A wool working group has finally released its long-awaited report, saying it believes natural fibres are "on the cusp of a renaissance" and a new approach is needed.
The Wool Industry Project Action Group was established in 2018 to look at opportunities to improve returns for the beleaguered crossbred wool sector.
New Zealand was one of the world's most significant producers of strong wool; it produced around 10 per cent of global wool of all micron types and around 20 per cent of the 500millionkg of strong wool produced globally, the report said.
But increased competition from synthetic fibres had reduced demand for strong wool and led to a long-term contraction of the sector.
Lack of profitability and investment had seen sheep numbers drop 45 per cent since 1995 (from 49 million to 27 million in 2018) with wool production falling 51 per cent from 213 million kg clean equivalent to 105 million kg.
In real terms (inflation adjusted), the New Zealand strong wool price had decreased by 41 per cent between 1990-91 and 2018-19 to an average annual price of $3.52kg clean in 2018. That decline continued with PGG Wrightson's market indicator at $2.55kg clean at February 20 this year.
Attempts to revitalise the sector had failed in the past. However, the group believed it was on the cusp of a natural fibre renaissance led by more environmentally and socially conscious consumers.
The increasing shift back to using natural and environmentally sustainable materials was a "significant opportunity" to further grow the wool sector and continue to innovate with new uses for the fibre.
Consumers around the world were becoming increasingly aware of the negative impacts of synthetic fibres, particularly plastic pollution and the use of potentially harmful chemicals such as fire retardants. That awareness was changing how and what consumers chose to buy.
New Zealand strong wool has the potential to once again be a leader in its traditional market niches such as carpets and blankets, and to develop entirely new product categories targeted at consumers and end users who were searching for natural, healthy and sustainable alternatives.
The wool sector was fragmented and disjointed. While a number of entities were undertaking sector-good activities on behalf of some parts of the sector, there was no mechanism to ensure they did so in a co-ordinated, cohesive and representative way, the report said.
The group's recommendations focused on identifying opportunities for players in the strong wool sector to invest and work together to target high-value consumers and end users, while simultaneously getting the sector "match fit" by addressing the issues that had manifested due to a sustained lack of investment.
Alongside the need for the strong wool sector to become more responsive to consumer and end user needs, there was also an opportunity for Government and all New Zealanders to show greater leadership by incorporating criteria requiring sustainable and environmentally friendly products into purchasing decisions.
"We will not change the fortunes of the strong wool sector overnight, but our recommendations will start to build a vibrant sector ecosystem that delivers for all — from our growers, along the supply chain to our consumers and end users."
The situation for fine wool had been quite different; over the past 20 years, the price of fine wool had increased by about 50% to an average annual price of $26 kg clean in 2018.
That had been achieved through strong leadership, sustained investment and collaboration between farmers and companies to maintain the volume of fine wool produced in New Zealand, improve its quality and develop the story presented to consumers, the report said.
Fine wool pricing had benefited not only from continued use in applications such as high-end suiting, but also from the development of a new product category - natural fibre outdoor lifestyle clothing.
That new product category had, in large part, been created by innovative companies that had built strong connections with their customers and developed an in-depth understanding of consumer needs.
That had enabled the development of "hero" brands that appealed to consumers who valued the use of natural products and the specific performance attributes of fine wool.
Key actions recommended by the group included:
• Develop a market-focused investment case and strategic roadmap for the strong wool sector by partnering with a group of global experts capable of providing an "outside in" perspective to identify opportunities for the sector and what individual players within the sector can do to take advantage of them.
• Establish the capability necessary to get the sector "match fit" and ready for the opportunities ahead. An executive officer should be appointed and supported by existing expertise in the wool sector and government agencies to undertake immediate actions in skills training and capability development, research and development, accreditation and standards, sector data and statistics, and sector connection and co-ordination.
• Establish a strong governance and co-ordination capability to oversee the development of the investment case and strategic roadmap, work with the wool sector to implement its investment case and strategic roadmap and oversee the executive officer.
The group comprised chairman John Rodwell, strong wool farmers Kate Acland and Sandra Faulkner, fine wool farmer Paul Ensor, Cavalier chief executive Paul Alston, AgResearch science impact leader Andy Cooper, PGG Wrightson Wool general manager Grant Edwards, NZ Merino Company international marketing manager Gretchen Foster, NZ Merino Company and Studio ZQ general manager creative Steve Williamson, and Segard Masurel (NZ) Ltd managing director Peter Whiteman.