Killing animals and skinning them allows you to use their skins to "craft" (upgrade) your different bags. From the menu, scroll to craft, and when u scroll over each bag, it will tell you what animals skins are needed. When you have the required skins, go back to the same spot and the bag you can craft will be green, scroll to hit, and hit the button to craft the new bag. Do this five times and the achievement is yours. Will probably happen fairly early in the game.