Aussie wool needs to command market

AWI needs a better way of positioning wool where it holds the money

AT LAST year's Australian Wool Innovation (AWI) annual general meeting, it was announced the Australian wool clip had increased in value by $800 million in five years.

Yet growers struggle to make ends meet, the wool price continues to fluctuate at barely profitable levels and the bleeding of producers to other enterprises such as prime lambs continues.

Like many luxury brands, Italian fashion label Ermenegildo Zegna, a long-time supporter of wool reported strong growth in 2011 and 2012, but this was increasingly from regions such as Latin America and Africa, with the rate of growth in China coming off the boil.

And herein lies part of wool's problem. AWI boss Stuart McCullough said himself that China's climate was suited for wearing wool.

However, other developing nations such as India, despite its potential to grow as a processor, were not.

Nor are most developing regions of the world.

Meanwhile, the Chinese are suckers for brand names, because they like to convey success through appearances.

So how can Australian wool, when ownership is handed to a new party as a commodity, extract more from the market?

Maintaining consumer familiarity with wool is important, but when logos like Woolmark are used to identify Australian wool, the purchaser is still buying the product for the Gucci or Zegna brand.

The money is in the branding, not the wool.

The question therefore has to be asked, "are our producer marketing dollars helping brands like Zegna appear to have better product integrity, allowing those companies to make more money with the effect of increasing sales of their brand, not wool?"

After all, wool buyers are often free to stand back and let the market fall until they need to make a bid.

Hardly a sign of a supply chain with bustling demand.

So will a review into the selling methods of wool reveal anything we don't know?

Or is it a clue that AWI's marketing spend isn't capturing the consumer dollar in a way we can hold on to?

Growers made it clear at last year's wool poll they see a need for a body such as AWI through their majority decision to retain a two per cent levy.

But AWI needs a better way of positioning wool where it holds the money, not trying to piggyback on somebody else's brand and watching them take home the lion's share.

TheLand
Andrew Norris

Andrew Norris

is the editor of The Land
Date: Newest first | Oldest first

READER COMMENTS

Chick Olsson
30/06/2014 6:35:38 AM

Great article Andrew. With $500 million plus in levies spent since 2003, it is reasonable to ask, has it benefited growers?
A matter of opinionA selection of editorials from around the Fairfax Agricultural Media group covering the issues of the week.

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