Niche Marketing Can Increase Demand for Wool

By Amy Conner

November 2004 -- The concept behind the formation of The New Zealand Merino Co. (NZM) was to further develop the opportunities for New Zealand Merino growers. Today, NZM sells approximately 70 percent of the Merino wool produced in New Zealand, and has driven the process of changing from a commodity outlook with respect to marketing, to that associated with a differentiated product.

NZM is a wool broker, marketer and an innovation organization for New Zealand Merino growers. It brings together New Zealand?s Merino woolgrowers and New Zealand Merino customers and brand partners to develop a more stable marketplace in which to transact wool. It is funded through a voluntary 4-percent marketing and innovation fee paid by those growers who sell their wool through NZM.

NZM was developed on the premise that the New Zealand Merino wool clip needed to be differentiated from that of its international competitors. There was also a lack of awareness from processors and manufacturers that fine wool was produced in New Zealand due to the large amount of crossbred wool types in the country.

Striving to bring direction to the wool marketplace, NZM began by identifying attributes of Merino wool and developing a brand that customers could identify. They focused on new product and market development through innovative partnerships.

?Our aim is to deliver value back to the growers by linking their wool with new products through forward contracts or other innovative selling mechanisms,? says Scott Champion, Ph.D., the research, development and product innovation manager with NZM, in a presentation to the American Sheep Industry Association Executive Board at their July meeting.

The forward contracts have developed long-term relationship with brands and have created certainty of long-term price stability for New Zealand Merino wool growers.

NZM is constantly seeking to increase the market for the New Zealand Merino clip.

?We need to be constantly finding new users for the fiber ? product innovation and getting the product into new companies is critical,? says Champion.

?NZM has been so innovative in finding different marketing programs to spotlight Merino wool for their growers and at the same time providing feedback to their growers as to what the retailers are needing,? says Rita Kourlis-Samuelson, the international wool/pelt marketing director at American Sheep Industry Association. ?Their out-of-the-box thinking has benefited the Merino wool industry in New Zealand.?

In terms of the American wool clip, Champion stresses the importance of quality and consistency because it is of real value to the processors.

?The consumer is fascinated by our wonderful, natural product, and its inherent performance characteristics are of real value in a number of contemporary applications,? he says.