RawDenim

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Japanese Raw Denim

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My first raw denim. Everyone remembers their first raw denim.

I went over to the niche-famous boutique, Blue in Green, in SoHo, NYC. At the time, I spent most waking hours in suit and tie. But it was a weekend and I did my best to “blend in”. After struggling with the door, I was quickly relieved it was not a push/pull mishap. Instead, I learned high-end denim shops are secured like underground poker cells. You wait to get buzzed in.

Now I’m highly allergic to sales staff assistance, but in this case, I needed help. They don’t accost you in raw denim shops. You may even mistake it for coldness. But the product does most of the selling. My helplessness eventually attracted attention and I spilled it out like a confession – “I want a nice pair of raw denim. Not too trendy, just going for durability and subtle style. And I have no idea what I am doing.” Unlike the snoodiness that I feared, he was unbothered. He asked heavy or light? slim? taper? And after a brief exchange – he picked out the perfect pair of Momotaro 15.7 ounce raw denim jeans.

The eventually blissful relationship did not start there. In fact, if you’re looking for pleasure, look elsewhere. Breaking in raw denim is pure punishment that (eventually) drives loyalty. Did they miss a step? Should I feel like I am wearing cardboard?  Check out the internet suggestions for “breaking in raw denim” which varies from sand, saltwater, the shower, and using your freezer.

But my lasting memory of that first raw denim was sitting on our new white couch. Indigo bleeds my friends. If you want to leave your stamp on the world, start by carving a tree, not leaving an indigo ass print.

Most “better with age” experiences start with a period of neutrality. Denim is a real commitment. Denim is discomfort – I’d even argue it’s a net negative. Forget about second or third wear, you will be in month three wondering if this was worth all of the pain. But there is an inflection point, it’s not a moment, it’s a period of time where those jeans just slide on like a “second skin”. For you business brains – yes, this limits the addressable market for raw denim – but to me it is a feature, not a bug.

It’s cliche for emerging earners to add a Rolex, some Hermes ties, maybe a wine collection – but raw denim has its own world of misfits. Almost 7 years later, those original Momos remain a wardrobe staple.

Product Takeaways: Lessons in Commitment

Raw denim requires dedication from all parties. The craftsman, the consumers, and the capital each need a unique form of patience. What made this the rare market to embrace delayed gratification? I believe it was a strict focus on innovating quality, not innovating efficiency.

A brief history of denim

Today, high-quality denim is synonymous with Japan¹. But let’s start from the beginning – you’ll have some fun facts for your next cocktail party. Denim was born in the 1700s when weavers in Nimes, France accidentally made denim while trying to replicate a different sturdy cotton fabric known as “serg”. “The outcome? “De Nimes” was created, eventually tightening the word to Denim. So, penicillin is not our only accidental invention.

If you like saying “it’s always better to sell picks and shovels”, may I offer denim as an interchangeable tagline. Back in the 1800s US Gold Rush, tailor Jacob Davis and Levis Strauss (yes, that Levis Strauss) identified a need for a more durable work pant. A patent and some production led to what we know today as “jeans”. Pour one out for Jacob Davis and his lost legacy.

For Japan, the denim story really begins in the 1900s. Before it was Toyota, it was Toyoda, and in the early 1900s, Sakichi Toyoda made huge innovations in loom machinery (for weaving and spinning). It wasn’t until post WW2 that denim was adopted by Japan and it was a slow process – driven by two market forces: 1. A rebellious Japanese youth that attached themselves to the western-style of US soldiers and Hollywood icons; and 2. A push by the Japanese government to rebuild its manufacturing capabilities.

Japan’s jean started with impored denim from the US (specifically the legendary Cone Mill denim of North Carolina). The jeans were produced on those historic Toyoda looms. Japanese entrepreneurs had dreams of creating their own denim and eventually succeeded in the early 1970s.

From there, Japan was led by the Osaka Five, five native brands that embraced the historical process of producing selvedge fabric with natural dye. Meanwhile the US was innovating with more advanced loom technology and more synthetic materials. What if you skip that painful upfront process? You want those fades off-the-rack? On the surface, faster production and a more comfortable product seem like a wise evolution.

Jeans began having their moment in the 1980s and eventually poked their way into the luxury market in the 1990s. Those standards maintained by Japan began to build appreciation. Luxury houses like Louis Vutton and Gucci introduced the material into the product lines with….denim from Japan. This cemented the aura of Japanese Raw Denim.

What actually separates raw denim from what you would typically buy?

1. Materials: Long-staple cotton sourced from the likes of Zimbabwe, Australia, and the US. The finest cotton threads ensure durability and a unique texture.
2. Process: Natural indigo, 5-10x the cost of synthetic indigo, which is dyed into the cotton by hand. For “luxury denim”, dyeing a pair can take months.
3. Equipment: Vintage shuttle looms move slowly to create a dense weave and more durable fabric that then shapes specifically to the person wearing it.
4. Finishing: These shuttle looms weave the edges of the fabric into itself – which limits unraveling. That self-edge is selvedge. The jeans are NOT pre-washed which allows the customer to fully break-in the final product.

A rule of thumb is 500-1,000 wears of Japanese Raw Denim before they need some repair. In college, I was tearing through jeans in a semester. To me, you can expect 5x-10x the durability for 5x-10x the price. How should you interpret that? Traditional luxury products cost substantially more than the increase in quality. I don’t consider “raw denim” to be in the luxury category today – but the linear relationship between cost and quality attracts both premium buyers and luxury buyers.

Raw denim’s customer attachment comes from everything mentioned above, but enthusiasts love “the fades”.

“A good worn-in jeans is like a diary, it tells your story!”

– Long john

Some people play video games – some people watch Netflix – some people post on the internet about their denim fades. The science of fading comes from the indigo which slowly bleeds off to reveal the original white threading. My jeans prominently display my penchant for front pocket cell-phone storage – along with some wild creasings. They are distinctly my own.

III Business: When Less is More

So why is Japan able to make this an enduring practice?

Takumi and The Power of Story– Takumi is a Japanese term that loosely translates to “master craftsman” and their detailed work. The concept is captured in raw denim. A cynical Westerner might look at Takumi as a marketing scheme – and it can sure as hell be marketed – but when you research Japanese denim, you will find countless videos of the actual process. It’s a sharp contrast to western brands which market their end products and very little about “how the sausage is made”.

A Fragmented but Growing Market – Jeans have become a wardrobe staple, with the global market growing from ~$5bn in 1985 to ~$100bn today. Levis, #1 in market share, accounts for $6bn (or 6%) of the market. I was surprised at the fragmentation of the market – but fragmentation allows for different niche strategies which is how I’d classify raw denim. And if you told me in 20 years that investors had raw denim or certain raw denim brands in the luxury category, I would not be surprised.

Scarcity as a Strategy- A slow methodical process is another way of saying “your volume is capped”. But less volumes offers end customers a special product that comes with (wink, wink) special price. Somewhere between 5-10% of denim currently made is selvedge. I have seen estimates that 40%+ of denim sold is selvedge, I can’t confirm that is apples-to-apples, but it is fair to say they represent a higher percentage of $$ market share than volume market share. And scarcity paired with quality attracts not only a direct consumer – but potential high-end B2B partners as evidenced by the luxury houses adopting Japanese denim.

Vertical Integration – The Japanese have vertical integrated large portions of sourcing, manufacturing and distribution. Vertical integration is never black and white, they still import their cotton from Zimbabwe and the US, but it is always attributed to quality. In a 2017 interview, Momotaro’s founders noted they stopped producing raw denim above 20ozs because they did not think the cotton was actually higher quality. Point being, they control as much as they can control but always lead with quality. This introduces more capital intensity and complexity but brings the benefits of durability and customer trusts. I always take note of brands making similar vertical integration evolutions – like the US brand Buck Mason’s acquisition of a Pennsylvania Knitting Mill in 2023.

Enthusiast Economies – A good customer is a loyal buyer. A great customer is a loyal buyer who also markets your brand to the world.

Enthusiast economies are created when communities exist simply to discuss your product. Does your product have a dedicated message board or forum? Is there an active secondary market? These are signals that you have crossed a threshold. You can ignite the flame – but it must persist without your direct involvement. Raw denim slowly achieved each of these milestones.

You can’t force enthusiast economies but consider the “Ikea effect”. It’s a cognitive bias where you place an irrationally high value on the products you create. For all those minimalists who want you to eliminate physical objects and only spend money on experiences, well these are physical objects that come with an experience! Raw denim captures it. The sheer effort to break in denim is meaningful – but the outcome belongs to you.

Enthusiast economies also feature subtle status symbols. The selvedge cuff is (maybe was?) a status symbol. A perfect, “if you know, you know” dynamic where showing the selvedge finish was a signal to the outside world. The cuff has an interesting history tracing all the way back to the early days of blue jeans – and Levis claims to have revived the cuff with their introduction of the vintage line in 1996. Regardless of the origin, it was another signal to pair with your bespoke fades. These are small things that carry incredible power for brands.

IV My Takeaways

What can be borrowed? The consumer brands with the strongest loyalty are built on quality or convenience. The convenience category has the likes of Amazon and Costco but let’s focus on the quality category. Beyond the luxury houses, we have more recent examples with Yvon Chouinard and Patagonia. You also see this with admirable upstarts like Paynter. The origins are often grassroots targeting a specific niche. Some early Japanese denim brands were targeted for motorcycle riders – similar to Rolex making their watches for divers, pilots, etc. Eventually, the product attracts non-practitioners. but appreciating crowd. Now, as the product catalog expands, does the quality bar change? Yes, in areas. But enduring brands protect specific SKUs and never allow for full brand dilution.

What can’t you underappreciate? Craftmanship across the labor force is hard to replicate and warrants honest introspection. Whatever you read, hear, and see in Japan is different from a craftsmanship perspective. Yes, you have pockets of great craftsmen in every geography. But in Japan, it is a cultural commitment to quality. You must appreciate this reality if you have broader ambitions that include a labor force. I look at a company like Rancourt in the US that has documented its labor challenges as it attempts to keep up with demand. It takes years of training to perfect a craft, and if it doesn’t take years, you probably don’t have a craft.

What to watch? It’s difficult to assess the health of Japanese raw denim businesses beyond them being in business for decades. I was able to gather a few notable developments that are worth monitoring.

1. How it can go wrong – In 2019, a cult-favorite denim brand, The Flat Head, filed for bankruptcy. This came shortly after an incredible sales boom in 2015/16. The downfall was an expansion of SKUs and widening of the product catalog.

2. In process evolution – in 2022, Japan Blue Group (which owns/operates Momotaro, Negative Denim, and Japan Blue Group) was acquired by the Japanese private equity firm, Karita & Company. The main change thus far was a rebrand. But they have noted efforts to expand globally, most notably through the introduction of new fabrics like cashmere and silk. I have yet to see a slip in quality – and the raw denim heads seem to agree – but this is a departure for the “stay in your lane” strategy that has kept Japan Blue Group as an industry leader for decades

3. L Catterton (/LVMH) investment in Kapital – the polarizing headline would be saying “LVMH is adding raw denim to their luxury portfolio” but that would oversimplify reality. Kapital sold a majority stake to L Catterton. And L Catterton is 40% owned by LVMH. Regardless of the semantics, raw denim has many of the underlying luxury traits, and this evolution felt inevitable.

“I have often said that I wish I had invented blue jeans: the most spectacular, the most practical, the most relaxed and nonchalant. They have expression, modesty, sex appeal, simplicity – all I hope for in my clothes.”

― Yves Saint Laurent

Closing Thoughts – To leave you optimistic, it’s easy to dismiss the idea of new craftsmanship when we mostly witness deep geographical ties. French wine, Scottish Tweed, Shetland sweaters, etc. Yet here is a product that is distinctly not Japanese in origin. They adopted it and tapped into their own cultural advantages to dominate it.

My admiration for raw denim comes from the quality. Most “better with age” products are used on an irregular basis, but raw denim is designed to be worn every day. That is unique and not at the unreasonable price tag you’d typically associate with high-end luxury. I will never sell people on buying a pair of raw denim – but if you can’t appreciate the craftsmanship, that’s on you.

Brand Recommendations

Consider these recommendations of a tourist. These are brands I have worn and enjoyed. I highly recommend going to a shop and trying some on – you now know what you are in for – at least get the sizing right.

Momotaro – my original 15.7oz pair is still my favorite. No one knows they are any different (which means I didn’t buy the pair with their stripe on the back pocket).

Levis Strauss – hit or miss but they are the OG. I am not a 501 guy but they are the original!

Hiroshi Kato – Japanese sourced but made in the USA. If you are into stretch, they do that. You don’t have to go full raw denim, just dip your toes.

Iron Heart – I have only purchased their chinos, but everything they do is built to last. If I were buying another pair, I’d look here first.

Additional Reading

Denim History – Ellicott

Raw Denim Overview – Heddels

W David Marx – Ametora: How Japan Saved American Style