Linen and Profit Margins: Why Brands Love Natural Materials

How Sustainable Fabrics Like Linen Help Fashion Brands Boost Pricing Power, Margins, and Brand Equity

Todays writer:

Ulyana Kolenchenko is an international student from Kazakhstan pursuing a Bachelor’s degree in Business Administration and Management at the Venice School of Management. She brings four years of experience in the e-commerce sector, has volunteered at private equity conferences, and is currently participating in the Ecotopia program within the EUTOPIA Alliance of ten leading European universities. Her academic and professional interests center on operations management, corporate sustainability, and their impact on financial performance.

Fashion groups are big players on sustainability impact, the sector employs 3.45 billion people globally and accounts for 20% of global wastewater alone. Over the past six years, driving solutions have addressed issues such as environmental pollution, resource overuse, and carbon emissions through the adoption of biodegradable materials, the implementation of circular economy practices, and the industry’s growing cultural influence. Sustainability has evolved from a peripheral concern to a core strategic priority within the fashion industry. Viscose and wool on store shelves have been replaced by linen and polyester, two of the most environmentally friendly materials. Aesthetic preferences and social recognition have been replaced by sensory and thermal comfort, making linen the new trend. Thanks to the environmental and economic advantages of this breathable material, companies have increasingly begun introducing linen lines in their new collections.

Sustainability goals

Linen is a textile made from the flax plant. This breathable, hypoallergenic fabric is one of the best materials to help companies make their clothing more sustainable. Linen requires around 400 litres of water per kilogram of flax, while cotton requires 50 times more. Flax can grow without intensive use of pesticides, which supports healthy soil practices through crop rotation. In addition, it reduces the need for chemical inputs, making flax a low-impact crop well-suited for sustainable agriculture. This low-impact profile makes linen a strong candidate for sustainable practices.

In 2019, Spanish retailer Zara published that 100 percent of their materials will be sustainable or recycled by 2025. In the previous year, the parent company of Zara, INDITEX, released an annual sustainability report and showed that 73% of its fibers are now lower–impact, indicating real progress towards its goal.

Despite its ecological benefits, linen also contributes to consumer health and well-being, aligning with the third UN Sustainable Development Goal (SDG 3). In the conditions of global warming, breathable fabric does not allow the body to overheat, and the hypoallergenic property helps people with high sensitivity to allergens to better endure hot days. These qualities enhance its appeal in both fashion and home textiles.

Finances of Linen

In 2024, the global flax market was valued at $0.99 billion and is expected to grow to $1.1 billion in 2025, with a CAGR of 11.2%. According to Business Research Insights data, 2033 forecasts tripling the flax material market compared to 2024 and will amount to 2.7 billion US dollars. This indicates high demand from clothing and home textile manufacturers and consumers looking for eco-friendly, breathable, and durable fabrics. In 2022, China ($1.1B), Italy ($192M), and Belgium ($90.3M) were the main exporting countries of Linen fabrics in a global context. While the leaders of producing long fibres are France, Belgium, and the Netherlands. The production of these countries accounts for 3/4 of the total flax production in the world, according to Alliance for European Flax - Linen & Hemp.

The high COGS of linen are conditioned by the intensive production process. The path from raw flax to ready material requires 100 days of in-depth labor, high-skilled specialization in this field, and compliance with standards. Additionally, for processing tons of flax, companies need specialized machinery, costing up to $240,000 per unit. There are no official sources with the cost of production of linen fabrics, but even from the context of such data, linen is not a cheap pleasure.

Due to the high cost of fabrics, in order to recoup the margin, companies pay more attention not only to pricing policies, but also to marketing and the luxury of clothing made from such fabric.

Higher margins through premium pricing.

Linen items made from long flax, produced in Europe, and certified with certificates such as Masters of Linen, European Flax, and OEKO-TEX prevail in price. The average bill for 1 unit of goods is from 100 euros and is included in the premium segment, creating a high margin. In mass markets (e.g. Zara, Bershka, H&M), high margins are hidden behind a lower quality type of short-linen. Short flax linen is a by-product. The secondary product saves water during processing, and also reduces the cost of raw materials due to the recycling of unnecessary clothes. By donating items to brand stores, companies save on raw materials.

Pricing power through sustainability and storytelling

As noted in the sustainability section, companies use marketing to reinforce the premium and usefulness of the fabric: the low amount of water and chemicals used positions the brand as "Eco". Original story, craftsmanship, capsule collections, and ecological footprint comparison allow the buyer to gain the status of a person responsible for the ecological footprint instead of feeling guilty for buying an unnecessary thing. A McKinsey marketing study found that up to 65% of Gen Z shoppers are willing to pay more for an eco-friendly product.

Brand Equity and Strategic Alignment

Using linen signals alignment with ESG goals, health-conscious design, and premium minimalism. The brand image is also perfectly anchored in the values ​​of the "Circular Economy", making the brand more conscious.

Outlook of linen

Despite the rapid pace of fashion, linen could become the material of the future. With low water and chemical requirements, biodegradability, and compatibility with regenerative economy goals, linen-based textiles are fully compliant with sustainability and product margins.

As global demand for sustainable fibres accelerates, long-grain flax is likely to strengthen its position in premium and luxury markets, while short-grain flax and recycled blends support circular strategies in the mass market. Investments in regional flax cultivation and EU-based processing will further improve the material’s environmental footprint and supply chain sustainability.

Linen is evolving from a seasonal niche material into a strategic year-round asset. For brands aiming to future-proof their product lines – both economically and ethically – linen offers a rare combination of durability, desirability, and environmental integrity.