With climate change, trade uncertainty and stricter regulations like UFLPA, sourcing and finance teams need to think differently about cotton as a way to reduce risk.
In this interview with Hertzman Global Intelligence, Mark Lewkowitz, president and CEO of Supima, the U.S. Pima cotton promotional organization, explains why American cotton in general is a safer choice and how brands can gain long-term value by working closely with U.S. growers.
HGI: What is the financial case for deeper, longer-term engagement with U.S. cotton growers?
Mark Lewkowitz: The challenge is no longer about managing for the lowest delivery cost. Exponentially increased complexity now drives strategy around minimizing the cost of disruption. U.S. cotton sits outside asymmetric downstream supply chains that run through high-risk geographies.
By definition, U.S. cotton has de-risked exposure to UFLPA enforcement, Section 301 tariffs and constantly evolving country of origin scrutiny. As a dependable, robust and stable source of trusted cotton, [a U.S. cotton sourcing strategy] leans into stabilizing supply chains relationships to manage and mitigate risk variables through the entire supply chain model. This includes the expansion of brands seeking to establish longer-term sourcing engagements with growers either directly or strategically managed with supply chain partners.
HGI: With cotton prices under pressure, how does Supima sustain its premium, and how should CFOs assess when higher-quality cotton can reduce overall cost?
ML: The entire current value chain is under duress from the grower through retail when perceived only from a cost conversation. Value extends far beyond simple cost metrics. However, cost predictability against a volatile commodity baseline can be leveraged in productive ways to improve bottom line performance.
Modeling cotton price over a multi-year horizon provides predictability. Those deeper relationships also lean into preferential allocations during tight crop years, or for quality allocations. While these serve as core opportunities, specific Supima premium values arise additionally in several key areas. Supima cotton quality stands out and directly ties into lower defect and return rates (durability, pilling resistance and color retention).
There’s higher average unit retail value where the SUPIMA® trademark functions as a verified quality signal that supports premium shelf positioning. This also provides product differentiation that is harder to commoditize or white-label away.
For branded retailers, the margin contribution of a verified, licensable fiber mark — particularly one with growing consumer recognition — should be part of the sourcing ROI model, not treated as a brand team conversation separate from procurement.
HGI: What about the end consumer? Have there been consumer shifts on premium product?
ML: In addition to all the other market variabilities and challenges, consumer sentiment is evolving and engagement with SUPIMA® has been growing. This is demonstrated by the increasing number of brand engagements globally that are seeking to engage consumers with a credible and responsible approach around cotton and natural fibers.
Notwithstanding the media coverage around micro and nano particle plastic concerns, Gen-Z and Millennial consumers are seeking out credible and trustworthy brands choosing to engage in responsible sourcing programs like the AQRe™ Project.
HGI: Traceability and due diligence requirements are becoming essential, not nice-to-haves. Where are brands underestimating current and future compliance costs?
ML: One way to answer this question is with some other questions. What is the brand’s UFLPA exposure risk and what is the financial impact of a CBP detention or ongoing detentions? What product lines will require Digital Product Passport compliance within the next 3 years? How can a brand be ready and what will it take to be compliant and to accomplish that goal? When does a brand need to start? While these are some of the most apparent immediate questions, the underestimation of compliance costs is through a linear costing application approach which is not reflective of the actual escalation of internal compliance work that will be needed.
While external compliance costs are visible in budgets, common underplanned resources such as compliance staff time, legal review, supplier engagement and remediation and commercial team involvement are usually not accounted for.
On top of this, these factors are usually significantly compounded by compressed time frames when practice approaches were not adopted early enough and then require more concentrated and focused scopes of work to meet demands.
HGI: How does Supima’s AQRe™ Project help sourcing and finance teams manage quality, traceability and compliance risk, and where does it deliver the most measurable value?
ML: Most traceability programs in the cotton sector are documentation chains — they track claims through a supply chain using document copies, certificates, transaction records and self-attestations. They answer the question “what did suppliers say about this fiber?” That’s a fundamentally different proposition from answering “what is this fiber, and where did it actually come from?”
The AQRe™ Project is structurally distinct as it implements a hybrid approach using forensic based authentication to validate a digital block-chain anchored traceability and transparency platform to track goods from the cotton to finished goods. Providing a deep level of supply chain insight with validation presents higher levels of sourcing confidence and compliance around the authenticity and credibility of the product. The AQRe™ Project provides a multifaceted value through compliance cost consolidation — a future-ready platform to address forthcoming regulations, brand credibility and consumer confidence.
HGI: Material decisions now affect inventory risk and markdowns. How does fiber quality and durability factor into sell-through, returns and lifecycle margins?
ML: This is an underworked dimension of the sourcing ROI conversation. Most brands still treat fiber specification as a product development decision with margin implications confined to the cost side. The more accurate model treats fiber quality as an inventory risk variable with downstream effects on sell-through velocity, return rates, markdown depth and lifecycle margin that dwarf the per-unit input cost differential.
From an intrinsic fiber quality position the performance gap between American Pima and commodity or mid-grade cotton at these specifications is measurable, consistent and shows up in consumer behavior in ways that have direct P&L consequences. These materialize in consumer experiences through product durability, enduring appearance, superior feel/softness and product consistency that is noticeable in core programs and repeat customers.
HGI: Looking at 2026 and beyond, what sourcing strategy around cotton do you believe will prove most expensive in hindsight, and what would a more resilient alternative look like today?
ML: The landed cost optimization model that depends on several assumptions that are simultaneously unwinding will be the most expensive in hindsight. Using low-cost cotton from unknown origins through opaque chains of custody and weak sustainability data aren’t actually cheaper when fully costed. They result in transferring unpriced risk onto the brand’s balance sheet.
Reactive compliance also does not scale as defensible due diligence which needs years of runway, not months. Relying heavily on certification as final compliance worked for a time in the past, because assumptions that regulatory timelines would slip was correct often enough to survive internal scrutiny.
But it won’t survive the next 5 years.
