The fibre battle: from the catwalk to your local mall

Think about it – you’re browsing in a shop and a piece of clothing catches your eye.

“This battle for the hearts, minds and wallets of consumers impacts global supply chains, trade policies – and the price of your next outfit.”

Do you check the label to see what fibres it’s made from – cotton, polyester, wool or something else?

Does that influence whether you buy it, or do you care more about the cost and look?

In the world of textiles, a fierce competition is playing out between natural fibres such as cotton and wool versus synthetics such as polyester.

Each fibre has passionate advocates and critics, particularly regarding environmental and economic issues.

This battle for the hearts, minds and wallets of consumers impacts global supply chains, trade policies – and the price of your next outfit.

A market in flux

The global textile industry is estimated to be worth well over $1 trillion per year.

Through rising incomes, fast fashion, shorter production cycles, seamless global logistics and the viral power of social media trends, fabric production continues to surge.

The scale is staggering – about 128 million tonnes of fabric are produced annually, equating to 16 kg per person or over 50 clothing items per year for every person on earth.

About two-thirds of all fabric is now made from artificial fibres, with polyester accounting for around 57 percent of the total. Of the remaining third, cotton accounts for 20 percent, while wool makes up around one percent. Polyester dominates due to affordability and versatility, while cotton and wool face challenges from high production costs and shifting trade policies.

Natural fibres: premium but pressured

For many, cotton remains the go-to fibre, especially for breathability and comfort. Interestingly, many people obsess over thread count in sheets – despite many not knowing what it means.

Is a 1000-thread count sheet really better, or are we just impressed by big numbers?

In reality, thread count matters up to a point, but past a certain threshold, it’s mostly marketing.

A well-woven 400–600 thread count sheet can feel just as luxurious as one boasting a much higher number.

Cotton quality varies significantly by the region where it’s grown.

Egyptian cotton is prized for its extra-long staple fibres, creating exceptionally soft and durable fabrics. US cotton, particularly from Texas and the Mississippi Delta, is known for consistency and volume.

Meanwhile, Australian cotton is favoured by many manufacturers for its bright white colour, low contamination and sustainable farming practices.

Australian growers have also made significant advancements in water efficiency, using around 48 percent less water per bale over the last two decades.

Cotton often finds itself entangled in trade wars.

In recent years, China has imposed and lifted tariffs on both Australian and US cotton, pushing exporters to diversify. Vietnam, Pakistan and Turkey have stepped in as new buyers.

Cotton fabric manufacturing is also shifting, with rising labour costs in China making countries like Vietnam and Indonesia increasingly important textile hubs due to lower costs and favourable trade agreements.

Wool: from suits to space

Wool has woven itself through history – from ancient Greece to the “riding on the sheep’s back” era in Australia.

Before the 1960s, wool accounted for over 10 percent of global textiles. Today?

Around one percent.

Wool remains synonymous with luxury, but how many people wear suits anymore – especially post-COVID? The shift toward casual and “athleisure wear” has reshaped demand. That said, wool still has a place in the modern world – it is thriving in sportswear, high-end fashion and even space technology due to its breathability and quick-drying properties.

Not all wool is created equal and many people don’t realise the difference between Merino wool and coarser types used in carpets and blankets.

Australia is the undisputed leader in fine wool production, particularly Merino wool, which accounts for around 90 percent of the world’s fine apparel wool.

The best-quality Australian Merino comes from certain regions in New South Wales (New England and Riverina), Victoria (Western Districts) and parts of Tasmania. Merino fibres are significantly finer than regular wool, making them softer and more suitable for next-to-skin garments.

Meanwhile, New Zealand is primarily known for its strong wool, which is coarser and more durable, making it ideal for carpets, upholstery and industrial textiles. This wool typically comes from breeds such as Romney and Perendale sheep, which are distinct from the Merinos used in fine wool production. Although it doesn’t match the softness of Merino, New Zealand’s wool is prized for its durability and is widely used in home furnishings and durable textiles. In contrast, China, Argentina and Uruguay also produce significant amounts of coarser wool, mainly used for carpets and upholstery.

The wool industry faces both opportunities and hurdles. On the upside, its biodegradability and durability appeal to sustainability-conscious consumers. Brands like Icebreaker and Smartwool have positioned Merino as a premium outdoor fabric, while high-fashion houses like Zegna and Loro Piana still value it for tailoring.

Wool has even entered unexpected markets – NASA has tested wool for insulation and car manufacturers are exploring wool-based composites. However, wool’s high cost, processing requirements and ethical concerns over mulesing remain barriers to mainstream adoption.

Polyester: from shiny to sustainable?

Many older consumers still remember polyester’s shiny, stiff and sweaty reputation – think disco-era suits that made you glow (and not in a good way).

But polyester and synthetics in general have come a long way.

Polyester is just one of many synthetic fibres, including nylon, acrylic and spandex. Nylon, first made for parachutes in WWII, now dominates sportswear.

Acrylic mimics wool but is cheaper and less breathable. Spandex (Lycra) is found in everything from leggings to superhero costumes.

Polyester has evolved – modern variants are softer, quick drying and even mimic silk or cotton. It dominates fast fashion and activewear due to low cost, durability and wrinkle resistance. Its biggest production hubs are China, India and Bangladesh, where manufacturing remains cost-effective and reliable.

But polyester is also seen by some as a sustainability villain. Being derived from petroleum, and shedding microplastics, polyester can take centuries to decompose.

Supporters argue that polyester lasts longer and requires less water than cotton. Brands like Patagonia and Adidas are pioneering recycled polyester, but even that still releases microplastics.

The evolving battle: who wins?

Consumers today expect their clothes to look good, fit well and perform better – without sacrificing sustainability.

That’s why blended fabrics are booming.

Cotton-polyester blends provide the best of both worlds – breathability combined with durability, making T-shirts and everyday-wear last longer.

Wool-synthetic blends are gaining traction in outdoor gear, where stretch, warmth and sweat-wicking (where the fabric pulls moisture away from the skin and spreads it out to evaporate quickly) properties are essential.

The broader shift toward athleisure – led by brands like Lululemon – reflects how fibres must now meet rising consumer expectations around performance, comfort and appearance. Female driven trends on platforms like Instagram and TikTok continue to influence not just styles but fabric demand, accelerating the push toward stretchy, sweat-wicking blends.

Meanwhile, the cutting edge of fabric innovation includes bio-based polyester and lab-grown wool, which could redefine sustainable fashion in the coming years.

The entire industry is adapting – from fibre sourcing to production, marketing and retail.

Fast fashion giants like Zara and H&M are incorporating more recycled fabrics. Platforms like Temu and Shein, rising rapidly through low-cost, high-speed fashion, are drawing scrutiny from some US regulators concerned about labour sourcing and market disruption.

Luxury brands are pushing traceable, ethically sourced materials as ultimate status symbols. Manufacturing is shifting, with production moving from China to Vietnam, Bangladesh and Ethiopia. Even marketing is changing – social media forces brands to be more transparent, faster to adapt and better at storytelling.

What’s next for fibres?

So, where does the fibre battle go from here?

Polyester isn’t going anywhere, but scrutiny over microplastics and fossil fuel reliance will push for more sustainable alternatives. Cotton and wool will hold their ground, particularly at the premium end of the market.

Then there’s the question of overproduction – the world is drowning in fabric, with landfills overflowing with discarded clothing. Will the industry slow down?

Probably not.

But it is likely that the industry will see more regulations around textile recycling and circular fashion models, with resale, rental and repair gaining momentum – not just for sustainability, but because it’s becoming fashionable and financially smart.

And finally, the quirky reality?

In this race for the future of fibres, we may end up back where we started – wrapped in natural fibres, but with a high-tech twist.

Maybe one day, someone will design a Merino wool jacket embedded with nanotechnology that repels stains, regulates temperature and posts your outfit on Instagram.

Until then, the world keeps spinning and the sheep keep grazing – oblivious to the fact that their fleece might just be the next big thing, again.

Sara McCluskey, Head of Diversified Industries, ANZ Institutional

This is a version of work originally appeared in Autumn 2025 “Food for thought” report.