Where there's a wool there's a way
Years before swapping California for Tasmania, woolgrower Nan Bray (pictured right) had a different impression of wool and its worth. Looking for a new suit for a new job – heading up CSIRO's Marine Research division - she settled on a classic St John Knit wool suit.
In the late 1990s, when Dr Bray left CSIRO and bought a Merino farm in Tasmania's Central Midlands, her thoughts returned to that wool suit. "I thought, there's got to be a market for wool. But then I went to my first wool auction, and I was appalled," she says. "It was like a performance review based on a whole year's work and it was over in 10 seconds. You don't know where your wool is going or why."
And she says prices are not indicative of quality. "In 2001, I sold wool for $24 a kilogram. In 2002, I had better-quality wool and sold it for $10/kg."
As a relative newcomer to the wool business, Dr Bray brings fresh insight to wool marketing. She says woolgrowers need price stability. "And to do that we need improved paths to market so that Tasmanian wool is treated as the unique commodity it is."
Happily, it was something Tasmanian woolbroker Roberts Ltd was already working on, and now Dr Bray is one of a group of Tasmanian woolgrowers who have been revitalised by the Wool Link program.
Roberts' marketing manager Eric Hutchinson says the program was born out of a need to provide producers with clearer and better price signals and a greater degree of certainty and involvement in the fibre market.
The road to Wool Link began about five years ago when Roberts, together with The Merino Company, started engaging more with end-users – designers and clothing manufacturers – to boost marketing options.
The initiative targets consumers and works back down the value chain, Mr Hutchinson says. "But to get to consumers we need to deal with the retailers and apparel companies. With a clear brief on what they want, we can reverse-engineer a product for them to deliver to consumers."
Because the industry does not have the money or resources to blanket consumers with messages about wool, Wool Link is strategically targeting end-markets, identifying outdoor wear, sportswear, suiting and wovens, classic knitwear and interior applications as key end-user segments.
For example, Mr Hutchinson says the North American activewear market is a wealthy demographic with which wool fits well. "This segment includes people who play in the outdoors and like natural products. Wool is a nice match because it fits with their environmental and sustainable ethos and is also a technical fibre."
The Japanese wovens and knitwear market is also important. "This is a very wealthy market," he says. "In general, this consumer is used to wearing a high level of wool and they will pay for quality in knitwear, wovens and next-to-skin products."
This market also has a high awareness of, and a fascination with, Tasmania as a legacy of tourism. "Japan is our biggest export market," Mr Hutchinson says.
Underlying the whole approach is the need to ‘de-commodify' wool. "There is really no way we can compete on price with other fibres or reward growers properly for their efforts."
Mr Hutchinson acknowledges there needs to be certainty that improved and more stable financial returns will be available in the future. "And certainty will come from developing strong relationships with customers."
For Roberts, the Wool Link program is also one of self-preservation. It handles just under 80 per cent of Tasmania's wool but has seen its wool business drop consistently over the past 20 years. In the 1980s, Tasmania produced 150,000 bales of wool a year, in the 1990s it was about 90,000 bales. Today, Tasmania produces about 70,000 bales a year.
"Producers are voting with their feet and are not growing wool," Mr Hutchinson says. "We could sit back and hope that demand reflects price. But the dominance of China is making us all compete on a price basis and this does not suit wool. Hence the need for Wool Link."
He says AWI has been very supportive of the program. By the end of the 2006-07 financial year, he hopes Wool Link will have three contracts in the outdoor/active wear market. "It will say to me that the structure is working, but also that we're just scratching the surface."
The initiative also reflects the industry's changing mood. "The wool industry is different to what it was 20 years ago and we need to accept that. We also have to realise that there is no one solution to turning things around, but this initiative is a good start."
For woolgrower Nan Bray, who produces about 50 bales of 16 to17-micron wool a year, Wool Link is "one of the most positive steps anyone in the industry has taken. If this works for end-users and us then it will be applicable across the whole industry. At the end of the day, top-quality wool should not be hard to sell, it's just that the marketing has to target the end-user effectively."
More information: www.robertsltd.com.au
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