of clothing donated to charity is incinerated, reports Bloomberg. And according to data from the U.S. Environmental Protection Agency, the amount of clothing and footwear waste generated in the US reaches up to roughly 13 million tons each year. Out of these 13 million tons, around 70 per cent of that clothing ended up in landfills, usually within a year, and only 13 per cent was recycled or put to other use. 

Those 13 per cent need scrutinizing though. When end consumers, manufacturers and brands decide to donate their clothes, much of it ends up in landfills in less developed countries, with west African countries usually getting the shortest end of the stick. According to the Fashion Transparency Index report from 2022, collected clothing is sent to second hand markets in the Global South, with the biggest importers being Ghana, Ukraine, Nigeria, Kenya, and Tanzania.

“The stuff that arrives in those markets in Ghana, 40 percent of it doesn't even get sold. It just gets trashed,” Maxine Bédat, the founder of the New Standard Institute, told Complex in 2020, adding: “We are dumping our cheap and crappy clothing on them and they don't have any use for it.”

Simultaneously, the excessive amounts of clothing will hinder these countries’ attempts to build domestic textile industries. African countries once had functioning textile industries, and some critics say that the cheap donated clothes is one reason for the continent’s shrunken textile sector. Deutsche Welle reports that the poorly made clothes, sometimes made with toxic dyes, also end up around or in water bodies. People living downstream from these water bodies will then drink water filled with harmful chemicals. Donating and moving excess clothes from one place to another doesn’t mean it’s circular.

The hidden statistics

Finding an exact number of what each fast fashion and luxury brand produces annually is nearly impossible. Finding out how they work with materials, textiles, factories, garments workers to name a few, is even harder. We’ve established that fast fashion brands are producing more and more every year and we as consumers are buying into it in a way that will eventually be more costly for the planet, than what it would have been to invest in a product that might have been a bit more expensive, but produced in a better, ethical, and more sustainable way.

With this in mind, it's important to be aware of greenwashing claims as many brands toss terms such as ‘ecological’, ‘sustainable’, ‘organic’, without really knowing what sustainable materials actually constitutes as. According to this year's Fashion Transparency Index, where 250 of the world’s biggest brands were reviewed, a little less than 50 per cent of major brands actually publish their sustainable material targets, yet out of this percentage, only 37 per cent can provide information on what the terminology actually entails. Where the garments actually end up is something brands tend to avoid disclosing as well. In the study conducted by FTI, 85 per cent of the brands did not publish or disclose their production volumes, meaning that only 38 out of the 250 brands were able to provide this information. With the numbers of how much is actually being produced and thereafter discarded, the quantity of garments and textiles that end up in our landfills were near impossible for FTI to calculate.

Adding to the transparency issues, when we look at sell-through rates for retailers, they can vary quite a bit. According to data from Accelerated Analytics, the number is around 40 to 80 per cent for apparel retail. Like previously mentioned, apparel retailers reach a sell-through rate of 24,5 per cent of two months old clothes, and 68,7% for one-year-old clothes. When new collections are coming through the door, unsold clothes are either donated to charity or bundled and sold by the pallet at auctions. With this in mind, knowing that the industry produces between 80 to 150 billion garments annually, it is clear that the sell margin can be anything from 40 per cent of 80 billion to 80 per cent of 150 billion. The margin of error is huge, but the fashion industry’s challenge of overproduction is larger.